1 00:00:05,280 --> 00:00:11,790 Good afternoon, everyone, and welcome to the latest in a series of conversations that the Oxford Martin School has been 2 00:00:11,790 --> 00:00:18,520 arranging around the broad topic of what having gone through a pandemic means going ahead, 3 00:00:18,520 --> 00:00:25,140 thinking about the major challenges of the 21st century before introducing our two guests this afternoon. 4 00:00:25,140 --> 00:00:30,180 Can I welcome all our external audience and can I encourage you to ask questions? 5 00:00:30,180 --> 00:00:32,880 If you look at the bottom right of your screen, 6 00:00:32,880 --> 00:00:40,530 you should see a little button that says Ask a question and you have the opportunity to type in a questionnaire, 7 00:00:40,530 --> 00:00:50,040 and you also have the opportunity to vote on that question. And it's really helpful for me in asking questions to our guests to know which are 8 00:00:50,040 --> 00:00:55,920 which are those that most people people are most interested to get to get answers for. 9 00:00:55,920 --> 00:00:59,610 And just to remind you that we are recording this session. 10 00:00:59,610 --> 00:01:02,820 So if you ask a question, your name may go alive. 11 00:01:02,820 --> 00:01:11,670 So let me go straight to introducing our two guests with hugely lucky to have this afternoon two of Britain's most distinguished economists. 12 00:01:11,670 --> 00:01:18,420 First, we have support Collier, who's professor of economics and public policy here in Oxford, the Blavatnik School. 13 00:01:18,420 --> 00:01:23,940 And Paul is also a professorial fellow at St Tanzania's Paul, founded at Oxford, 14 00:01:23,940 --> 00:01:30,420 the Centre for the Study of African Economies, and hasn't and has had many roles outside Oxford, 15 00:01:30,420 --> 00:01:38,190 including a five year secondment to the World Bank and many advisory roles within UK governments and foreign governments as well. 16 00:01:38,190 --> 00:01:45,300 Paul writes, were both a technical and a general audience, and amongst his books were more general audience, 17 00:01:45,300 --> 00:01:50,130 which many of you I know will recognise as the bottom billion the plundered planet. 18 00:01:50,130 --> 00:01:55,710 The future of capitalism and most recently, greed is bad, 19 00:01:55,710 --> 00:02:01,710 which is the book that we're going to talk about this afternoon and which you wrote with our second guest, John John Key. 20 00:02:01,710 --> 00:02:10,830 Again, one of the UK's major economic thinkers, John has been an academic at Oxford and the LSC journalist in the Financial Times, 21 00:02:10,830 --> 00:02:18,960 research director at the Institute of Fiscal Studies, as well as many roles in the private sector with government. 22 00:02:18,960 --> 00:02:29,550 John published in 2012, a major report which has become known as the K Review in UK equity markets and long term decision making. 23 00:02:29,550 --> 00:02:36,540 John also writes wonderful books for a general audience, and these include other people's money, the real other people's money, 24 00:02:36,540 --> 00:02:40,890 with the subtitle The Real Business of Finance recently with Melvyn King, 25 00:02:40,890 --> 00:02:48,060 Radical Uncertainty and the book that we're going to be exploring some of the issues around this afternoon. 26 00:02:48,060 --> 00:02:59,310 Greed is dead, and of course, greatness that reminds us deliberately of the film all straight and the failure of Gordon Gekko. 27 00:02:59,310 --> 00:03:08,040 Greed is good, and I think when we all saw the film must known economists, we sort of assumed that that was a correct caricature. 28 00:03:08,040 --> 00:03:19,890 But as you talk about in the book, in some ways, Greed Is Good is a statement of a political philosophy and one backed up by a lot of equations. 29 00:03:19,890 --> 00:03:25,710 John, could I get you to explore some of these issues and your concerns around the what 30 00:03:25,710 --> 00:03:30,960 you call the economic individualism that this economic philosophy has engendered? 31 00:03:30,960 --> 00:03:36,900 It's interesting, Charles, that you read into it in that way because a friend of mine was working for an 32 00:03:36,900 --> 00:03:44,470 investment bank at the time to a group of clients to a showing of that film. 33 00:03:44,470 --> 00:03:50,560 And he told me that the majority of the clients who went there genuinely did not 34 00:03:50,560 --> 00:03:56,830 understand that this was not intended to be a sympathetic portrayal of Wall Street. 35 00:03:56,830 --> 00:04:02,320 They thought this was what it was like and good on them. 36 00:04:02,320 --> 00:04:07,180 And that was what happened the decade of the of the eighties. 37 00:04:07,180 --> 00:04:09,700 And that was, in a sense, my experience too. 38 00:04:09,700 --> 00:04:22,150 Because as you mentioned, I taught economics in Oxford for many years, and when I taught students beginning giving students economics, I taught. 39 00:04:22,150 --> 00:04:28,810 So the models based on maximising rational individuals. 40 00:04:28,810 --> 00:04:36,370 And when I became engaged with the business world, I realised that it wasn't really like that. 41 00:04:36,370 --> 00:04:44,290 It wasn't like it for two reasons. One was that people actually have multiple motivations. 42 00:04:44,290 --> 00:04:50,050 And while they have material ones, there are only parts of they are. 43 00:04:50,050 --> 00:04:52,090 And secondly, they couldn't optimise. 44 00:04:52,090 --> 00:05:01,300 They couldn't maximise in the way they did in my models because actually, we don't know enough about the world to be able to optimise. 45 00:05:01,300 --> 00:05:07,890 And that has influenced me ever since. But what I also realised was that the models, 46 00:05:07,890 --> 00:05:16,290 which I had been teaching had actually come to have a huge influence on what was actually happening in the world, 47 00:05:16,290 --> 00:05:26,220 that we had the cults of shareholder value. We had the explosive growth of the financial sector so that it became as it were self-fulfilling. 48 00:05:26,220 --> 00:05:36,840 There was a world of greedy people. And in a world of greedy people, there is very little you can sensibly do yourself except be greedy. 49 00:05:36,840 --> 00:05:47,250 And the result of that was the the kind of sale of worthless products that led up to the 2008 financial crisis. 50 00:05:47,250 --> 00:05:52,680 The result of that was the explosive growth of executive remuneration. 51 00:05:52,680 --> 00:06:00,070 And most of all, the results of that was actually the decline of what I call the iconic companies. 52 00:06:00,070 --> 00:06:09,600 The British industry that Eisai was Britain's leading industrial company for most of the 20th century. 53 00:06:09,600 --> 00:06:13,650 It disappeared in the first decade of the 21st, 54 00:06:13,650 --> 00:06:21,780 and the second largest industrial company in the nineteen nineties was juicing, to which much the same happened. 55 00:06:21,780 --> 00:06:29,530 And Marks and Spencer in the nineteen nineties turned its focus to increasing profits, 56 00:06:29,530 --> 00:06:36,560 making profits of a billion pounds a year, which it did once in 1998. 57 00:06:36,560 --> 00:06:44,570 And then its sales fell off a cliff. People no longer regarded Marks and Spencer with all they once have done, 58 00:06:44,570 --> 00:06:56,530 and they have never made that level of profit again was actually a selfishness that destroyed motivation and actually destroyed many great companies. 59 00:06:56,530 --> 00:07:06,220 To what degree was the structure of business determined by the underlying prevailing economic orthodoxy? 