Return to Transcripts main page

Fareed Zakaria GPS

Interview with Andrei Soldatov and Julia Ioffe about Russia and Ukraine; Interview with Keyu Jin about China's Economy; China's Surprisingly Slow Economic Recovery; The Nature Of Knowledge; Navigating The Information Revolution. Aired 10-11a ET

Aired May 28, 2023 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[10:00:39]

FAREED ZAKARIA, CNN ANCHOR: This is GPS, the GLOBAL PUBLIC SQUARE. Welcome to all of you in the United States and around the world. I'm Fareed Zakaria coming to you from New York.

(BEGIN VIDEOTAPE)

ZAKARIA (voice-over): Today on the program, what is happening inside Putin's Russia? Is he losing his grip on power? Is he at odds with his own commanders? And how might his forces fare against the upcoming Ukrainian counteroffensive. We will get insight from "Puck's" Julia Ioffe and Russian journalist in exile Andrei Soldatov.

And since China opened up its economy in 1978, it has averaged almost 10 percent growth a year. But are we now at peak China? The economist Keyu Jin weighs in.

Also, has humanity gotten, well, dumber thanks to the supercomputers in our pockets that can tell us everything we need to know in an instant? I will talk to the author Simon Winchester about the past, present and future of knowledge.

(END VIDEOTAPE)

ZAKARIA: But first, here's "My Take." America's debt ceiling crisis once again provoked the usual commentary about how it shows the country is basically dysfunctional. But the truth is this unprovoked madness causing self-inflicted wounds took place against a backdrop of astonishing strength. The facts cannot be disputed, the United States has recovered from the pandemic faster than any major economy in the world.

As Bloomberg's Matthew Winkler recently points out, unemployment is stunningly low. GDP growth has grown at three times the average pace as under Donald Trump, real incomes are rising, manufacturing is booming, and inflation has now eased for 10 straight months. Even the budget deficit which was at 15.6 percent of GDP at the end of the Trump presidency, dropped to 5.5 percent of GDP at the end of last year.

The picture is even better when viewed more broadly. The U.S. remains the world's leader in business, especially in cutting-edge technology. Scholars Sean Starrs and Stephen Brooks found that looking the globe's top 2,000 companies, Chinese firms came in first in shares of global profits in only 11 percent of sectors. American firms are ranked first in 74 percent of sectors. Or look at artificial intelligence which most agree is the boldest new frontier of technology likely to shape every industry.

American companies like OpenAI, Microsoft and Google produce the best applications on the market and a host of other new startups are surging forward. As Paul Scharre points out in a "Foreign Affairs" essay, of the top 15 institutions publishing deep learning research, 13 are American universities or corporate labs. Only one, Tsinghua University, is Chinese. He notes that while China publishes more AI research than the U.S., American papers are cited 70 percent more often.

These American advantages are likely to grow dramatically now that China has been blocked from the advance chips that are absolutely essential to developing and using AI. Or consider finance. Despite the recent banking crisis, the biggest U.S. banks are now more dominant than they have ever been worldwide. They have passed rigorous stress tests and built up their capital reserves, and as a result they are now better positioned than their European and Japanese counterparts.

China's state-owned banks are saddled with huge government debt and cannot operate in the open global finance system because that would almost certainly trigger massive outflows of funds as businesspeople seek to move their money to safer havens. And despite many challenges and efforts to unseat it, the dollar remains the global reserve currency as the IMF managing directly recently said, which gives America a financial superpower.

It is one I worry we are misusing which will trigger even more efforts to replace it but there is no denying that the dollar for now reigns supreme.

[10:05:04]

As somewhat under-noticed development in recent years has been America's rise as an energy power house. Because of fracking and natural gas, the U.S. is now the world's largest producer of liquid hydrocarbons and as Columbia University's Jason Bordoff has noted, America's ability to ship liquified natural gas has made it an energy super power able to provide or cut off energy to countries around the world.

Add to these traditional energy sources the dramatic ramp up of green energy thanks to the vast tax credits and incentives in the Inflation Reduction Act and you have a picture of truly astonishing energy capacity.

