Good afternoon, everyone, and welcome to the latest in a series of conversations that the Oxford Martin School has been
arranging around the broad topic of what having gone through a pandemic means going ahead,
thinking about the major challenges of the 21st century before introducing our two guests this afternoon.
Can I welcome all our external audience and can I encourage you to ask questions?
If you look at the bottom right of your screen,
you should see a little button that says Ask a question and you have the opportunity to type in a questionnaire,
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
which are those that most people people are most interested to get to get answers for.
And just to remind you that we are recording this session.
So if you ask a question, your name may go alive.
So let me go straight to introducing our two guests with hugely lucky to have this afternoon two of Britain's most distinguished economists.
First, we have support Collier, who's professor of economics and public policy here in Oxford, the Blavatnik School.
And Paul is also a professorial fellow at St Tanzania's Paul, founded at Oxford,
the Centre for the Study of African Economies, and hasn't and has had many roles outside Oxford,
including a five year secondment to the World Bank and many advisory roles within UK governments and foreign governments as well.
Paul writes, were both a technical and a general audience, and amongst his books were more general audience,
which many of you I know will recognise as the bottom billion the plundered planet.
The future of capitalism and most recently, greed is bad,
which is the book that we're going to talk about this afternoon and which you wrote with our second guest, John John Key.
Again, one of the UK's major economic thinkers, John has been an academic at Oxford and the LSC journalist in the Financial Times,
research director at the Institute of Fiscal Studies, as well as many roles in the private sector with government.
John published in 2012, a major report which has become known as the K Review in UK equity markets and long term decision making.
John also writes wonderful books for a general audience, and these include other people's money, the real other people's money,
with the subtitle The Real Business of Finance recently with Melvyn King,
Radical Uncertainty and the book that we're going to be exploring some of the issues around this afternoon.
Greed is dead, and of course, greatness that reminds us deliberately of the film all straight and the failure of Gordon Gekko.
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.
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.
John, could I get you to explore some of these issues and your concerns around the what
you call the economic individualism that this economic philosophy has engendered?
It's interesting, Charles, that you read into it in that way because a friend of mine was working for an
investment bank at the time to a group of clients to a showing of that film.
And he told me that the majority of the clients who went there genuinely did not
understand that this was not intended to be a sympathetic portrayal of Wall Street.
They thought this was what it was like and good on them.
And that was what happened the decade of the of the eighties.
And that was, in a sense, my experience too.
Because as you mentioned, I taught economics in Oxford for many years, and when I taught students beginning giving students economics, I taught.
So the models based on maximising rational individuals.
And when I became engaged with the business world, I realised that it wasn't really like that.
It wasn't like it for two reasons. One was that people actually have multiple motivations.
And while they have material ones, there are only parts of they are.
And secondly, they couldn't optimise.
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.
And that has influenced me ever since. But what I also realised was that the models,
which I had been teaching had actually come to have a huge influence on what was actually happening in the world,
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.
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.
And the result of that was the the kind of sale of worthless products that led up to the 2008 financial crisis.
The result of that was the explosive growth of executive remuneration.
And most of all, the results of that was actually the decline of what I call the iconic companies.
The British industry that Eisai was Britain's leading industrial company for most of the 20th century.
It disappeared in the first decade of the 21st,
and the second largest industrial company in the nineteen nineties was juicing, to which much the same happened.
And Marks and Spencer in the nineteen nineties turned its focus to increasing profits,
making profits of a billion pounds a year, which it did once in 1998.
And then its sales fell off a cliff. People no longer regarded Marks and Spencer with all they once have done,
and they have never made that level of profit again was actually a selfishness that destroyed motivation and actually destroyed many great companies.
To what degree was the structure of business determined by the underlying prevailing economic orthodoxy?
Or was it the other way round that the orthodoxy was developed to?
No, in order to support the people who were making a lot of money from the prevailing business structures?
I said I think they were mutually reinforcing. People in business weren't being influenced by the the matter of mathematics,
which I taught students in elementary courses that they were being influenced by the fact that this orthodoxy worked rather well for them,
and we saw the amazing amounts of money that were made by employees in the financial sector.
And we saw the ways in which, as I described, executive remuneration exploded.
I remember once taking a retired chief executives of were major British company to my class at London Business School,
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,
and that that sentence encapsulated for me the change in the world, in the business world, which it occurred.