60 00:07:06,220 --> 00:07:09,550 Or was it the other way round that the orthodoxy was developed to? 61 00:07:09,550 --> 00:07:15,910 No, in order to support the people who were making a lot of money from the prevailing business structures? 62 00:07:15,910 --> 00:07:25,180 I said I think they were mutually reinforcing. People in business weren't being influenced by the the matter of mathematics, 63 00:07:25,180 --> 00:07:37,330 which I taught students in elementary courses that they were being influenced by the fact that this orthodoxy worked rather well for them, 64 00:07:37,330 --> 00:07:44,020 and we saw the amazing amounts of money that were made by employees in the financial sector. 65 00:07:44,020 --> 00:07:52,870 And we saw the ways in which, as I described, executive remuneration exploded. 66 00:07:52,870 --> 00:08:02,560 I remember once taking a retired chief executives of were major British company to my class at London Business School, 67 00:08:02,560 --> 00:08:12,130 and at the end of it, he said to me, You know, these kids regard being chief executive of a company as a prise rather than a responsibility, 68 00:08:12,130 --> 00:08:20,180 and that that sentence encapsulated for me the change in the world, in the business world, which it occurred. 69 00:08:20,180 --> 00:08:25,640 If I can go off on a slight trajectory because you've been talking about teaching economic 70 00:08:25,640 --> 00:08:32,660 models and the assumptions that that's that makes about the nobility of the future. 71 00:08:32,660 --> 00:08:37,340 And you've written recently, but my thinking, as I mentioned in the introduction, 72 00:08:37,340 --> 00:08:41,730 your concern about how much economic theory is based on assumptions about, 73 00:08:41,730 --> 00:08:49,620 you know, ability, how badly it's not affecting economic policymaking at the moment, quite badly. 74 00:08:49,620 --> 00:08:55,220 I was very much part of what real? What's the lead up to the financial crisis, 75 00:08:55,220 --> 00:09:06,440 the belief that we could control things with models because we had a knowledge and understanding of the world that we didn't have and possibly have. 76 00:09:06,440 --> 00:09:13,640 In the book, we talk about the famous statement by David Benioff, who was CFO of Goldman Sachs at the time, 77 00:09:13,640 --> 00:09:22,880 who said as the financial crisis broke, we've been experiencing twenty five standard deviation events several days in a row. 78 00:09:22,880 --> 00:09:31,790 Now, you don't have to know very much about statistics to know that it's impossible to experience twenty five standard deviation events. 79 00:09:31,790 --> 00:09:42,080 What he meant, of course, was that the Goldman Sachs models didn't even begin to describe the world in which Goldman Sachs were actually operating. 80 00:09:42,080 --> 00:09:52,640 And similarly, even though macroeconomic policy is influenced by frameworks concerned with rational expectations and general equilibrium, 81 00:09:52,640 --> 00:09:58,400 which bear very little relation to the way in which macro economies actually function, 82 00:09:58,400 --> 00:10:07,580 and so much of which is based on maximising personal utility, which is the sort of two planks of your concern about individualism. 83 00:10:07,580 --> 00:10:14,660 And the other part, perhaps if I could turn to Paul, is your concern about political individualism, 84 00:10:14,660 --> 00:10:19,670 and there were very few people will get up and defend Gordon Gekko. 85 00:10:19,670 --> 00:10:24,830 Then you mount broadside against a political philosopher, John Rawls, who many people, 86 00:10:24,830 --> 00:10:30,590 especially on the on the left, sort of consider almost a secular saint. 87 00:10:30,590 --> 00:10:38,630 Might you tell us a little bit about your concerns about this strand of political individualism, especially on the left of centre? 88 00:10:38,630 --> 00:10:44,000 Yes, our fears of philosophical st. 89 00:10:44,000 --> 00:10:50,900 Is Michael Sandel, who's got this wonderful new book, The Tyranny of Merit. 90 00:10:50,900 --> 00:11:03,500 And whereas Rules was concerned with what he called Distributive Justice Sandel, 91 00:11:03,500 --> 00:11:13,400 it has a much more solicitous faces contribute to justice, and that's built to what that means. 92 00:11:13,400 --> 00:11:18,770 We are as keen on rights as anybody else, right? 93 00:11:18,770 --> 00:11:28,470 We don't want a society without rights, but rights with our obligations are completely empty. 94 00:11:28,470 --> 00:11:36,330 Rights depend on someone somewhere. Having obligations to fulfil those rights. 95 00:11:36,330 --> 00:11:42,100 So the the the easy bit is claiming the rights. 96 00:11:42,100 --> 00:11:50,510 The hard bit in generating rights is generating the obligations, where do they land? 97 00:11:50,510 --> 00:12:00,790 And the difference between rules and Sandell is where those obligations land because what 98 00:12:00,790 --> 00:12:09,790 we've actually lived through over the last 40 years is people increasingly claiming rights, 99 00:12:09,790 --> 00:12:17,260 whereas whilst they walk away from obligations. 100 00:12:17,260 --> 00:12:24,640 Robert Putnam has marvellous new book called The Upswing, where he plots amongst many, many other things. 101 00:12:24,640 --> 00:12:36,880 But one ingenious and sort of graphic little thing is how many times you observe the word me compared to the word we. 102 00:12:36,880 --> 00:12:53,590 So do people see the world as me or as we are and what we find is from Putnam is there's a systematic inverted you from from 1997. 103 00:12:53,590 --> 00:13:00,760 Looks very much like 2020, and it's the the ascendancy of me. 104 00:13:00,760 --> 00:13:07,860 The meat we frequency is at its peak, both in 1980 and 2020. 105 00:13:07,860 --> 00:13:12,740 And since about the mid 60s, we've seen a steady decline. 106 00:13:12,740 --> 00:13:21,010 The peak of we society was in the 60s and we've seen a steady decline, a retreat from we towards me. 107 00:13:21,010 --> 00:13:28,030 And the counterpart of that is me just wants to the obligations of someone else. 108 00:13:28,030 --> 00:13:33,510 And so where the obligations lend now with the state? 109 00:13:33,510 --> 00:13:44,280 And that doesn't work, the state gets completely overburdened with obligations, and all of the individuals in it say, not me. 110 00:13:44,280 --> 00:13:50,370 I don't want to pay tax. I don't want to do this. I want my individual freedom. 111 00:13:50,370 --> 00:13:58,500 And you know, we've we've seen very recently that individual freedoms sometimes comes at the expense of the common good. 112 00:13:58,500 --> 00:14:07,350 So the the the secret of building rights robustly is mutuality. 113 00:14:07,350 --> 00:14:13,890 And this is what contributed to justice means everybody needs to be contribute contributing. 114 00:14:13,890 --> 00:14:21,030 They need to be morally load bearing and so that we all contribute to the whole world. 115 00:14:21,030 --> 00:14:32,010 Why do we need that? Partly because otherwise these obligations can't be met satisfactorily, but mainly because it gives us all agency. 116 00:14:32,010 --> 00:14:41,040 If we are all agents in the common good, then we will own that common good and we have dignity. 117 00:14:41,040 --> 00:14:49,240 The distributive justice notion was what encouraged New Labour to put the north of England on Benefit Street. 118 00:14:49,240 --> 00:14:58,400 People are just consumers. They echoed actually economic man in economic man, the only thing that gets us higher utility is our consumption. 119 00:14:58,400 --> 00:15:03,350 Well, obviously with real people. 