America's military remains in a league of its own. Far superior to that of its rivals in Russia or China. China is catching up to the U.S. but America's lead remains vast even across many dimensions of warfare. And in Ukraine, as the Republican foreign policy (INAUDIBLE) has noted, the U.S. at minimal cost and with no U.S. troops is inflicting tremendous damage on Russia's army. Washington is also transforming the Ukrainian army into one of the most powerful armed forces in Europe.

The great force multiplier of American power remains its alliances. The U.S. has more than 50 treaty allies, China has one, North Korea. The U.S. has about 750 military bases of some kind around the world. China has one, in Djibouti.

I could go on. Unlike my rich countries, America has a strong working age cohort that will not shrink thanks to immigration. We still take in 1 million legal immigrants a year on average. China and Russia are both facing demographic declines that are almost impossible to reverse and will put a long-term damper on their growth.

Could it be that it is precisely because of this backdrop of strength that Washington's politicians and the Republican Party in particular can indulge in this crazy political theater? For most countries, the price of playing games with one's credit worthiness would be shocked and severe, and that would act as a disciplining mechanism. But in Washington, this country's basic strength has become a license for irresponsibility.

Go to CNN.com/fareed for a link to my "Washington Post" column this week. And let's get started.

In an interview with the Russian war blogger made public this week, the head of Russia's mercenary Wagner Group Yevgeny Prigozhin had this warning for the country's elite. Unless they gave up their charmed lives and pitched in on the war effort, the current moment in the country could end up looking like 1917.

He was warning, in other words, of a second Russian revolution. It was just the latest of a series of alarming critiques that Prigozhin has lodged at the Russian establishment including the current Defense minister and even implicitly Putin himself. We know about Putin's complete unwillingness to book any opposition, so why allow Prigozhin such open tirades and what does it tell us about domestic politics in Russia at the moment in this war.

Joining me now to talk about all this are Andrei Soldatov and Julia Ioffe. Andrei is a Russian investigative journalist living in exile of course in London. And Julia is a founding partner and Washington correspondent at Puck News.

Julia, give us an overview of just from what you can tell, are we overdoing it or, you know, in all this reading of tea leaves, of looking at the fact that Putin doesn't discipline Prigozhin or the defense minister or allows this all to happen, there's more going on underneath the surface than we think? What's your basic read?

JULIA IOFFE, FOUNDING PARTNER AND WASHINGTON CORRESPONDENT, PUCK: Look, there is usually something more going on under the surface. And when you're looking at such a closed and opaque system, one in which journalists like Andrei have been kicked out unceremoniously or have been forced to leave, there is very little reporting on the ground, it's hard to tell what's going on. And it's important to know what's going on when Russia's waging this

bloody criminal war in Ukraine and using people like Prigozhin to try to grind up the Ukrainian army, to take territory in the east. It's important to understand what's going on. And when you have not a lot of information, all you could do is read tea leaves and try to decipher the few public statements that these people make.

[10:10:02]

ZAKARIA: So, Andrei, describe for us your answer to this question. What is going on? Because you have a wonderful "Foreign Affairs" essay where you make some very informed speculation.

ANDREI SOLDATOV, RUSSIAN INVESTIGATIVE JOURNALIST: Well, the problem with Prigozhin is that of course he's making all these attacks and he's been attacking some military, and now it seems to be next level. He's attacking the Russian elites and threatening their kids. And that seems to be completely out of line. But at the same time, I think that it's quite interesting that Putin is still -- well, choose to tolerate Prigozhin and I think this is because Putin doesn't have a real system of check and balances.

So he needs -- especially with this war, he needs to rely on some completely unorthodox methods to keep his people, the military generals and his elites, if not under control, but at least off balance. Prigozhin, who is happy to play a role of a, well, weak jester, while he is happy to provide Putin with these options, so he's attacking these people, sending a message that, look, you cannot be completely safe and nobody has any guarantee in this new Russian system which is Russian 2023.

ZAKARIA: So, Julia, if this is the sort of world we're looking at in Russia, is it -- is Russia different from what we thought or have things changed in the sense? I think we always thought Putin was very tightly in control and the Russian state was a very tightly knit operation. That, you know, he and his security elites, the FSB and such, were in complete control. The Defense Ministry on the army saluted.

Does this suggest that it's not -- you know, it's not that much of a kind of vertical of power as we used to think?