If I can go off on a slight trajectory because you've been talking about teaching economic
models and the assumptions that that's that makes about the nobility of the future.
And you've written recently, but my thinking, as I mentioned in the introduction,
your concern about how much economic theory is based on assumptions about,
you know, ability, how badly it's not affecting economic policymaking at the moment, quite badly.
I was very much part of what real? What's the lead up to the financial crisis,
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.
In the book, we talk about the famous statement by David Benioff, who was CFO of Goldman Sachs at the time,
who said as the financial crisis broke, we've been experiencing twenty five standard deviation events several days in a row.
Now, you don't have to know very much about statistics to know that it's impossible to experience twenty five standard deviation events.
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.
And similarly, even though macroeconomic policy is influenced by frameworks concerned with rational expectations and general equilibrium,
which bear very little relation to the way in which macro economies actually function,
and so much of which is based on maximising personal utility, which is the sort of two planks of your concern about individualism.
And the other part, perhaps if I could turn to Paul, is your concern about political individualism,
and there were very few people will get up and defend Gordon Gekko.
Then you mount broadside against a political philosopher, John Rawls, who many people,
especially on the on the left, sort of consider almost a secular saint.
Might you tell us a little bit about your concerns about this strand of political individualism, especially on the left of centre?
Yes, our fears of philosophical st.
Is Michael Sandel, who's got this wonderful new book, The Tyranny of Merit.
And whereas Rules was concerned with what he called Distributive Justice Sandel,
it has a much more solicitous faces contribute to justice, and that's built to what that means.
We are as keen on rights as anybody else, right?
We don't want a society without rights, but rights with our obligations are completely empty.
Rights depend on someone somewhere. Having obligations to fulfil those rights.
So the the the easy bit is claiming the rights.
The hard bit in generating rights is generating the obligations, where do they land?
And the difference between rules and Sandell is where those obligations land because what
we've actually lived through over the last 40 years is people increasingly claiming rights,
whereas whilst they walk away from obligations.
Robert Putnam has marvellous new book called The Upswing, where he plots amongst many, many other things.
But one ingenious and sort of graphic little thing is how many times you observe the word me compared to the word we.
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.
Looks very much like 2020, and it's the the ascendancy of me.
The meat we frequency is at its peak, both in 1980 and 2020.
And since about the mid 60s, we've seen a steady decline.
The peak of we society was in the 60s and we've seen a steady decline, a retreat from we towards me.
And the counterpart of that is me just wants to the obligations of someone else.
And so where the obligations lend now with the state?
And that doesn't work, the state gets completely overburdened with obligations, and all of the individuals in it say, not me.
I don't want to pay tax. I don't want to do this. I want my individual freedom.
And you know, we've we've seen very recently that individual freedoms sometimes comes at the expense of the common good.
So the the the secret of building rights robustly is mutuality.
And this is what contributed to justice means everybody needs to be contribute contributing.
They need to be morally load bearing and so that we all contribute to the whole world.
Why do we need that? Partly because otherwise these obligations can't be met satisfactorily, but mainly because it gives us all agency.
If we are all agents in the common good, then we will own that common good and we have dignity.
The distributive justice notion was what encouraged New Labour to put the north of England on Benefit Street.
People are just consumers. They echoed actually economic man in economic man, the only thing that gets us higher utility is our consumption.
Well, obviously with real people.
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,
it's the respect that they get from others and they get self-respect from being valued in a community.
And that building of a rich, dense web of mutuality is what makes a great society.
If we look at the societies which routinely top all the measures, both of income equality,
well-being, it is places like Denmark and Norway, and they just webs of mutuality.
They're so good at building common purposes and then sharing out the obligations to meet them.
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.
And clearly, political philosophers can can provide a rationale for these these movements, but they don't drive them.
And I was wondering the degree to which you think that this rise of individual individualism within,
say, our country, the UK has been driven, first of all by what do you say,
David Goodhart phrase that the society is now split into people who have a sense
of place somewhere as opposed to the no way the anybody has the pardon and
also the issues around meritocracy that we and we have a meritocracy and many
people automatically think that by definition of meritocracy must be good,
forgetting that it disadvantages a very large fraction of society.
Well, it depends what we mean by I mean, it's obviously good the competent people should be should be doing holding responsible positions.