120 00:15:03,350 --> 00:15:13,760 What gives? I don't even like to call it utility, but if we express it in economic terms and what people value is not just their own consumption, 121 00:15:13,760 --> 00:15:24,410 it's the respect that they get from others and they get self-respect from being valued in a community. 122 00:15:24,410 --> 00:15:33,200 And that building of a rich, dense web of mutuality is what makes a great society. 123 00:15:33,200 --> 00:15:41,840 If we look at the societies which routinely top all the measures, both of income equality, 124 00:15:41,840 --> 00:15:49,400 well-being, it is places like Denmark and Norway, and they just webs of mutuality. 125 00:15:49,400 --> 00:15:58,280 They're so good at building common purposes and then sharing out the obligations to meet them. 126 00:15:58,280 --> 00:16:08,870 That's why, as you come to our guests, they've been had such a successful experience with COVID that everybody's willing to behave responsibly. 127 00:16:08,870 --> 00:16:16,940 And clearly, political philosophers can can provide a rationale for these these movements, but they don't drive them. 128 00:16:16,940 --> 00:16:24,410 And I was wondering the degree to which you think that this rise of individual individualism within, 129 00:16:24,410 --> 00:16:30,200 say, our country, the UK has been driven, first of all by what do you say, 130 00:16:30,200 --> 00:16:36,050 David Goodhart phrase that the society is now split into people who have a sense 131 00:16:36,050 --> 00:16:41,990 of place somewhere as opposed to the no way the anybody has the pardon and 132 00:16:41,990 --> 00:16:50,240 also the issues around meritocracy that we and we have a meritocracy and many 133 00:16:50,240 --> 00:16:54,950 people automatically think that by definition of meritocracy must be good, 134 00:16:54,950 --> 00:17:01,910 forgetting that it disadvantages a very large fraction of society. 135 00:17:01,910 --> 00:17:11,130 Well, it depends what we mean by I mean, it's obviously good the competent people should be should be doing holding responsible positions. 136 00:17:11,130 --> 00:17:17,630 So the critique of meritocracy is not saying let's have random incompetence. 137 00:17:17,630 --> 00:17:30,110 Obviously not. And I think are two I don't particularly like the the every, somewhere, somewhere, everywhere or whatever. 138 00:17:30,110 --> 00:17:34,190 I prefer the concept and which are actually economic concepts. 139 00:17:34,190 --> 00:17:45,460 Insiders and outsiders and insiders are the people who are basically close to power. 140 00:17:45,460 --> 00:17:55,210 And Britain is so centralised, those political power in London and financial power in London that the people, 141 00:17:55,210 --> 00:18:03,090 the Londoners and the young and Oxford the sort of almost London by the sea as it were, 142 00:18:03,090 --> 00:18:11,170 that we're we're naturally closely connected and we don't even realise that most people are not like that. 143 00:18:11,170 --> 00:18:16,480 Most people are outsiders. So the concept was coined in directions to the labour market. 144 00:18:16,480 --> 00:18:29,710 The people who was secure in, you know, in their jobs, exemplified by academics and the people who and who are in precarious jobs. 145 00:18:29,710 --> 00:18:42,810 And so that's I think one fundamental distinction is the the outsiders and got such a bad experience and the insiders had such a good experience, 146 00:18:42,810 --> 00:18:52,300 the insiders who were running things. That's, you know, a definition of insider that the people with influence, both in finance and in government. 147 00:18:52,300 --> 00:18:59,590 The insiders didn't even realise what was happening with the outsiders, how life was like for them. 148 00:18:59,590 --> 00:19:03,220 And the other concept is this meritocracy. What? 149 00:19:03,220 --> 00:19:06,460 Why is Sandel critiquing meritocracy? 150 00:19:06,460 --> 00:19:16,780 Because the insiders who are so successful come to believe that the reason they're so successful is that individually brilliant. 151 00:19:16,780 --> 00:19:25,990 That's the individual, isn't it? And so they think I'm really successful because I deserve it. 152 00:19:25,990 --> 00:19:37,090 That's the move that makes meritocracy stink, because what's then the narrative by extension with the people who don't make it? 153 00:19:37,090 --> 00:19:42,490 You not made it because you're no good, you deserve to lose. 154 00:19:42,490 --> 00:19:53,800 And that leaves these people bereft of dignity because the narratives of the insiders actually become the dominant narratives in the country. 155 00:19:53,800 --> 00:20:02,470 Even some of the outsiders pick them up and start to see themselves in that light and insult to injury. 156 00:20:02,470 --> 00:20:08,740 Michael Young coined the phrase Meritocracy, wrote the book The Rise of the Meritocracy, 157 00:20:08,740 --> 00:20:13,600 and many people don't realise now that what he was describing was a dystopia. 158 00:20:13,600 --> 00:20:18,520 Yes. And 30 years after he wrote the book, 159 00:20:18,520 --> 00:20:27,610 he wrote an article describing the extent to which what he had predicted in that book could actually come to pass with a striking phrase. 160 00:20:27,610 --> 00:20:34,600 I think when he said, What is it like in a meritocracy to be told you are without merit? 161 00:20:34,600 --> 00:20:40,450 No underclass, he said, has ever been left as morally naked as that. 162 00:20:40,450 --> 00:20:48,890 And we need to understand that the things that concern people today, people talk almost endlessly about inequality. 163 00:20:48,890 --> 00:20:55,270 This is not about inequality in the sense of inequality of incomes that may be part of it, 164 00:20:55,270 --> 00:21:00,250 but it's not the essence of it is a sense of being respected, 165 00:21:00,250 --> 00:21:08,800 which has gone from a kind of communities that in which working class people voted for Trump, in which they voted Conservative, 166 00:21:08,800 --> 00:21:17,800 not just in 2019, have been voting conservative increase in increasing proportions for the last two years. 167 00:21:17,800 --> 00:21:23,470 And we see similar kinds of developments in Germany with the rise of FDR. 168 00:21:23,470 --> 00:21:28,030 And in France with the activities of zero zero. 169 00:21:28,030 --> 00:21:39,130 And, of course, the the the the the man who coined meritocracy was the same man who had written the Labour manifesto of 1945. 170 00:21:39,130 --> 00:21:44,110 He wasn't a highly conservative, he was a passionate Labour supporter. 171 00:21:44,110 --> 00:21:55,210 But he was seeing the danger of basically of the insiders, both on the left and the right, walking away from ordinary people. 172 00:21:55,210 --> 00:22:03,460 The right never engage with ordinary people. But his worry was that the left was walking away from ordinary people, the organised inside of left. 173 00:22:03,460 --> 00:22:08,950 And of course, that's what we've seen in political parties with the left across the western world. 174 00:22:08,950 --> 00:22:13,270 Whether it's the Labour Party in the U.K., the Democrats in the US, 175 00:22:13,270 --> 00:22:19,720 the SPD in Germany, or when the French left is essentially collapsed in this sense. 176 00:22:19,720 --> 00:22:28,180 It's a division between the merits of Croats who have made it and are obsessed with issues of identity. 177 00:22:28,180 --> 00:22:38,130 Politics were entirely divorced from the traditional concerns of the left before the needs and aspirations of working class people. 178 00:22:38,130 --> 00:22:43,150 And I think the message about a greater equality of esteem it is important for everyone is 179 00:22:43,150 --> 00:22:48,290 perhaps particularly important for us in such privileged positions as we are in Oxford. 