IOFFE: Well, I think that Putin was very much in control in the security services, were very much in control. But as with anything in Russia, there are exceptions and those exceptions are corruption, stupidity, malfeasance, stupidity. I mean, I said that twice. And it was not always, you know, the tight ship that we imagined it to be over here in the West.

I do think, though, to Andrei's point, that once Putin started the war and immediately didn't win it on his terms, as we know, he did not take -- he did not take Kyiv in the first week. He did not have a victory parade in Kyiv. He is still fighting for shreds of land in the east. And at this point, he needs anything he can throw at it. And Prigozhin does two things. First, he delivered the only kind of significant territorial win in

the last few months. He delivered Bakhmut to Putin. It took him seven, eight, nine months and tens of thousands of lives but he did what the Defense Ministry run by the government could not do. And he also, to Andrei's point, he keeps the Defense Ministry in line. He keeps them kind of on their toes and trying to do better.

He is the kind of junkyard dog that keeps the elites in line. The question is what happens if the junkyard dog gets off his chain. He has a large army. He has other sources of income that aren't directly from Putin. All of his work in Africa and the Middle East have permitted him to take various mines, refineries, wells of gas and oil. That give him a separate income stream.

So he has -- you know, ironically in a country where Putin was trying to eliminate any kind of dissent, any challenges of power, which he did from the liberal flank, he allowed a guy with an army to start criticizing him which, you know, people like Alexei Navalny, Boris Nemtsov never had.

ZAKARIA: Andrei, is this -- is there an early premonition of the fact that the Russian army and the security forces are not, A, as united, and B, as loyal to Putin in these reports that I've read that Putin created his own presidential security force which some people say, I think it was in 2016, the Duma creates this special security force which its only job is to protect Putin. It only sits in Moscow. The Russian army is not allowed to enter Moscow. This feels like a Roman emperor creating his own Praetorian Guard. Does this mean that Putin doesn't trust the army?

SOLDATOV: Well, it's not that he doesn't trust the military. It's about his view of the world.

[10:15:05]

And back in the KGB he was told to view the world in terms of threats. So every situation and of course now he has a big crisis in his life. He's trying to look and to assess how risky it could be for him politically speaking, and we're not talking about the battlefield. We are talking about political forces inside of the country.

Vladimir Putin was already prominent in the 1990s and he remembers that even the disastrous Chechen war produced some very popular military generals who at some moment posed a very significant political threat to Putin's predecessor Yeltsin. So Putin understands that. He wants to avoid it. And just in case, he wants to keep his military in line. He cannot tolerate a proper competition between his security services.

So he cannot put his, say, national guard against the army, or the FSB against the SVR because it would be too risky for him. But to use someone like Prigozhin, who is -- who does have some independent income but at the same time he doesn't have any political (INAUDIBLE) apart from the one provided by Putin himself. That seems to him -- to Putin as a really good idea. Well, it works for now. Let's see how it's going to end. ZAKARIA: Stay with us. When we come back, I'm going to ask both our

guests where the Ukraine war goes next.

(COMMERCIAL BREAK)

[10:20:50]

ZAKARIA: And we are back with Andrei Soldatov, a Russian investigative journalist based in London, and Julia Ioffe, the founding partner and Washington correspondent at Puck News.

Julia, tell me, you're in Vilnius, you're attending a Future of Russia conference. What is your sense and what is the general sense of what is going to happen next with this Ukrainian counteroffensive? It has been -- you know, it's been much telegraphed. Are we going to -- are the Ukrainians going to be able to take back the territory they lost in 2022?

IOFFE: I think, you know, the offensive has become kind of a punchline at least in Washington in the sense that any question you ask any policymaker, or anybody in the think tank or on the Hill, they'll say we have to wait until the Ukrainian counteroffensive. Clearly something has begun in terms of shaping operations, like the incursion into Belgorod. The small counteroffensives around Bakhmut.

But we're still waiting for the main event, and I think it's anybody's guess. People are trying to be conservative and judicious in their predictions. People think that it will be much more difficult than the fall offensive when Ukraine won back Kharkiv and Kherson. But at this point, people in the West say, you know, in Washington, at least, in official Washington, that Ukraine has what it needs and they're waiting to see what happens.

ZAKARIA: What's your gut?