So the critique of meritocracy is not saying let's have random incompetence.
Obviously not. And I think are two I don't particularly like the the every, somewhere, somewhere, everywhere or whatever.
I prefer the concept and which are actually economic concepts.
Insiders and outsiders and insiders are the people who are basically close to power.
And Britain is so centralised, those political power in London and financial power in London that the people,
the Londoners and the young and Oxford the sort of almost London by the sea as it were,
that we're we're naturally closely connected and we don't even realise that most people are not like that.
Most people are outsiders. So the concept was coined in directions to the labour market.
The people who was secure in, you know, in their jobs, exemplified by academics and the people who and who are in precarious jobs.
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,
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.
The insiders didn't even realise what was happening with the outsiders, how life was like for them.
And the other concept is this meritocracy. What?
Why is Sandel critiquing meritocracy?
Because the insiders who are so successful come to believe that the reason they're so successful is that individually brilliant.
That's the individual, isn't it? And so they think I'm really successful because I deserve it.
That's the move that makes meritocracy stink, because what's then the narrative by extension with the people who don't make it?
You not made it because you're no good, you deserve to lose.
And that leaves these people bereft of dignity because the narratives of the insiders actually become the dominant narratives in the country.
Even some of the outsiders pick them up and start to see themselves in that light and insult to injury.
Michael Young coined the phrase Meritocracy, wrote the book The Rise of the Meritocracy,
and many people don't realise now that what he was describing was a dystopia.
Yes. And 30 years after he wrote the book,
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.
I think when he said, What is it like in a meritocracy to be told you are without merit?
No underclass, he said, has ever been left as morally naked as that.
And we need to understand that the things that concern people today, people talk almost endlessly about inequality.
This is not about inequality in the sense of inequality of incomes that may be part of it,
but it's not the essence of it is a sense of being respected,
which has gone from a kind of communities that in which working class people voted for Trump, in which they voted Conservative,
not just in 2019, have been voting conservative increase in increasing proportions for the last two years.
And we see similar kinds of developments in Germany with the rise of FDR.
And in France with the activities of zero zero.
And, of course, the the the the the man who coined meritocracy was the same man who had written the Labour manifesto of 1945.
He wasn't a highly conservative, he was a passionate Labour supporter.
But he was seeing the danger of basically of the insiders, both on the left and the right, walking away from ordinary people.
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.
And of course, that's what we've seen in political parties with the left across the western world.
Whether it's the Labour Party in the U.K., the Democrats in the US,
the SPD in Germany, or when the French left is essentially collapsed in this sense.
It's a division between the merits of Croats who have made it and are obsessed with issues of identity.
Politics were entirely divorced from the traditional concerns of the left before the needs and aspirations of working class people.
And I think the message about a greater equality of esteem it is important for everyone is
perhaps particularly important for us in such privileged positions as we are in Oxford.
I'm one of the fascinating things in your book is you talk a little bit about the history of of communitarianism,
taking it all the way back to Adam Smith and pointing out as other people have done,
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.
And of course, militarism over the years has had a pushback from other liberals,
with accusations that it can lead to the society determining moral norms and forcing confirm conformity and.
Inhibiting Liberty, and it points to some of its origin, then, for example, Catholic communitarian.
How do you respond to the classical liberal attacks on on communitarianism?
It's an interesting question, and of course, the revival of humanitarianism actually came in large part from Oxford,
with Elizabeth Armstrong and Charles Taylor followed.
Then by then it's quite important to say he's a Catholic, obviously became a Catholic.
I was a MacIntyre. I mean, Paul said, Michael Sundial was this philosophical hero.
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.
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
what one meant by I was also one meant by a good person and in a metaphor that would give me a good knife.
It was someone who did well, the kind of things which were associated with the attributes of that particular activity
and that sense of goods is the same whether you apply it to a knife person or a business.
Only, of course, MacIntyre and most of the people we've been talking about had extremely negative view of business,
and the business represents itself in the way in which we've been describing earlier in the session.
One can perfectly understand that, but equally,
Paul and I take the view that some of the most important communities which we have in our societies are businesses,
and that people derive the respect and dignity which which they need in their lives from the work they do.
Paul, did you want to comment on on criticisms of communitarianism? Yeah.
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,
and it really is a sort of sea change in the intellectual community away from individualism.
