An Interview with Larry Summers on Growth and Prosperity

Takeaways from the Harvard Kennedy School IDEASpHERE plenary event “An Interview with Lawrence Summers on Growth and Prosperity,” with Zanny Minton Beddoes and Larry Summers

Sampling of Notable Thoughts

In response to a question on why government efforts today seem like “smallball” compared to actions in the past, Lawrence Summers said, “There was a lot more empty canvas for Teddy Roosevelt to paint on...than there is for governments today.”

One of the choices facing governments and institutions today is whether to do something that nobody objects to too strongly or something that some people believe “passionately” would be good. We would do better by following the second option, he believes.

“With the right level of public and private investment [in energy],” Summers said, we could be a Saudi Arabia in six years.

Summary

From a macroeconomic point of view, the United States is facing three broad challenges in the global economy, Harvard University President Emeritus Lawrence Summers said during a Harvard Kennedy School IDEASpHERE plenary discussion on “Growth and Prosperity.”

In a discussion with Zanny Minton Beddoes, the economics editor of The Economist and a Harvard Kennedy School alumna, Summers said the three challenges are:

• Achieving adequate demand for reasonable rates of growth while preventing  unemployment.

• Rising inequality and availability of jobs for all in a world where machines and technology are able to do more and more.

• Making government work effectively and sustainably to support our society.

The U.S. is definitely better off than it was six years ago, Summers said, but there are serious problems. He noted that after World War II, America built significant highways and other infrastructure, developed suburbs, equipped households, and created all kinds of businesses.

“Things like that could happen again,” Summers said, “but we’re going the other way” in many areas including infrastructure and optimism.

Summers said inequality, which he considers a “missed opportunity,” is a “critically important problem.” Taxes are one of the issues, he said, adding that there is too much of a growing gap between the small number of the wealthiest Americans and the majority of people in the country. We need to focus on building up our middle class, Summers said.