IOFFE: My gut is that Ukraine overperforms as usual, but that it won't by quite enough to -- you know, for the Russian army to collapse and for them to fully win this war. I worry that Putin is willing to throw as much fodder at the meat grinder as he wants and that he's waiting for the elections in the U.S. for a DeSantis or a Trump to win in 2024, for Republicans to retake more power on the Hill, and that Western aid will dry up and that he will just wait this out the way that Russians tend to win wars. They mess up in the beginning. They lose a lot of lives. But time or winter does the winning for them.

ZAKARIA: Andrei, what is your sense? One of the things you do hear often is where the Russians do have more -- you know, more resources. They do have -- it's a much bigger country. Much larger population. Putin can throw more troops into this meat grinder. What is your perspective when looking at it and you think about this question of, are the Ukrainians going to do well, are the Russians now so dug in, you know, after all -- in parts of Donbas for -- since 2014, so for over 10 years? Will the Ukrainians be able to push back?

SOLDATOV: That's a very good question. We know that the Russian army, while built some fortifications to -- well, to protect them from this counter offensive and we do know that of course Russia trained its troops and it looks like they're in better shape than before. At same time what is absolutely clear that lots of people in Moscow, they're very nervous about this counteroffensive.

And it looks like it's more than just about a counteroffensive. We need to remember that Putin made the point to avoid to start a new wave of mobilization because he believes that this new wave of mobilization might actually create a very fragile situation for him politically in the country. And of course it's absolutely clear that if, say, Ukrainian counteroffensive would be really, really successful, Putin would have no choice but to start these mobilizations and political risks for him would be absolutely different from what he has now.

ZAKARIA: Andrei, keep up your reporting which has been absolutely fantastic. Julia, always a pleasure to hear your perspective. You always enlighten us. Thank you both.

[10:25:01]

Next on GPS, global trade, innovation and growth depend in large part on the world's second largest economy, China. But my next guest says we don't really understand China's economy, and she will explain it to us when we come back.

(COMMERCIAL BREAK)

ZAKARIA: With demographic challenges, political missteps, international competition, is China's economy about to peak?

That was the question posed in a recent issue of "The Economist." Here to help answer is Keyu Jin, professor at the London School of Economics who has just released a book called "The New China Playbook: Beyond Socialism and Capitalism."

Keyu, welcome. So the big surprise which I think has given some of this kind of predictions for us, the biggest surprise economically this year has been the Chinese economy has not recovered as fast as many people were expecting. Why do you think that is?

[10:30:00]

KEYU JIN, PROFESSOR OF ECONOMICS, LONDON SCHOOL OF ECONOMICS: Well, China has the opposite problem to the U.S. which is lack of demand especially in private sector demand. We have got to ask why. The main reason is a severe loss of confidence built over the years in the pandemic and a greater uncertainty.

So more than 10 years ago the state can just call on Team China, state banks, SOEs, flushing with capital and then build roads and the GDP will go up. Today, the private sector is firmly in the driver's seat and they have to do the heavy lifting. But their confidence is not back.

ZAKARIA: What do you say to the "Economist's" cover story which says, you know, China has peaked and that you know the argument it's fundamentally about demographics. You're not going to get as much innovation with the state in charge. You with you have all of these international challenges, cutting off of supply chains. So, China is -- they're not predicting a collapse at all but a kind of plateau that China will kind of muddle along roughly where it is now.

JIN: If China manages to grow at 1.5 percentage points faster than the U.S., which is something totally feasible, it will be the world's largest economy in a little over 10 years. But let's not underestimate the fact that there are 600 million people still in China with less than $300 of monthly income. There will be a huge boost to the consumption if they reach middle income by international standards.

Let's not underestimate the whole nation approach to innovation not casting -- not telling the cost, casting the net wide. The all encompassing, you know, industrial chain, the proximity between AI companies and chip industries, and the huge market and the enterprising people, these are major forces. And, look, if demographics didn't explain the China going on the way up, it won't explain its way on the down -- downwards.

ZAKARIA: To you it seems like in the book the biggest misconception people had is they look at the political centralization of China and they assume that you also had economic centralization. Whereas, in fact, you're saying that's what you call the mayor economy. The economy really is run by hundreds and hundreds of mayors and local -- and they're very market friendly.