180 00:22:48,290 --> 00:22:57,340 I'm one of the fascinating things in your book is you talk a little bit about the history of of communitarianism, 181 00:22:57,340 --> 00:23:02,650 taking it all the way back to Adam Smith and pointing out as other people have done, 182 00:23:02,650 --> 00:23:12,100 that he wrote two books and that the theory of moral sentiments has many of the many of the things that are not associated with with free markets. 183 00:23:12,100 --> 00:23:18,580 And of course, militarism over the years has had a pushback from other liberals, 184 00:23:18,580 --> 00:23:33,900 with accusations that it can lead to the society determining moral norms and forcing confirm conformity and. 185 00:23:33,900 --> 00:23:40,650 Inhibiting Liberty, and it points to some of its origin, then, for example, Catholic communitarian. 186 00:23:40,650 --> 00:23:50,120 How do you respond to the classical liberal attacks on on communitarianism? 187 00:23:50,120 --> 00:23:56,990 It's an interesting question, and of course, the revival of humanitarianism actually came in large part from Oxford, 188 00:23:56,990 --> 00:24:01,520 with Elizabeth Armstrong and Charles Taylor followed. 189 00:24:01,520 --> 00:24:07,140 Then by then it's quite important to say he's a Catholic, obviously became a Catholic. 190 00:24:07,140 --> 00:24:12,500 I was a MacIntyre. I mean, Paul said, Michael Sundial was this philosophical hero. 191 00:24:12,500 --> 00:24:24,740 I think mine is is mercantile because actually, it was MacIntyre who introduced to me the idea of an associate in ethics, virtue ethics, essentially. 192 00:24:24,740 --> 00:24:36,320 And me from that is to say, you know, and took me from that to understanding that what wasn't meant by a good business was actually the same as 193 00:24:36,320 --> 00:24:44,480 what one meant by I was also one meant by a good person and in a metaphor that would give me a good knife. 194 00:24:44,480 --> 00:24:55,160 It was someone who did well, the kind of things which were associated with the attributes of that particular activity 195 00:24:55,160 --> 00:25:03,430 and that sense of goods is the same whether you apply it to a knife person or a business. 196 00:25:03,430 --> 00:25:12,100 Only, of course, MacIntyre and most of the people we've been talking about had extremely negative view of business, 197 00:25:12,100 --> 00:25:17,350 and the business represents itself in the way in which we've been describing earlier in the session. 198 00:25:17,350 --> 00:25:21,730 One can perfectly understand that, but equally, 199 00:25:21,730 --> 00:25:29,350 Paul and I take the view that some of the most important communities which we have in our societies are businesses, 200 00:25:29,350 --> 00:25:39,830 and that people derive the respect and dignity which which they need in their lives from the work they do. 201 00:25:39,830 --> 00:25:44,600 Paul, did you want to comment on on criticisms of communitarianism? Yeah. 202 00:25:44,600 --> 00:26:02,510 I really want to say that there's now a new wave of of communitarian thought, which is really quite an astonishing upsurge and very recent, 203 00:26:02,510 --> 00:26:12,110 and it really is a sort of sea change in the intellectual community away from individualism. 204 00:26:12,110 --> 00:26:17,680 And I don't think I think it doesn't suffer from some of the traditional criticisms. 205 00:26:17,680 --> 00:26:31,910 And so I've already mentioned in philosophy Sandell in politics, Robert Putnam's wonderful new book The Upswing and Which, 206 00:26:31,910 --> 00:26:39,950 which looks at the sort of the coral correlated effects of changes in culture, 207 00:26:39,950 --> 00:26:48,410 changes in political systems and changes in economic outcomes with with economic inequality being a lagging variable. 208 00:26:48,410 --> 00:26:55,100 So it's not the it's not the cause of the problems as a consequence of other problems. 209 00:26:55,100 --> 00:27:03,980 And what else if we if we turn to in economics, we've got rugged regions, wonderful book the third pillar. 210 00:27:03,980 --> 00:27:16,160 You know, Rajan, Chicago professor who's at the business school, the epicentre of Friedman IT economics 50 years ago. 211 00:27:16,160 --> 00:27:22,370 And he's saying, No, no, you know, move on from that. 212 00:27:22,370 --> 00:27:33,830 Rajan, who was also the chief economist of the IMF, also governor of the Bank Reserve Bank of India, is a major major figure. 213 00:27:33,830 --> 00:27:42,120 Rebecca Henderson, the top dog professor at Harvard Business School You know, in reimagining capitalism, 214 00:27:42,120 --> 00:27:47,690 the world on Fire, all these books have come out in the last 12 months, and there are plenty more of them. 215 00:27:47,690 --> 00:27:51,440 So there is this sudden. 216 00:27:51,440 --> 00:28:04,040 So it's it's what Putnam refers to as an inflexion point, a moment when intellectual thinking really is decisively shifting from individualism. 217 00:28:04,040 --> 00:28:06,470 This inflexion was before the pandemic. 218 00:28:06,470 --> 00:28:16,460 And do you think the pandemic will have accelerated that inflexion just forcing us to realise that our welfare depends on the people around them? 219 00:28:16,460 --> 00:28:27,890 That's a that's a that's a strategic question, because Putnam tries to understand why was this inflexion point in the 60s? 220 00:28:27,890 --> 00:28:40,250 What happened? And he's basically arguing it took to get the change to get the momentum reversed, the direction of momentum reversed. 221 00:28:40,250 --> 00:28:44,660 It takes rather a lot. It's not just a shift in intellectual thinking. 222 00:28:44,660 --> 00:28:51,380 It's the coincidence of the shift in intellectual thinking with a major shock 223 00:28:51,380 --> 00:28:58,660 that happens to illustrate the critique launched by the idea by the ideas. 224 00:28:58,660 --> 00:29:04,640 So John and I were students of the of the mid 60s. 225 00:29:04,640 --> 00:29:12,560 You know, we were creatures of this cultural revolution, this vessel we tarred. 226 00:29:12,560 --> 00:29:17,340 And what was the big idea then? It was a critique of authority. 227 00:29:17,340 --> 00:29:26,120 It was it was saying this authority is discredited. And then along came Vietnam. 228 00:29:26,120 --> 00:29:39,080 Hey, hey, LBJ, how many kids did you kill that day, followed by the inflation of the oil shock and mass unemployment as stagflation? 229 00:29:39,080 --> 00:29:47,400 This discredited authority was discredited, so that combination of a shift in ideas perfectly illustrated by a major shock. 230 00:29:47,400 --> 00:29:57,350 We shouldn't underestimate the importance of the financial crisis of 2008, something which revealed not only that there were many greedy, 231 00:29:57,350 --> 00:30:04,640 overpaid people in the financial sector, but they weren't actually even very good at what they did. 232 00:30:04,640 --> 00:30:12,290 And the impacts of that, together with the rather inert or competent in the short run, 233 00:30:12,290 --> 00:30:17,120 but in that in the medium to long run political responses to the fact that 234 00:30:17,120 --> 00:30:23,180 nothing much happened except to try and keep the show sort of on the road is, 235 00:30:23,180 --> 00:30:33,510 I think, a fundamental cause of a kind of erosion of the values both positive and negative, which were around before that. 236 00:30:33,510 --> 00:30:42,360 But the economic knock is that is and it's the lagged effect of that catastrophic shock we list right in the political shock. 237 00:30:42,360 --> 00:30:49,130 The equivalent of Vietnam discrediting authority is the onset of COVID. 