Contrary to popular opinion: Mexico’s president

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Hello and welcome to the Intelligence on Economist Radio. I'm your host, Jason Palmer. Every weekday we provide a fresh perspective on the events shaping your world. Economic models have long assumed that natural systems are bottomless, from fresh water and clean air to plentiful forests and fish. But a sweeping new report makes a compelling case. And some chilling predictions about accounting for biodiversity and conversations with computers have come a long way, at least in terms of getting sensible answers to simple questions. But the real goal of natural banter filled with nuance and empathy remains distant. We chat through the state of the art. First up, though, new data reveal a surge of COVID deaths in Mexico. The country has officially confirmed more than 2 million cases and almost 180,000 deaths from the coronavirus. But mortality rates tell an even more grim tale. Over the past year, deaths were 52% higher than in previous years, according to the Financial Times. That puts Mexico's rate of excess deaths much higher than that of countries such as America and Brazil. Yet earlier this month, Mexico's president, Andres Manuel Lopez Obrador, widely known as amlo, said we are living in a stellar moment. The COVID spike is far from the country's only problem. Poverty, corruption and crime are all on the rise. But polls indicate that two years into AMLO's term, most Mexicans are willing to give him more time.

Mexico's president is incredibly popular.

Sarah Burke is our Mexico bureau chief.

He won in a landslide in 2018, and he still has approval ratings that most other leaders would be extremely jealous of. It's 62% as it stands. And that's all in spite of what looks like a not very good handling of most things. Most obviously at the moment, the pandemic.

What do you mean by that?

Mexico has a terrible record for Covid, so hospitals are full and oxygen tanks are in short supply. It's done very few tests. It hasn't provided very much financial support at all for people who are suffering or being asked to stay home. Not to work the vaccination, which is one sort of bright spot potentially insofar as Mexico has lined up enough vaccines to cover its population. But it's had a very, very slow start that might be picking up now, but otherwise there are talks of 10 years to get to 75% of the population being vaccinated. And partly this has been a problem again from the top.

So.

So Amlo has completely downplayed the importance of the pandemic. He has refused to wear a face mask, apart from once when he flew in an airplane to go to the United States. And he got Covid himself at the start of this year, and he reappeared and everyone thought, well, maybe he'll have changed his mind after this. But he reiterated again that he wouldn't be wearing a face mask.

So in the face of that pandemic response, then why is his popularity still so high?

So he had this amazing vision for Mexico in 2018, which is why he won with the landslide. He said, I'm going to do a fourth transformation, this big, bold plan to make the country fairer and more equitable by ending corruption and crime and making sure there was economic growth where the gains were fairly distributed so that poor people got richer. The reality is slightly different from the vision so far. In the two and a bit years he's been in power, he's mainly sort of been undoing the reforms of previous presidents and dismantling that system. Throwing out the baby with the bathwater, you could say. And then there's his new initiatives. Mainly they seem to fail to solve the problems that they purport to. And then a sort of third element is that he's really concentrated power in the presidency. And some people say that's to get things done. And other people think there are more evil intentions behind that.

Well, let's come back to the throwing the baby out with the bathwater part. What's he been doing in terms of reform?

He abolished Prospera, which was a very sort of lauded conditional cash transfer program for the poor. He also reversed an education reform that was much more meritocratic assessment of teachers. A big one at the moment is he's trying to reverse, bit by bit, an opening of the energy market that happened in 2013. So it was open to private and foreign enterprises, which would make electricity cheaper and greener. And currently the Congress is debating a bill which would favor cfe, which is a state owned electricity provider, so their electricity would go first into the grid, as opposed to the cheaper electricity, which is often greener or provided by price private companies. This would obviously raise prices and be dirty at energy. But it could also breach the U.S. mexico Canada Agreement, which is the North American Free Trade Pact that replaced nafta. Another sort of big thing has been getting rid of, or proposing to get rid of a lot of the autonomous agencies such as the Freedom of Information Agency, all these ones that keep checks on the government and what it's doing.

And so while he's been tearing all that down, what's he been building up? Well, you say his own initiatives don't do what they should.

He's very dedicated to fiscal discipline. That's a good thing, especially in a so called left leaning president. It's also become very counterproductive during the pandemic. The IMF is telling Mexico to spend more. So far it's only spent 0.7% of GDP on extra efforts during the pandemic and more needs to be done. And some people think this is going to lead to scarring, that there's going to be a permanent drop in output caused by a loss of jobs and businesses. So the recovery is going to be much, much slower in Mexico than elsewhere. He's also splashed out on bizarre old economy projects such as pouring money into Pemex, the world's most indebted oil company. And then he's putting $8 billion into a refinery at the time when no other country is building refineries. And it's not clear what economic return there will be from that.

And you mentioned the big transformative plan was in part about ending endemic corruption and crime. How's that been going?