JIN: Yes. Exactly, Fareed. If you don't understand how that model works, you don't get China and you're not going to know where China is going. It is not a centralized approached dominated by an all mighty state that determines everything. Instead, we need to look at what is happening on the ground. The local mayors combined with the entrepreneurs galvanizing innovation.

You know, if you look at the unicorns as distributed across the country it is all over China. It is not concentrated in Beijing, Shanghai and Shenzhen it's everywhere in the second-tier cities like Wuhan and Hefei. And the local mayors have an incentive to promote the best companies and they're working with hundreds and thousands of entrepreneurs, not just supporting one or two national champions.

ZAKARIA: The U.S. has made a very concerted effort to deny China the ability to access the very highest end computer chips which are the heart of, you know, a lot of advanced military technology, but also AI and quantum computing. What will be the effect of that ban?

JIN: I thinks in short run there is going to be a big damage to many companies in China. But we have to understand that for every action, there is a reaction, and they are unexpected outcomes. Now, you have all of this demand which was formerly going to American companies now redirected back to Chinese chip companies, and of course the state flushing them with capital.

But even more importantly, China has a very self-enclosed industrial supply chain which means the proximity of the ultimate downstream players like AI companies, autonomous vehicles, their proximity to the chips industry gets this very quick feedback loop and demand. And if we look at Japan, part of the rise of the semiconductors industry was the rise of the Japanese electronics companies. But they were in close proximity.

So you can imagine the chip company sitting in Europe and the U.S. and feeding back that is not actually going to work.

ZAKARIA: So what you are saying is that this ban might have the effect actually in the medium term of accelerating China's own domestic chip industry and move it up the value chain?

JIN: It has already done so. And look, there are so many companies trying to come up with new chip designs just to circumvent these rules. It is also -- it is almost a strategic gift. But we have to understand in the short run, many companies will have to suffer.

ZAKARIA: But you're basic message is don't count China out?

JIN: Exactly.

ZAKARIA: Keyu Jin, pleasure to have you on.

JIN: Great to be with you, Fareed.

ZAKARIA: Next on GPS, from petroglyphs to papyrus to printing presses to a phone in everyone's pocket. All about the evolution of knowledge and how we pass it down. We will be back with that in a moment.

(COMMERCIAL BREAK)

[10:38:54]

ZAKARIA: From the invention of the other GPS, the global positioning system, to the emergence of artificial intelligence, applications like ChatGPT, humans have become increasingly dependent on bits and bytes and silicon chips for knowledge. At one point in time we used maps and the stars to navigate and spent days seeking information that is now at our finger tips. So, what effect are modern advancements having on our brain? And in a world where knowledge is so much more findable and fleeting, what is its value?

My next guest, Simon Winchester, asked these questions and more in his new book, "Knowing What We Know: The Transmission of Knowledge From Ancient Wisdom to Modern Magic." Simon, what a pleasure.

SIMON WINCHESTER, AUTHOR, "KNOWING WHAT WE KNOW": Thank you very much. It's lovely to be back with you.

ZAKARIA: So, when do you think we first begin to realize that we have this thing called knowledge that we're trying to pass on?

WINCHESTER: I think the beginning was in Mesopotamia, really, when -- of course, it is relatively more easy for us to know when knowledge transmission began if there are written documents to display it.

[10:40:05] I think once cuneiform language began south of Baghdad, then we can tell about lessons, about the teachings of things that happened. And so, the first school in a town called Nippur there are records which show children learning things, being taught things. And interestingly enough writing them all with their little sharpened quills on tablets of Euphrates mud and then getting it wrong and maybe throwing that tablet away, and the next morning another child being asked to get water from the Euphrates turning this broken piece of pottery back into mud and drying it on the bread oven then using it again.,

They were not only learning things but they were being sustainable from day one. So, it is a magical story on several levels.

ZAKARIA: And do you think that at some point there is a kind of recognition that this is -- that there are important bodies of knowledge to pass on, you know, and therefore the writing is done kind of for posterity?

WINCHESTER: Very much so. And I think that is particularly noticeable among the Greeks. I mean, may well have been those among the Mesopotamians, will come to Greeks so to that great triumvirate of Socrates first and then Plato and then Aristotle. Then they got to grips with it and started to think, a, we have got to pass this on. But what is it? And he came up with this still extant today, it is justified true belief.