238 00:30:49,130 --> 00:30:57,290 I mean, and there is this ludicrous fact it's so ludicrous that it's hard to credit, 239 00:30:57,290 --> 00:31:08,550 but the assessment by Gates and a whole consortium of of NGOs on which countries were best prepared to cope. 240 00:31:08,550 --> 00:31:14,240 The COVID top of the list was the United States and Britain. 241 00:31:14,240 --> 00:31:27,860 Oh yes. And it's just the the here was two states that were completely overconfident in their ability to handle COVID, 242 00:31:27,860 --> 00:31:34,910 just like an overconfident chief executive thought he was the commander in chief of a company. 243 00:31:34,910 --> 00:31:40,160 And so we had commanders in chief who were pulling levers. 244 00:31:40,160 --> 00:31:46,280 And the result was the highest excess deaths in the ABC. 245 00:31:46,280 --> 00:31:54,890 So it's the same shock saying just after the shock sorry, Paul Mastracchio just on inflexion points. 246 00:31:54,890 --> 00:32:00,020 There's also a narrative at the moment that we have seen a different type of inflexion point, 247 00:32:00,020 --> 00:32:07,040 which is a radical move to popularise politics throughout the West. 248 00:32:07,040 --> 00:32:15,650 It cannot happen simultaneously with the movement, at least in the academy. 249 00:32:15,650 --> 00:32:20,530 Along the line. You've just talked about much greater discussion of communitarian. 250 00:32:20,530 --> 00:32:26,580 And is that the dialectic that we're going to see played out over the next decade? 251 00:32:26,580 --> 00:32:37,210 I think so. And it's no surprise that discrediting of authority opens the door to charlatans. 252 00:32:37,210 --> 00:32:48,820 Populist charlatans, of course, when authorities discredited who's going to walk in, it's the celebrities who decide, Oh, I'll be a politician now. 253 00:32:48,820 --> 00:32:56,350 All right. And equally, when authorities discredited, what's the alternative to that? 254 00:32:56,350 --> 00:33:08,680 Is the hard business of serious thinking of I'm trying to understand why was there that so utterly false assessment of preparedness? 255 00:33:08,680 --> 00:33:15,520 Obviously, the intellectual work of the previous 40 years hadn't even prepared. 256 00:33:15,520 --> 00:33:21,790 So the understanding of, for example, what is it to be prepared about against a pandemic? 257 00:33:21,790 --> 00:33:29,650 They were totally wrong, and that's the legacy of 40 years of individualistic academic thinking. 258 00:33:29,650 --> 00:33:33,430 And so there is a huge task of rethinking which is now under way. 259 00:33:33,430 --> 00:33:44,350 There's also a longer term tendency trend which started, I think, when the Berlin Wall collapsed and communism with it. 260 00:33:44,350 --> 00:33:55,090 And that really deprives the left of its traditional organising intellectual framework rounds about various varieties of socialism. 261 00:33:55,090 --> 00:34:01,480 And that's left left the left of the political spectrum left parties somewhat at sea. 262 00:34:01,480 --> 00:34:09,400 Since then, it was papered over for a bit by clever pragmatists like Prince William Blair, 263 00:34:09,400 --> 00:34:14,400 but has not survived in the long run and also less obviously. 264 00:34:14,400 --> 00:34:19,240 And the parties have the right in Europe and the US were largely composed of people, 265 00:34:19,240 --> 00:34:27,100 particularly in Europe and what people composed of people who were in one way threatened by the socialist doctrine, 266 00:34:27,100 --> 00:34:34,480 whether it was business people or nationalists or people who were social conservatives, 267 00:34:34,480 --> 00:34:41,740 wherever people have not very much in common with each other, except that this was a threat to where they stood. 268 00:34:41,740 --> 00:34:52,420 So that both the parties that traditional parties of the left and the right lost the glue that have kept them together for the previous hundred years. 269 00:34:52,420 --> 00:34:58,750 So in your book, you talk a little bit about how you would like to see politics that developed 270 00:34:58,750 --> 00:35:06,070 and makes policy issues around inclusive politics and participatory politics, 271 00:35:06,070 --> 00:35:15,490 and how one can have more engagement without going to extremes of referenda and. 272 00:35:15,490 --> 00:35:30,130 Yeah, I think, yeah, I think Britain is is not just the the most spatially unequal society in the OECD. 273 00:35:30,130 --> 00:35:41,790 It's also the most centralised. Government highly centralised in Whitehall finance, highly centralised in London. 274 00:35:41,790 --> 00:35:59,130 And so one really urgent and important step is the devolution of both the power of government decisions, devolution to the regions and cities. 275 00:35:59,130 --> 00:36:04,710 And that phrase take back control, which won a majority in the country, 276 00:36:04,710 --> 00:36:11,670 was really about take back control from Brussels, with Brussels only control one percent of GDP. 277 00:36:11,670 --> 00:36:19,800 It was really a message take back control from London. Every region of England, Wales other than London voted Brexit. 278 00:36:19,800 --> 00:36:27,090 It was a mutiny against London. So take back control really means devolve power, 279 00:36:27,090 --> 00:36:36,870 a political decision to the regions and exactly the same in finance and the most disturbing financial. 280 00:36:36,870 --> 00:36:46,100 No, I know John knows this more, but that two thirds of all the venture capital for small firms in Britain. 281 00:36:46,100 --> 00:36:50,840 Is allocated to firms in the south, east London and the southeast now. 282 00:36:50,840 --> 00:37:01,310 Venture capital is the stuff which scales up small firm opportunities so that jobs and successful firms of the future on present form, 283 00:37:01,310 --> 00:37:09,140 two thirds of them are going to be in the southeast. That will drastically amplify aggravate our spatial inequalities. 284 00:37:09,140 --> 00:37:14,830 And so what needs devolving is not just government, but finance. 285 00:37:14,830 --> 00:37:22,180 And finance has become more and more centralised, so part of the answer to participatory government is devolution. 286 00:37:22,180 --> 00:37:31,300 If you devolve power decision both financially and politically, you shorten the distance between people and power. 287 00:37:31,300 --> 00:37:36,640 The insiders will hate it because their distance to power gets longer. 288 00:37:36,640 --> 00:37:39,610 But the outsiders the distance get short. 289 00:37:39,610 --> 00:37:48,670 And are you encouraged by metro mass and the increasing power that some of the quite impressive people who are holding these jobs are wielding? 290 00:37:48,670 --> 00:37:52,480 Yes, I think that's the that's the obvious. We should build on what we've got. 291 00:37:52,480 --> 00:38:01,660 Britain's political geography is a complete mess, but rather than spend the next 20 years trying to go from scratch and put it right, 292 00:38:01,660 --> 00:38:12,760 what that's built on, what we what we've got is the metro mayors and the metro regions, which on the whole a coherent economic geographies. 293 00:38:12,760 --> 00:38:19,600 John, as I like to ask you, you talked in this book and improve it in your previous writings, 294 00:38:19,600 --> 00:38:26,440 and you mentioned that earlier about the transformation of business and we've seen over the last few years, 295 00:38:26,440 --> 00:38:32,410 at least as a narrative, much more talk about stakeholder capitalism, about purpose. 296 00:38:32,410 --> 00:38:37,300 Are you encouraged by what's happening? Do you see it? 297 00:38:37,300 --> 00:38:43,030 Is it going to make substantial change at scale, I guess, is a question I'd like to know. 298 00:38:43,030 --> 00:38:48,550 I think we have a lot of work to do to make to make a proper change at scale. 