And I don't think I think it doesn't suffer from some of the traditional criticisms.
And so I've already mentioned in philosophy Sandell in politics, Robert Putnam's wonderful new book The Upswing and Which,
which looks at the sort of the coral correlated effects of changes in culture,
changes in political systems and changes in economic outcomes with with economic inequality being a lagging variable.
So it's not the it's not the cause of the problems as a consequence of other problems.
And what else if we if we turn to in economics, we've got rugged regions, wonderful book the third pillar.
You know, Rajan, Chicago professor who's at the business school, the epicentre of Friedman IT economics 50 years ago.
And he's saying, No, no, you know, move on from that.
Rajan, who was also the chief economist of the IMF, also governor of the Bank Reserve Bank of India, is a major major figure.
Rebecca Henderson, the top dog professor at Harvard Business School You know, in reimagining capitalism,
the world on Fire, all these books have come out in the last 12 months, and there are plenty more of them.
So there is this sudden.
So it's it's what Putnam refers to as an inflexion point, a moment when intellectual thinking really is decisively shifting from individualism.
This inflexion was before the pandemic.
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?
That's a that's a that's a strategic question, because Putnam tries to understand why was this inflexion point in the 60s?
What happened? And he's basically arguing it took to get the change to get the momentum reversed, the direction of momentum reversed.
It takes rather a lot. It's not just a shift in intellectual thinking.
It's the coincidence of the shift in intellectual thinking with a major shock
that happens to illustrate the critique launched by the idea by the ideas.
So John and I were students of the of the mid 60s.
You know, we were creatures of this cultural revolution, this vessel we tarred.
And what was the big idea then? It was a critique of authority.
It was it was saying this authority is discredited. And then along came Vietnam.
Hey, hey, LBJ, how many kids did you kill that day, followed by the inflation of the oil shock and mass unemployment as stagflation?
This discredited authority was discredited, so that combination of a shift in ideas perfectly illustrated by a major shock.
We shouldn't underestimate the importance of the financial crisis of 2008, something which revealed not only that there were many greedy,
overpaid people in the financial sector, but they weren't actually even very good at what they did.
And the impacts of that, together with the rather inert or competent in the short run,
but in that in the medium to long run political responses to the fact that
nothing much happened except to try and keep the show sort of on the road is,
I think, a fundamental cause of a kind of erosion of the values both positive and negative, which were around before that.
But the economic knock is that is and it's the lagged effect of that catastrophic shock we list right in the political shock.
The equivalent of Vietnam discrediting authority is the onset of COVID.
I mean, and there is this ludicrous fact it's so ludicrous that it's hard to credit,
but the assessment by Gates and a whole consortium of of NGOs on which countries were best prepared to cope.
The COVID top of the list was the United States and Britain.
Oh yes. And it's just the the here was two states that were completely overconfident in their ability to handle COVID,
just like an overconfident chief executive thought he was the commander in chief of a company.
And so we had commanders in chief who were pulling levers.
And the result was the highest excess deaths in the ABC.
So it's the same shock saying just after the shock sorry, Paul Mastracchio just on inflexion points.
There's also a narrative at the moment that we have seen a different type of inflexion point,
which is a radical move to popularise politics throughout the West.
It cannot happen simultaneously with the movement, at least in the academy.
Along the line. You've just talked about much greater discussion of communitarian.
And is that the dialectic that we're going to see played out over the next decade?
I think so. And it's no surprise that discrediting of authority opens the door to charlatans.
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.
All right. And equally, when authorities discredited, what's the alternative to that?
Is the hard business of serious thinking of I'm trying to understand why was there that so utterly false assessment of preparedness?
Obviously, the intellectual work of the previous 40 years hadn't even prepared.
So the understanding of, for example, what is it to be prepared about against a pandemic?
They were totally wrong, and that's the legacy of 40 years of individualistic academic thinking.
And so there is a huge task of rethinking which is now under way.
There's also a longer term tendency trend which started, I think, when the Berlin Wall collapsed and communism with it.
And that really deprives the left of its traditional organising intellectual framework rounds about various varieties of socialism.
And that's left left the left of the political spectrum left parties somewhat at sea.
Since then, it was papered over for a bit by clever pragmatists like Prince William Blair,
but has not survived in the long run and also less obviously.