I belief you to be a man. I know you're a man. But you're Fareed Zakaria. I'm pretty sure there is a picture of Fareed that justifies my belief. You, therefore, I know I have the knowledge of who you are.

ZAKARIA: It is provable.

WINCHESTER: Provable. Exactly. Justifiable. My belief if justifiable. Because the difference between belief and knowledge is -- particularly when we get to churchly matters is a profound and very serious difference which is why, you know, a large number of people in this country still believe that the Earth was formed 4004 BC at 9:30 in the morning. No justification for that. But belief is still a powerful beast.

ZAKARIA: So, now come to, you know, the explosion of knowledge, the explosion. And let's first deal with stuff like Google and Wikipedia. I mean, it seems to me there has been a kind of a much larger change than we've actually incorporated which is we know everything in the sense that we can get access to it. And I wonder about this now when I watch my kids at school. Why are we teaching so many facts when the facts are all easily available?

WINCHESTER: It is a hugely important question. I mean, remember how Karl Popper's famous dictum that knowledge is finite but ignorance is infinite. There's an awful lot more than that that we have no idea about.

But, yes, I think the point you make is a very valuable one. I mean, yes, I can find out the name of the capital of South Dakota even its pronunciation, which is not what you'd think as you know. I can find out the atomic weight of sodium. I can find out the principal figures in the enlightenment, reformation or whatever.

But do I really need to know these things? I mean, Aristotle didn't know them. Plato didn't know them. Socrates didn't know them. And yet they managed to have profound thoughts about the role of humanity and laid down for us a template of how perhaps we should behave.

I mean, the classic is Aristotle's view of this concept called eudaimonia, winning happiness not through pleasure but through achievement and doing the right thing. Now, that may not sound too profound a thought now more than the sort of thing that you'd hear from the pulpit. But nonetheless, it was thought about, put down on paper or vellum or parchment or whatever by someone who had no idea of the capital of South Dakota or the name of the senator from New York or wherever.

ZAKARIA: More broadly, do you -- do you worry that the fact that we can know everything is making us dumber?

WINCHESTER: No, I thought initially -- I think, when I started writing this book, I thought that was the premise. Is everything that began with the invention of the electronic calculator by a man called Jerry Merryman, wonderful name, in 1967 -- that began, if you like, the rot. That is when labor saving devices started working on our brains. We didn't know how to -- need to know how to calculate, how to spell, how to find out where we were, how to know anything.

And then initially I thought this is going to make us dumber. I mean, it has made us fatter and flabbier, the labor saving devices, the physical labor saving devices, but the mental ones will it make our brains dumber? I mean, will it -- and the ultimate question is, will it remove the possibility of wisdom from society? Because wisdom surely is a lot of knowledge multiplied by a lot of age, old, wise people.

[10:45:04]

We need them in society. But then I thought, well, wait a minute. Maybe what all these devices are doing is actually purging our brains of the stuff we don't need. Because with great respect to the people of South Dakota, we don't need to know the capital or the fact that it is called Pierre not Pierre.

So, it is like holding a brain under a cold tap and getting the unnecessary stuff away. Leaving us like Plato, arrogant that may be to say, enabling us to think the important things in life. So actually I'm quite optimistic. About ChatGPT 4, I'm not so sure. That is a game-changer. Mercifully, we got some of it into the book but it is happening so fast that -- wait for the paperback.

ZAKARIA: Boy, that is -- so every man a Plato, as it were.

WINCHESTER: Every potential Plato is us.

ZAKARIA: Simon Winchester, pleasure to have you on.

WINCHESTER: Fareed, thank you very much indeed. ZAKARIA: Next on GPS, obesity is at an all-time high in America and worldwide. There may be hope. This time not in the form of a diet fad on an exercise craze. That story when we come back.

(COMMERCIAL BREAK)

[10:50:25]

ZAKARIA: And now for the last look. Everybody I know is on it, a reality TV star told the "Wall Street Journal." It's the drug of choice these days for the one percent, a dermatologist said to "The New York Times."