299 00:38:48,550 --> 00:38:56,500 I mean, talk about purposes in advance. But it's very easy to write a statement of purpose. 300 00:38:56,500 --> 00:39:01,480 It is essentially vacuous and its contents and books with a large number of businesses. 301 00:39:01,480 --> 00:39:09,400 I do it. What we need is actually a change in culture in this sense. 302 00:39:09,400 --> 00:39:22,480 I go back to my ex-ceo who observes running a business or being CEO of a large business is, he was saying, a responsibility, not a prise. 303 00:39:22,480 --> 00:39:28,250 You are, as it were, the trustee of an organisation and its thinking in these terms. 304 00:39:28,250 --> 00:39:33,060 Well, the purpose of business is to create shareholder value. 305 00:39:33,060 --> 00:39:38,980 And I don't think there's anyone who goes to work in the jumps out of bed in the morning and says, 306 00:39:38,980 --> 00:39:46,060 I must go and create some more shareholder value today or comes home and said what I did well today. 307 00:39:46,060 --> 00:39:55,750 I bet the shareholders are pleased people derive intrinsic satisfaction from jobs that are worthwhile that they believe are worthwhile. 308 00:39:55,750 --> 00:40:00,100 And it's very difficult to see how anyone could think it was any. 309 00:40:00,100 --> 00:40:05,110 But the most depraved people would think it was worthwhile to sell people about its debts, 310 00:40:05,110 --> 00:40:13,330 obligations they didn't understand, or to promote opioids to people who shouldn't have been consuming them. 311 00:40:13,330 --> 00:40:21,550 So how will that culture change happen when it comes endogenous to me from new generations of people within business? 312 00:40:21,550 --> 00:40:28,780 Or is it the role of government to set the boundary conditions to make it happen with more broadly just all of 313 00:40:28,780 --> 00:40:37,080 us in civil society to set the roles that it's easier for the private sector to to have these multiple goals? 314 00:40:37,080 --> 00:40:46,180 I don't think government can do very much to promote this, but actually the the rhetoric changed. 315 00:40:46,180 --> 00:40:58,750 But the negative change in rhetoric happened over of 20 30 years from the late 70s early eighties, probably up to the financial crisis. 316 00:40:58,750 --> 00:41:09,520 If I look for extreme statements about the importance of shareholder value in the life, I mostly find them in the era before the financial crisis, 317 00:41:09,520 --> 00:41:18,520 business has been a bit more hesitant about representing itself in this way in the last five seven years, 318 00:41:18,520 --> 00:41:23,170 and we're seeing much of that in the discussion about that. 319 00:41:23,170 --> 00:41:28,840 You're well aware of things like the Rebecca Henderson book The Paul was describing, 320 00:41:28,840 --> 00:41:35,950 and so I think it's a culture change which can happen only relatively gradually. 321 00:41:35,950 --> 00:41:42,520 And I think there's a lot of naive discussion about the views and ideas of millennials and the like. 322 00:41:42,520 --> 00:41:52,220 But the firms realise they have to change the ways in which that in order to continue to attract good young people to go and work. 323 00:41:52,220 --> 00:41:54,770 So funny. Sorry, poker. 324 00:41:54,770 --> 00:42:06,690 I was just going to say here, COVID is an amplifier because if we wanted one thing that really illustrates why my rights without my obligations. 325 00:42:06,690 --> 00:42:17,990 Doesn't work. It will be covered if we look at the successful societies New Zealand, which eliminated COVID Denmark, 326 00:42:17,990 --> 00:42:24,650 which never had a first rate ban on a secondly what they were both led by leaders who were modest, 327 00:42:24,650 --> 00:42:34,880 both young women with children of the room and who talked about We, not me. 328 00:42:34,880 --> 00:42:38,090 They didn't say, I'm the chief in charge here. 329 00:42:38,090 --> 00:42:43,130 I know what to do, obey me. And you know, the prime minister. 330 00:42:43,130 --> 00:42:48,830 New Zealand always said, we are a team of five million who is the team of five million. 331 00:42:48,830 --> 00:42:55,700 All the citizens, all the residents of New Zealand all had responsibilities, exactly the same in Denmark. 332 00:42:55,700 --> 00:43:01,310 We are. And what was the message? What is your responsibility? 333 00:43:01,310 --> 00:43:11,870 You've got to protect your neighbour. Don't behave in infinite liberty in a way that exposes other people to risks. 334 00:43:11,870 --> 00:43:15,620 And then both of those societies were really pretty communitarian. 335 00:43:15,620 --> 00:43:28,280 And then I go across the Atlantic and I go back to last March in the United States and United States had been saturated in 40 years of individualism. 336 00:43:28,280 --> 00:43:37,370 Indeed, there are. There are measures we can show on pictures that these Americans sort of epicentre of individualistic thinking. 337 00:43:37,370 --> 00:43:45,710 And what's the image I take from last March, when the American population finally woke up to the thought of COVID? 338 00:43:45,710 --> 00:43:51,260 It was queues long queues outside gun shops? 339 00:43:51,260 --> 00:43:57,170 Yes, not so much. Protect your neighbour as shoot your neighbour. 340 00:43:57,170 --> 00:44:06,220 And we've known we now know that shoot your neighbour isn't very effective against COVID. 341 00:44:06,220 --> 00:44:15,520 And so that contrast between societies which learnt how to build common purpose, common obligations, 342 00:44:15,520 --> 00:44:27,830 mutuality and contain the disease, and those which bragged about their rights and have really lost control of it. 343 00:44:27,830 --> 00:44:35,830 And that is a graphic illustration that plays into the intellectual shift. 344 00:44:35,830 --> 00:44:38,650 It illustrates that intellectual shift. 345 00:44:38,650 --> 00:44:44,560 So if I may, I'm going to turn to some questions that have come in and we have lots of questions and people have voted. 346 00:44:44,560 --> 00:44:49,660 So I'm just going to go for the ones that are most highly voted. This is a question from Andrew Holland. 347 00:44:49,660 --> 00:44:56,420 We tend to think of Reed as something that afflicts the rich, but these things we all want more driven by the systematic creation of 348 00:44:56,420 --> 00:45:01,600 dissatisfaction through marketing and secondly by the hunger for positional goods. 349 00:45:01,600 --> 00:45:04,030 So while on the list by Robert Frank, 350 00:45:04,030 --> 00:45:12,850 this mass form of greed seems unsustainable because it drives ever higher material throughput in the economy for a growing population. 351 00:45:12,850 --> 00:45:17,800 How can we get sustainable limits on mass greed? 352 00:45:17,800 --> 00:45:28,230 John, can I go to you first on that? But I think there's a misunderstanding and that kind of question, 353 00:45:28,230 --> 00:45:39,990 which is that a failure to realise that in what's in the Bronx Western societies, what growth means is typically better, not more. 354 00:45:39,990 --> 00:45:43,350 I mean, a good way of looking at a striking way of looking at it, 355 00:45:43,350 --> 00:45:50,550 which we just happened to be doing in the last couple of weeks is to take product surplus last century or to announce that 356 00:45:50,550 --> 00:46:02,610 weight the ratio of that weight to their quality and what the Pfizer vaccine is off the scale in terms of volume for weight. 357 00:46:02,610 --> 00:46:09,030 So actually is the is the iPhone or, for that matter, the Airbus? 