And the parties have the right in Europe and the US were largely composed of people,
particularly in Europe and what people composed of people who were in one way threatened by the socialist doctrine,
whether it was business people or nationalists or people who were social conservatives,
wherever people have not very much in common with each other, except that this was a threat to where they stood.
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.
So in your book, you talk a little bit about how you would like to see politics that developed
and makes policy issues around inclusive politics and participatory politics,
and how one can have more engagement without going to extremes of referenda and.
Yeah, I think, yeah, I think Britain is is not just the the most spatially unequal society in the OECD.
It's also the most centralised. Government highly centralised in Whitehall finance, highly centralised in London.
And so one really urgent and important step is the devolution of both the power of government decisions, devolution to the regions and cities.
And that phrase take back control, which won a majority in the country,
was really about take back control from Brussels, with Brussels only control one percent of GDP.
It was really a message take back control from London. Every region of England, Wales other than London voted Brexit.
It was a mutiny against London. So take back control really means devolve power,
a political decision to the regions and exactly the same in finance and the most disturbing financial.
No, I know John knows this more, but that two thirds of all the venture capital for small firms in Britain.
Is allocated to firms in the south, east London and the southeast now.
Venture capital is the stuff which scales up small firm opportunities so that jobs and successful firms of the future on present form,
two thirds of them are going to be in the southeast. That will drastically amplify aggravate our spatial inequalities.
And so what needs devolving is not just government, but finance.
And finance has become more and more centralised, so part of the answer to participatory government is devolution.
If you devolve power decision both financially and politically, you shorten the distance between people and power.
The insiders will hate it because their distance to power gets longer.
But the outsiders the distance get short.
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?
Yes, I think that's the that's the obvious. We should build on what we've got.
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,
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.
John, as I like to ask you, you talked in this book and improve it in your previous writings,
and you mentioned that earlier about the transformation of business and we've seen over the last few years,
at least as a narrative, much more talk about stakeholder capitalism, about purpose.
Are you encouraged by what's happening? Do you see it?
Is it going to make substantial change at scale, I guess, is a question I'd like to know.
I think we have a lot of work to do to make to make a proper change at scale.
I mean, talk about purposes in advance. But it's very easy to write a statement of purpose.
It is essentially vacuous and its contents and books with a large number of businesses.
I do it. What we need is actually a change in culture in this sense.
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.
You are, as it were, the trustee of an organisation and its thinking in these terms.
Well, the purpose of business is to create shareholder value.
And I don't think there's anyone who goes to work in the jumps out of bed in the morning and says,
I must go and create some more shareholder value today or comes home and said what I did well today.
I bet the shareholders are pleased people derive intrinsic satisfaction from jobs that are worthwhile that they believe are worthwhile.
And it's very difficult to see how anyone could think it was any.
But the most depraved people would think it was worthwhile to sell people about its debts,
obligations they didn't understand, or to promote opioids to people who shouldn't have been consuming them.
So how will that culture change happen when it comes endogenous to me from new generations of people within business?
Or is it the role of government to set the boundary conditions to make it happen with more broadly just all of
us in civil society to set the roles that it's easier for the private sector to to have these multiple goals?
I don't think government can do very much to promote this, but actually the the rhetoric changed.
But the negative change in rhetoric happened over of 20 30 years from the late 70s early eighties, probably up to the financial crisis.
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,
business has been a bit more hesitant about representing itself in this way in the last five seven years,
and we're seeing much of that in the discussion about that.
You're well aware of things like the Rebecca Henderson book The Paul was describing,
and so I think it's a culture change which can happen only relatively gradually.
And I think there's a lot of naive discussion about the views and ideas of millennials and the like.
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.
So funny. Sorry, poker.
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.
Doesn't work. It will be covered if we look at the successful societies New Zealand, which eliminated COVID Denmark,
which never had a first rate ban on a secondly what they were both led by leaders who were modest,
both young women with children of the room and who talked about We, not me.
They didn't say, I'm the chief in charge here.
I know what to do, obey me. And you know, the prime minister.
New Zealand always said, we are a team of five million who is the team of five million.
All the citizens, all the residents of New Zealand all had responsibilities, exactly the same in Denmark.
We are. And what was the message? What is your responsibility?
You've got to protect your neighbour. Don't behave in infinite liberty in a way that exposes other people to risks.