Well, there's not much good news here either, Jason. There was a 0.4% dip in murders last year and he proclaimed this dip as a very significant success. But that's after a rise the year before. And frankly, during the pandemic, you'd expect it to have dropped. I mean, in other countries across Latin America that also suffer high levels of violence, that has been the case. He also rejected the previous government's tactic of killing and capturing crime kingpins because this led to a splintering of gangs. And, you know, it might be worth rejecting that, but there's no alternative put in place. So I think his vision is that you alleviate poverty and crime goes down. That might well happen in the long term, but it does nothing to sort out the short term problem, the problem of the current El Chapos as opposed to the ones who are still only three years old. On corruption, you could say he set a good example. So there's been Good political rhetoric. There's stiffer penalties on bribe taking for bureaucrats, but he's done less to strengthen the institutions to carry that. You know, again, it's more rhetoric than actual institutional change or heft. The national anti corruption prosecutor is overwhelmed with cases. And one government agency suggests that the number of acts of corruption actually rose by 19% between 2017 and 2019.

It is, as you say, not a big list of happy news here. I mean, when will that ring down to the electorate? I mean, how long will Mexicans continue to support him?

So far they overlook his failures because he really has persuaded a lot of people that he likes them and cares about them. He's very popular because of who he is and his message rather than necessarily what he does. The opposition is seen as corrupt and what came before him was horrifically corrupt. And so he's seen still as the best of a bad bunch by a lot of people. But, you know, he's a classic populist and a lot of the elite are adamantly against him. They see him as a Mexican version of Hugo Chavez, which I think is a little bit of an exaggeration. But there's this big divide and the mix of policy failure and power grabbing is worrying.

Sarah, thank you very much for joining us.

Thank you, Jason.

For more analysis like this from our international network of correspondence, take out a subscription to the Economist. Get a great introductory deal@Equality.com IntelligenceOffer the link is in. The show notes, Traditional economic thinking says that a country has two major produced capital things like roads and buildings and human capital, the skills, education and the health of its total workforce. But a new report commissioned by the British government and authored by economist Partha Dasgupta, argues that a third category is being natural capital, the biodiversity that contributes to fish stocks or timber forests. Once environmental degradation is figured into economic models, growth projections look a whole lot less sustainable. The report has drawn comparisons to a 2006 treatise on climate change by the economist Nicholas Stern.

The Stern Report became this touchstone in the literature, changed the discussion. It was a thing that influenced how economists talked about the way the economy worked and the relationship of economic activity to carbon emissions and climate change.

Ryan Avent writes Free Exchange, our column on economics.

And really it was, I think, an important nudge to the economics profession to start taking these things more seriously. What we have now is a new report, very similar in spirit, also commissioned by the British treasury, but this time given to Professor Partha Dasgupta of the University of Cambridge. And his charge was to explore the economics of biodiversity and to move beyond just climate change. And think about all the ways that nature interacts with the economy and plays a role in enabling us to be productive.

What do you mean?

We dump waste into the environment. You counting on critters of different sorts to break that down and turn it into soil? We dump pollutants into the water. When natural systems are healthy, they can process that in a way that we can continue to draw upon fresh water. We can continue to grow plants in the soil. And if we dump too much into the environment or we take too much out of it, then the ability of nature to do those things declines, and suddenly we may find ourselves less productive than we otherwise would be, which is bad news that's going to affect our incomes and our ability to raise people's welfare.

But it's all well and good to draw a focus to this, but how does a working economist actually take account of these things, quantify these things like clean air and water?

It's not easy. The report refers to some work that's been done to try to put some numbers to these things. And so, for instance, there is a report that was produced by the UN that's cited by Professor Dasgupta, which says that between 1992 and 2014, the value of produced capital, like machines, buildings, et cetera, roughly doubled. And then the value of human capital, which is sort of worker skill levels, that kind of thing, rose by an estimated 13%. And then they have this estimate of what happened to the value of natural capital and say that that declined by nearly 40%, which is dramatic. And that's a really interesting thing. Now, it still raises the question, how did they arrive at that number? And I think that Professor Dasgupta acknowledges that this is hard. It's a hard thing to value. And part of what he's doing here also is trying to encourage researchers to grapple with these sort of tangible questions and come up with some really workable answers that can influence policy.

And so what's the upshot of the report?

What Professor Dasgupta really tries to do, he says, is provide a grammar to economists, basically a way of thinking about the natural world that will encourage them to think of it as something that's important and needs to be taken into account to a greater extent. And that also starts to give them some of the tools for dealing with natural assets in an economic way. And once you include that in there, it suggests, number one, that some of what we are considering to be technologically driven growth or growth that's due to productivity, to Us coming up with new ways of doing things actually deserves to be credited to nature that we couldn't do that stuff if we weren't drawing so heavily on the resources nature provides us. And because of that, you can also see in the equation how relying too heavily on nature in a way that is unsustainable reduces over time the capacity of nature to continue contributing to economic output.

So what's the actual prescription here? Is that just a matter of use fewer resources or don't try to grow so much? This doesn't sound like standards economic orthodoxy here.