358 00:46:09,030 --> 00:46:21,060 We're not primarily wearing more clothes in the US, we are eating more food than we were 50 years ago, but then again, in Europe, we're not. 359 00:46:21,060 --> 00:46:27,840 And if you were a lot of money, you go to a gym in order to keep yourself slim rather than, 360 00:46:27,840 --> 00:46:33,510 as was true historically, even as much as you can wear where you can. 361 00:46:33,510 --> 00:46:43,310 I think I don't see that there's an incompatibility. Between economic growth and the kind of world that Paul and I want to see. 362 00:46:43,310 --> 00:46:51,380 And then, of course, look kind of countries that pull studies. Not only is there no incompatibility, but there's an essential need. 363 00:46:51,380 --> 00:47:04,190 Yeah. Mm yeah. But let me let me say something in in in support of the question that and I think the 364 00:47:04,190 --> 00:47:14,930 the the drumbeat of advertising has encouraged a sort of focus on and on stuff I mind. 365 00:47:14,930 --> 00:47:21,290 I take the Financial Times and each Saturday we get this thing how to spend it, 366 00:47:21,290 --> 00:47:31,920 which is a sort of grotesque display of of opulence and affluence that nobody in their right mind would look like that will buy that sort of stuff. 367 00:47:31,920 --> 00:47:37,790 And I'm afraid they do. All right. 368 00:47:37,790 --> 00:47:42,920 I wrote a title was an inverted commas, but perhaps I'm wrong, 369 00:47:42,920 --> 00:47:49,850 and I've been reading a lovely book called Triumphs of Experience and it's an unusual book. 370 00:47:49,850 --> 00:48:03,200 It tracks 250 Harvard students who were students in 1940 1941, and it tracks them for 70 years. 371 00:48:03,200 --> 00:48:09,500 And so it's actually one of the very few studies that is able to say what? 372 00:48:09,500 --> 00:48:14,410 What leads to a life where you live till 90? 373 00:48:14,410 --> 00:48:30,980 What you manifestly have a a good life, a satisfying life, and they are over 70 years, the divergence between the people who've committed suicide or, 374 00:48:30,980 --> 00:48:36,650 you know, basically their life has gone into serious dysfunction of depression and so on. 375 00:48:36,650 --> 00:48:42,170 This is the people who have really got a got a good life is massive. 376 00:48:42,170 --> 00:48:50,660 And what are the what are the factors that explain it? It's not a big material success. 377 00:48:50,660 --> 00:48:56,570 What it is is relationships is overwhelmingly meaningful relationships. 378 00:48:56,570 --> 00:49:13,700 And so I think we have got a bit of a skew through advertising and so on towards this sort of stuff based pursuit or status based pursuit. 379 00:49:13,700 --> 00:49:21,380 Whereas getting back to relationships, relationships are maybe not as marketable, but they're more meaningful. 380 00:49:21,380 --> 00:49:26,510 And I think that is actually something that is starting to become understood. 381 00:49:26,510 --> 00:49:33,410 But also, there's an important issue that I think, which is that most people in prestigious, 382 00:49:33,410 --> 00:49:38,870 well-paying jobs like ourselves, like the jobs they're doing. 383 00:49:38,870 --> 00:49:49,580 Yeah, and will go on doing them for as long as they can. There's a striking contrast between the fact that these kind of jobs in the financial sector. 384 00:49:49,580 --> 00:49:53,600 Where people are motivated essentially by money. 385 00:49:53,600 --> 00:50:02,720 And one talks and many people who are very rich come very rich in the financial sector and hate the job they're doing. 386 00:50:02,720 --> 00:50:10,160 Certainly, they also get on a kind of golden treadmill in which they realise they can't afford to get off it. 387 00:50:10,160 --> 00:50:16,640 In terms of decreasing aspirations, they are quite bright. 388 00:50:16,640 --> 00:50:21,750 Forgive me, Mr. Jones, but I want to try and get on to another question. This is a question from Theo. 389 00:50:21,750 --> 00:50:25,760 I'm an undergraduate finalist in history and economics here in Oxford. 390 00:50:25,760 --> 00:50:32,750 Frustrated with the economic curriculum, if so many current thinkers agree that the economics needs to be reformed. 391 00:50:32,750 --> 00:50:38,420 Why has the undergraduate curriculum curriculum not changed? Paul, there are moves afoot to change. 392 00:50:38,420 --> 00:50:43,070 Without that, there are. Indeed, there are. Indeed. 393 00:50:43,070 --> 00:50:51,050 And I mean, it's very much related to the the bafflement that John spoke about at the beginning. 394 00:50:51,050 --> 00:50:56,180 It's it's rebasing economics on a better understanding. 395 00:50:56,180 --> 00:51:01,460 I think of two things. One is of human nature. We're not saints. 396 00:51:01,460 --> 00:51:11,090 We are inclined to be greedy and selfish and lazy, but it's a complete travesty of human nature to say, that's all we are. 397 00:51:11,090 --> 00:51:16,820 We are capable of being dragged down to that level and the worst sort of firm does that. 398 00:51:16,820 --> 00:51:23,300 Dragging it provides an institutional setting which reinforces those tendencies, 399 00:51:23,300 --> 00:51:30,200 but a good institutional environment encourages a better, the better angels of our nature. 400 00:51:30,200 --> 00:51:35,870 And we're a very unusual mammal because we are hardwired to be more pro-social than any other mammal. 401 00:51:35,870 --> 00:51:44,450 So we've got better angels as well as worse. And so and so that's that's part of it, really. 402 00:51:44,450 --> 00:51:49,820 I think one thing that has happened to me in the last few years is that I feel I've learnt more 403 00:51:49,820 --> 00:51:56,150 about economics by reading things that weren't economics than things that were what actually, 404 00:51:56,150 --> 00:52:05,810 Paul and I were on the call earlier in the day and discussing issues with Joe Henrik, who's the anthropologist. 405 00:52:05,810 --> 00:52:13,260 Even you interested me notion of apology at Harvard and his book Secret of Our Success. 406 00:52:13,260 --> 00:52:19,400 The more recent book called which are books that have both had a profound influence 407 00:52:19,400 --> 00:52:23,990 on me in the way in which I think about economics and my recommendations 408 00:52:23,990 --> 00:52:32,990 for fear it would be go away and read the secret of our success and ask your tutors why they aren't talking to you about some of these ideas. 409 00:52:32,990 --> 00:52:42,650 So I think that's let me add to that John's recent contribution of the exploration of radical uncertainty because economics is still 410 00:52:42,650 --> 00:52:56,690 largely fixated on a known world and wake up to a world in which we do not know what it will maximising strategy would look like. 411 00:52:56,690 --> 00:53:02,510 And so we don't even try and maximise. And that's the world of radical uncertainty. 412 00:53:02,510 --> 00:53:12,380 So the combination of rethinking human nature, a better understanding of that and which is the collective mind which is high risk and also Christakis. 413 00:53:12,380 --> 00:53:21,740 And that plus facing up to radical uncertainty, there are the two big intellectual revolutions, which are economics needs to digest. 414 00:53:21,740 --> 00:53:28,340 There were two interesting postscript to that question one from Samantha Knight saying the history curriculum similarly 415 00:53:28,340 --> 00:53:35,930 needs revision and one from Daniel Scharf who points out that given the preponderance of Oxford graduates in high places, 416 00:53:35,930 --> 00:53:43,370 perhaps we are responsible for some of the main government. But let me go on to the next question, which is, well, is from Samantha nights. 