And then both of those societies were really pretty communitarian.
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.
Indeed, there are. There are measures we can show on pictures that these Americans sort of epicentre of individualistic thinking.
And what's the image I take from last March, when the American population finally woke up to the thought of COVID?
It was queues long queues outside gun shops?
Yes, not so much. Protect your neighbour as shoot your neighbour.
And we've known we now know that shoot your neighbour isn't very effective against COVID.
And so that contrast between societies which learnt how to build common purpose, common obligations,
mutuality and contain the disease, and those which bragged about their rights and have really lost control of it.
And that is a graphic illustration that plays into the intellectual shift.
It illustrates that intellectual shift.
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.
So I'm just going to go for the ones that are most highly voted. This is a question from Andrew Holland.
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
dissatisfaction through marketing and secondly by the hunger for positional goods.
So while on the list by Robert Frank,
this mass form of greed seems unsustainable because it drives ever higher material throughput in the economy for a growing population.
How can we get sustainable limits on mass greed?
John, can I go to you first on that? But I think there's a misunderstanding and that kind of question,
which is that a failure to realise that in what's in the Bronx Western societies, what growth means is typically better, not more.
I mean, a good way of looking at a striking way of looking at it,
which we just happened to be doing in the last couple of weeks is to take product surplus last century or to announce that
weight the ratio of that weight to their quality and what the Pfizer vaccine is off the scale in terms of volume for weight.
So actually is the is the iPhone or, for that matter, the Airbus?
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.
And if you were a lot of money, you go to a gym in order to keep yourself slim rather than,
as was true historically, even as much as you can wear where you can.
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.
And then, of course, look kind of countries that pull studies. Not only is there no incompatibility, but there's an essential need.
Yeah. Mm yeah. But let me let me say something in in in support of the question that and I think the
the the drumbeat of advertising has encouraged a sort of focus on and on stuff I mind.
I take the Financial Times and each Saturday we get this thing how to spend it,
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.
And I'm afraid they do. All right.
I wrote a title was an inverted commas, but perhaps I'm wrong,
and I've been reading a lovely book called Triumphs of Experience and it's an unusual book.
It tracks 250 Harvard students who were students in 1940 1941, and it tracks them for 70 years.
And so it's actually one of the very few studies that is able to say what?
What leads to a life where you live till 90?
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,
you know, basically their life has gone into serious dysfunction of depression and so on.
This is the people who have really got a got a good life is massive.
And what are the what are the factors that explain it? It's not a big material success.
What it is is relationships is overwhelmingly meaningful relationships.
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.
Whereas getting back to relationships, relationships are maybe not as marketable, but they're more meaningful.
And I think that is actually something that is starting to become understood.
But also, there's an important issue that I think, which is that most people in prestigious,
well-paying jobs like ourselves, like the jobs they're doing.
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.
Where people are motivated essentially by money.
And one talks and many people who are very rich come very rich in the financial sector and hate the job they're doing.
Certainly, they also get on a kind of golden treadmill in which they realise they can't afford to get off it.
In terms of decreasing aspirations, they are quite bright.
Forgive me, Mr. Jones, but I want to try and get on to another question. This is a question from Theo.
I'm an undergraduate finalist in history and economics here in Oxford.
Frustrated with the economic curriculum, if so many current thinkers agree that the economics needs to be reformed.
Why has the undergraduate curriculum curriculum not changed? Paul, there are moves afoot to change.
Without that, there are. Indeed, there are. Indeed.
And I mean, it's very much related to the the bafflement that John spoke about at the beginning.
It's it's rebasing economics on a better understanding.
I think of two things. One is of human nature. We're not saints.
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.
We are capable of being dragged down to that level and the worst sort of firm does that.
Dragging it provides an institutional setting which reinforces those tendencies,
but a good institutional environment encourages a better, the better angels of our nature.
And we're a very unusual mammal because we are hardwired to be more pro-social than any other mammal.
So we've got better angels as well as worse. And so and so that's that's part of it, really.
I think one thing that has happened to me in the last few years is that I feel I've learnt more
about economics by reading things that weren't economics than things that were what actually,
Paul and I were on the call earlier in the day and discussing issues with Joe Henrik, who's the anthropologist.
Even you interested me notion of apology at Harvard and his book Secret of Our Success.