The report is a little bit unorthodox in a couple of ways. It is unorthodox in one sense, in that it's just encouraging economists to take these things into account or take them into account to a greater extent. It tries to sort of soften the edge of that by speaking to economists in their own language, by using equations and saying, look, you don't really have to fundamentally change the way you think about the economy. You just have to start thinking about nature as something that's not so different from land or capital. But there is sort of a bigger heterodoxy or heresy kind of lurking in the report, I think, which pushes economists to say that maybe if we're just thinking about things in terms of what we can quantify in terms of what contributes to output, then we're missing part of the story. And obviously, if you're not economist and you're reading this report, you might think, well, we care about nature for all sorts of reasons, not just because it contributes to growth. And we might want to prevent the world from becoming a hyper polluted hellhole for a lot of reasons that go well beyond gdp. The report is sort of sneakily doing that.

Will economists listen, do you think?

Well, I think the lesson of the Stern Review is that economists probably will pay attention that this will end up having an influence on the literature on the way that some economists think about approaching these issues. I think the really hard question is whether there's much of an effect beyond that. You know, certainly the goal with the Stern Review was to kind of light a fire under the profession, but also ideally move the policy discussion forward and get us to a place where we're taking more actions to slow the process of climate change. And I think it's a bit of an open question whether the Stern Review was effective in doing that, whether it actually made it easier for politicians to take hard steps to affect climate change. I think with the Dasgupta Review, we're going to be facing the same set of questions.

Brian, thank you very much for joining us.

Jason, always a pleasure.

Back in the 1960s, having a conversation with a computer felt like something out of the animated sitcom the Jetsons. The cartoon's wisecracking robot maid, Rosie, was a vision into the future.

The old girl's still eager, isn't she?

But of course, very.

H O M E L y I.

May be homely, buster, but I'm s M a R t smart. But now that voice assistants are in many homes and every pocket.

Sorry, I didn't understand.

It still seems that Rosie's believably witty banter is a futuristic prospect.

This idea of having a real conversation is still what lots of people are trying to work towards.

Tim Cross is the Economist's technology editor.

So you've got some of the big tech companies like Google, Amazon, who make these smart speaker systems that we're all increasingly familiar with. They're keen on trying to make these systems slightly more engaging conversational partners.

And I know this is something you were looking into at the recent meeting of the American association for the Advancement of Science. I mean, how's it coming?

Absolutely, yeah. There was a system there called Athena, written by some researchers at the University of California, Santa Cruz, which had ended up as one of the finalists in something called the Alexa Prize Social Bot Grand Challenge. It's one of these grand challenge things, you know, can you make a computer program that we could integrate into Alexa that would engage in chit chat with our customers?

And so how did conversations with Athena go?

Well, I think it's fair to say we're still a fair way from something that resembles chatting to a real human. One of the things that Athena is designed to do, it has these individual modules which all spit out possible responses to somebody's question. And then there's another separate module that sort of picks one to actually say. And those modules, they're powered by things like Wikipedia, all the sort of information that's available on the web, but a lot of that information is facts or factoids. And this sort of approach, it didn't seem to work quite as well as something a bit more emotional and personal. Pulling facts off the Internet is quite an easy thing to do, but the humans don't seem to like it as much. I think what they would have preferred was something similarly reflective with a bit more emotional content. But of course, that's really hard to do. And at the moment, the researchers said, to the extent that you can do it at all, you have to basically code it in by hand, which is obviously slow and doesn't really scale.

So how to get there then? How to get to genuinely automatic, conversational believable chatbots?

Well, this is the $64 million question. You're trying to teach a hunk of silicon that's encased in a box in a data center somewhere how to talk about its experiences of the world. And of course, it doesn't have any. There was another contribution at the presentation from someone called Susan Brennan, who's a psychologist at Stony Brook University. And she was pointing out that there's more to a conversation than two people just taking it in turns to make noises. There's an interactive element. So in some way, when I'm trying to answer your questions, I'm sort of modeling what you're thinking and trying to work out what might count as a good answer for you. And simultaneously, you're trying to work out what I'm thinking so you can phrase your question. So there's this big open question, I think, about whether throwing data at the problem can solve it. And even if it can, whether we're throwing enough data or the right sorts of data in any case.

But what you're describing there is that convincing conversation comes with things like theory of mind and the full range of human perception and so on. I mean, is the field aiming to replicate that in an AI kind of way?

I think in the very long term, yes. People have been talking about it would be nice to give computers theory of mind, but I think a sort of full blown theory of mind that lets you simulate the kind of broad human intelligence well enough to conduct a conversation with it. I think that's decades away.

It's gonna be some time then before I have a conversation with a computer that is as engaging as this has been.

I think so. But I should just point out for full disclosure, that we're doing this interview over zoom and neither of us have our video on. So, you know, for all I know, I've been having a conversation with the computer this entire time.

Tim, thank you for your time. It has been a pleasure.

Thanks, Jason.

That's all for this episode of the Intelligence. If you like us, leave us a rating and a review and see you back here tomorrow. Sam.