417 00:53:43,370 --> 00:53:48,050 I think this is one for John. How do we best deal with the greed of multinationals? 418 00:53:48,050 --> 00:53:56,000 The greed is an inverted commas of multinationals, which makes it so difficult for smaller domestic or regional firms and initiatives to compete. 419 00:53:56,000 --> 00:54:00,770 What sort of international regulatory framework do we need? 420 00:54:00,770 --> 00:54:11,570 Well, I think if we think the answer is international regulatory framework, we will be spending a lot of time for not very much. 421 00:54:11,570 --> 00:54:21,080 I think there are two points, though. One is that we have greatly weakened the application of antitrust policies in the last 20 30 years, 422 00:54:21,080 --> 00:54:27,050 and the idea that the purpose of antitrust is to encourage pluralism. 423 00:54:27,050 --> 00:54:33,560 Because most new ideas don't come from well-established companies they come from, 424 00:54:33,560 --> 00:54:39,440 they come from smaller, innovative companies is important to understand. 425 00:54:39,440 --> 00:54:49,670 But there's a corollary of that, which is people always exaggerate the power which established multinational companies enjoy. 426 00:54:49,670 --> 00:54:54,760 A year or two ago, I got fired BBC journalists doing a programme, 427 00:54:54,760 --> 00:55:01,900 and she talked to me about the dominance of companies like Google and Facebook and so on and said, 428 00:55:01,900 --> 00:55:11,410 Are there any examples in the history of large established companies like these that have actually lost their market position? 429 00:55:11,410 --> 00:55:16,120 And I said to her, look, it would be a lot easier to find things. 430 00:55:16,120 --> 00:55:29,620 The difficulty is finding examples of companies that haven't or whether it's General Motors or IBM or U.S. Steel, which was formed in 1999, 431 00:55:29,620 --> 00:55:38,950 was by far the most valuable company in the world, and it's worth about the same amount today as it was worth than mine to go to. 432 00:55:38,950 --> 00:55:46,420 And there's no overlap between the top 100 companies today in the top 100 companies 100 years ago. 433 00:55:46,420 --> 00:55:54,100 Very little. And Exxon Mobil has for a long time been the survivor. 434 00:55:54,100 --> 00:55:57,760 You might ask how bright its future is now. 435 00:55:57,760 --> 00:56:11,020 And General Electric US General Electric was the other long term survivors survivor and its who is a company in rapid decline. 436 00:56:11,020 --> 00:56:17,140 We're just watching Boeing, which dominated the civil aviation market for 50 years. 437 00:56:17,140 --> 00:56:24,700 A company that is seriously struggling and shell reported why and why is why is and why? 438 00:56:24,700 --> 00:56:29,680 Yes, that goes back to my fall of the icon story. 439 00:56:29,680 --> 00:56:35,890 Yeah, I fear that this is going to have to be the last question, and I think it's for pole. 440 00:56:35,890 --> 00:56:40,060 It's slightly different from what we've talked about it, but something you've written a lot on. 441 00:56:40,060 --> 00:56:46,450 Shouldn't we now forgive all debts? And I think this is what the questioner is. 442 00:56:46,450 --> 00:56:49,510 Ghost answering the machine may not forgive all debts, 443 00:56:49,510 --> 00:56:57,390 which I assume as national debt in order to make climate change and planetary problems insoluble by capitalism. 444 00:56:57,390 --> 00:57:01,620 That law requires that forgiveness for national debt. 445 00:57:01,620 --> 00:57:05,940 We need we need to do a lot more for poor countries. 446 00:57:05,940 --> 00:57:16,350 Undoubtedly, COVID has been a catastrophe for poor countries, not because of the health shock on the whole. 447 00:57:16,350 --> 00:57:30,270 Poor countries have handled the health shock better than rich countries, but the sink synchronised macroeconomic collapse in China, 448 00:57:30,270 --> 00:57:41,940 India, Europe and North America has produced for massive macro hits to the poorest countries in the world. 449 00:57:41,940 --> 00:57:45,270 I won't go through them, but lower commodity prices for stock. 450 00:57:45,270 --> 00:57:51,840 All those hits are transfers from the poorest countries to the richest, inadvertent transfers. 451 00:57:51,840 --> 00:57:55,620 We need to have big money that compensates for that. 452 00:57:55,620 --> 00:57:58,980 I don't particularly want to do it through cancelling debts. 453 00:57:58,980 --> 00:58:11,850 I want to do it through proper new flows of money because that can be first of all, cancelling debts cuts off a lifeline. 454 00:58:11,850 --> 00:58:20,430 I'm dealing with some very fast growing African countries that have been interrupted by COVID. 455 00:58:20,430 --> 00:58:28,860 But the last thing on Earth they want to do is to close off access for the next 20 years to capital markets by having debts cancelled. 456 00:58:28,860 --> 00:58:33,180 They want to build reputation in capital markets and buy gold. 457 00:58:33,180 --> 00:58:36,780 Some of them have done it, and not all. Not all African countries. 458 00:58:36,780 --> 00:58:43,890 Some have behaved very responsibly, but some built responsible behaviour and good reputations that there's not 459 00:58:43,890 --> 00:58:51,060 enough public money to lift the poorest countries out of the mire of poverty. 460 00:58:51,060 --> 00:58:57,600 We need a lot of flow inflows from firms and inflows from capital markets. 461 00:58:57,600 --> 00:59:03,030 The tragedy is that we've not been able to tap into capital markets anything like enough. 462 00:59:03,030 --> 00:59:08,020 So we need public mechanisms which tap into capital markets. 463 00:59:08,020 --> 00:59:11,940 And so the spirit of the question is absolutely right. 464 00:59:11,940 --> 00:59:17,700 We need a big help, financial help. But the actual mechanics of the question? 465 00:59:17,700 --> 00:59:24,580 Debt relief is not the right modality. I think, John, anything you'd like to add. 466 00:59:24,580 --> 00:59:31,890 No, I think that's the one thing I would add would be that actually, 467 00:59:31,890 --> 00:59:38,700 it's getting Western economic institutions to operate effectively in these countries, 468 00:59:38,700 --> 00:59:45,150 which is different from the spirits of a lot of the questions that have been. 469 00:59:45,150 --> 00:59:51,620 That's what will make the difference to cool people, and then, of course, society's. 470 00:59:51,620 --> 00:59:57,140 Thank you very much. I'm afraid we're going to have to stop there because we're coming up to the ah, just before thanking you, 471 00:59:57,140 --> 01:00:05,550 I'd like to thank the audience for some great questions, and I'm sorry that I've only been able to do the top at the top few. 472 01:00:05,550 --> 01:00:12,710 On next talk is this time next week, when Christie will be in conversation with Dame Sally Davies, 473 01:00:12,710 --> 01:00:19,370 talking about some of the issues about antimicrobial resistance going ahead. 474 01:00:19,370 --> 01:00:23,960 I'd like to hugely thank John and Paul for a really fascinating discussion. 475 01:00:23,960 --> 01:00:29,330 Paul, you answered Theo's question by giving him a reading list, 476 01:00:29,330 --> 01:00:35,570 and you were far too modest to say that what he really does need to do is to go away and reread his bed. 477 01:00:35,570 --> 01:00:40,310 And when he's finished that to go on to the future of capitalism and radical uncertainty, 478 01:00:40,310 --> 01:00:50,300 it's wonderful economic thinkers such as you are writing for a general audience as well, and that will really make a difference. 479 01:00:50,300 --> 01:00:55,053 So thank you very much indeed for the fascinating conversations. Thank you, Charles.