The more recent book called which are books that have both had a profound influence
on me in the way in which I think about economics and my recommendations
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.
So I think that's let me add to that John's recent contribution of the exploration of radical uncertainty because economics is still
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.
And so we don't even try and maximise. And that's the world of radical uncertainty.
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.
And that plus facing up to radical uncertainty, there are the two big intellectual revolutions, which are economics needs to digest.
There were two interesting postscript to that question one from Samantha Knight saying the history curriculum similarly
needs revision and one from Daniel Scharf who points out that given the preponderance of Oxford graduates in high places,
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.
I think this is one for John. How do we best deal with the greed of multinationals?
The greed is an inverted commas of multinationals, which makes it so difficult for smaller domestic or regional firms and initiatives to compete.
What sort of international regulatory framework do we need?
Well, I think if we think the answer is international regulatory framework, we will be spending a lot of time for not very much.
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,
and the idea that the purpose of antitrust is to encourage pluralism.
Because most new ideas don't come from well-established companies they come from,
they come from smaller, innovative companies is important to understand.
But there's a corollary of that, which is people always exaggerate the power which established multinational companies enjoy.
A year or two ago, I got fired BBC journalists doing a programme,
and she talked to me about the dominance of companies like Google and Facebook and so on and said,
Are there any examples in the history of large established companies like these that have actually lost their market position?
And I said to her, look, it would be a lot easier to find things.
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,
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.
And there's no overlap between the top 100 companies today in the top 100 companies 100 years ago.
Very little. And Exxon Mobil has for a long time been the survivor.
You might ask how bright its future is now.
And General Electric US General Electric was the other long term survivors survivor and its who is a company in rapid decline.
We're just watching Boeing, which dominated the civil aviation market for 50 years.
A company that is seriously struggling and shell reported why and why is why is and why?
Yes, that goes back to my fall of the icon story.
Yeah, I fear that this is going to have to be the last question, and I think it's for pole.
It's slightly different from what we've talked about it, but something you've written a lot on.
Shouldn't we now forgive all debts? And I think this is what the questioner is.
Ghost answering the machine may not forgive all debts,
which I assume as national debt in order to make climate change and planetary problems insoluble by capitalism.
That law requires that forgiveness for national debt.
We need we need to do a lot more for poor countries.
Undoubtedly, COVID has been a catastrophe for poor countries, not because of the health shock on the whole.
Poor countries have handled the health shock better than rich countries, but the sink synchronised macroeconomic collapse in China,
India, Europe and North America has produced for massive macro hits to the poorest countries in the world.
I won't go through them, but lower commodity prices for stock.
All those hits are transfers from the poorest countries to the richest, inadvertent transfers.
We need to have big money that compensates for that.
I don't particularly want to do it through cancelling debts.
I want to do it through proper new flows of money because that can be first of all, cancelling debts cuts off a lifeline.
I'm dealing with some very fast growing African countries that have been interrupted by COVID.
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.
They want to build reputation in capital markets and buy gold.
Some of them have done it, and not all. Not all African countries.
Some have behaved very responsibly, but some built responsible behaviour and good reputations that there's not
enough public money to lift the poorest countries out of the mire of poverty.
We need a lot of flow inflows from firms and inflows from capital markets.
The tragedy is that we've not been able to tap into capital markets anything like enough.
So we need public mechanisms which tap into capital markets.
And so the spirit of the question is absolutely right.
We need a big help, financial help. But the actual mechanics of the question?
Debt relief is not the right modality. I think, John, anything you'd like to add.
No, I think that's the one thing I would add would be that actually,
it's getting Western economic institutions to operate effectively in these countries,
which is different from the spirits of a lot of the questions that have been.
That's what will make the difference to cool people, and then, of course, society's.
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,
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.
On next talk is this time next week, when Christie will be in conversation with Dame Sally Davies,
talking about some of the issues about antimicrobial resistance going ahead.
I'd like to hugely thank John and Paul for a really fascinating discussion.
Paul, you answered Theo's question by giving him a reading list,
and you were far too modest to say that what he really does need to do is to go away and reread his bed.
And when he's finished that to go on to the future of capitalism and radical uncertainty,
it's wonderful economic thinkers such as you are writing for a general audience as well, and that will really make a difference.
So thank you very much indeed for the fascinating conversations. Thank you, Charles.