Jeremy Grantham: Climate change, population pressure, and toxicity: the threat to biodiversity. We are as you probably know by now the sixth great extinction, the rest were caused by meteorites and great shifts in the climate caused by the sun. This one is caused by us, we the people. Toxicity effects humans, also. In the developed world, over 50% loss of sperm count and no one is concerned. This is a meta study of 200 individual studies, it's hard to imagine how they could get that wrong. In China, coming from way behind us, they have a 25% loss in the last 15 years. Will we worry at 75%? How about 87%? This very well may be why the fertility rate of the Western world is dropping. Older age of marriage and less effective.
I think chemicals will turn out to be a hotter button than climate change. Climate change is regrettably a bit like warming the frog in the pan. Toxicity, sperm counts, insects going missing, and birds to go with it and everything else, this I think can excite people to action. Europe has gone ballistic on plastics in the last year, Europe has banned three incredibly important neonicotinoids that are alleged to kill bees. And this is the problem though. In the EU, if they have some doubt, you have to prove your chemical is clean. In the U.S., if there's doubt, how can you interfere with the capital rights of a chemical company to their chemical? We will take the side at least for the next few years of the chemical companies because there is a lot of doubt. This is a complicated soup we are dealing with, until we are on the ropes, an interesting choice to make.
These are some of the apparent effects of toxicity. Anything that has to do with autoimmune, you see how things are going so well in many areas, but anything to do with autoimmune, which has to do with chemicals in all probability looks like this. Autism appears to be endocrine disrupters when you're pregnant, look at that sucker. It is just exploding. And the same with certain cancers for which there is no other explanation.
Now, what's the name of that cheerful professor at Harvard? Pinker, is it Pinker? I think it's Pinker. Anyway, he's come out with a couple of books saying how wonderful things are. And most of the data he says, it's absolutely accurate. Yes, we do live longer. Yes, we have fewer this and fewer that and everything is fine. But what it doesn't account for is sustainability, that we're using up our resources. And it's a bit like the guy who falls out of the building in the Empire State Building, so far, so good. It's so far, so good 14 inches of soil, so far so good, 12 inches of soil, 8 inches, 4 inches. We're simply not accounting for the real damage. And without that, things look pretty good.
The deficiencies of capitalism, the complete inability to deal with any of these things. And the devil and the farmer, let me tell you my story of the devil and the farmer. The devil goes to a Midwestern farmer and he says, "OK, if you sign this contract and give me your soul, I will triple your profits, your meager profits that you have been struggling with for 100 years for you and your descendants." And he's desperate, and he signs. The profits are tripled and all is well.
And I look at the footnotes, and there are always footnotes when you deal with the devil. Footnote 21 says you will lose 1% of your soil every year. And since that's what they're all losing anyway, big deal, so he signs. And 100 years later with the great, great grandchildren, this is what it looked like. The expected value of the deal with the devil was 5.5 million, the no deal farmer up the road who hung out had a present value of $2 million. And as I like to say, at least when the starving crowds arrived from Chicago, the farmers die rich. As currently configured, every MBA ever produced would sign that contract or fail the course. That is capitalism, there is no room in it. Ask Milton Friedman. A corporation's responsibility is to maximize profits not to waste money attempting to guess how to save the planet. There's simply no machinery in today's world that has gone all Milton Friedman on us to get our job done.