They are talking about semaglutide, the active ingredient in two medications flying off pharmacy shelves in the U.S. right now. The first, Ozempic, came on to the scene in 2017 as a diabetes treatment. But the patients in clinical trials reported losing significant weight. And rather than include the reaction as a side effect, its maker, Novo Nordisk, turned it into lucrative selling point.

By 2021, the Danish drugmaker started selling Wegovy, a weight loss specific dose of semaglutide aimed at treating obese and overweight adults. Early results seemed remarkable. Company sponsored studies have indicated that those on Wegovy can expect to lose around 15 percent of their body weight after nearly a year and a half of treatment.

And as users celebrate their slimmer waistlines, investors and medical companies are eyeing fat profits. The bank UBS thinks semaglutide could be the biggest drug ever. And some estimates project that Novo Nordisk could sell between $3 to $4 billion worth of it in the United States this year alone.

After all, diet and weight loss is big business. Americans spent $76 billion last year alone trying to shed pounds. That is money spent on everything from medical programs to gym memberships to diet soda. But behind all of the fads and follies lies a stark reality.

Today, obesity is at an all-time high. More than 40 percent of American adults are obese, and obesity is a major gateway illness leading to complications like diabetes and heart disease. The conditions and complications caused by obesity put huge strains on America's health systems and its economy. With the Milken Institute estimating that in 2018 obesity cost the United States $1.39 trillion or nearly seven percent of that year's GDP.

And obesity is not just a problem in the first world. Rates are rising quickly in middle income and poor countries as well. The World Obesity Federation projects that by 2035, nearly half of the adult populations of Mexico, Iran, South Africa and Algeria will all be obese. And so as "The Economist" points out, these new obesity drugs could potentially improve the health of billions and also make the world wealthier.

(BEGIN VIDEO CLIP)

ANDY COHEN, TALK SHOW HOST: Dolo, you look thin. DOLORES CATANIA, T.V. PERSONALITY: Thank you.

COHEN: Ozempic?

CATANIA: Yes.

(END VIDEO CLIP)

ZAKARIA: Well, they've gone so popular among celebrities in the U.S. that everyone from the cast of the reality TV series "Real Housewives" to tech mogul Elon Musk are talking about them. Ads have even been plastered around the New York City subway and people from Hollywood to the Hamptons are rumored to be using them just to drop a few extra pounds.

So, how do the drugs work? Their exact mechanism of action is not known. They're believed to regulate blood sugar levels and imitate a hormone to signal to users' brains that they feel full. They may also slow the movement of food through the stomach.

Some scientists are now studying the possibility that these injections could quell more than just food cravings. Sarah Zhang in the "Atlantic" writes that many users experienced a decrease in alcohol use, smoking, shopping, and even nail biting while taking the drugs.

Scientists do not yet have a complete picture as to why these behaviors change in some people, but early reports suggest that it could be due to the drugs' impact on the brain's reward pathways. Addiction researchers have taken note. These drugs could be a real game-changer. But there is still a lot left to learn about how they work and what kind of long-term impact they may have.

For starters, they come with an increased risk of pancreatitis, gallstones and renal failure, according to the drug's prescribing information. Use of the drug in rodents during clinical trials even led to an increase in thyroid cancer. Of course, these are risks that may be worth it for those suffering from serious medical conditions like obesity.

[10:55:00]

But may not be for people just looking to have beach-ready bodies by summer. The shots also don't address the underlying drivers of America's obesity epidemic. The drugs may be useful to treat obesity as a disease but attention should also be given to prevention. Government policy should encourage easier access to affordable and fresh produce and high quality proteins as well as wind down farm subsidies that have made artificial sweeteners like high fructose corn syrup ubiquitous in American diets.

And as people brag on the internet about how the drugs have lessened their appetites enough to make them eat like a toddler, some specialists worry that casual use could put more people at risk of developing an eating disorder. Their arrival has also intensified society's fixation with being thin online. As social media influencers have drive the conversation toward unrealistic beauty standards. The bottom line is that this is a good news story, the new class of drug shows great promise in our battle against the bulge and it may be transformative in the fight against obesity. But it is important to proceed with caution and to remember that our vanity is easily exploited.

Thanks to all of you for being part of my program this week. I will see you next week.

(COMMERCIAL BREAK)

[11:00:00]