We have a fabulous event this afternoon.
It's a panel discussion around the topic of capitalism, what has gone wrong, what needs to change and how it can be fixed,
and the four people joining me this this afternoon this evening are the editors
of a special issue of the Oxford Review of Economic Policy on Capitalism,
which has been published, and we'll make certain that there's a link to the to the issue on the website.
If I can remind the people in the audience that the talk is livestreamed and recorded.
For those of you watching on crowd cast, you're able to ask a question.
There's a bottom at the bottom.
A button at the bottom of your screens could ask a question, and you also have the capacity to vote on the questions that other people have asked.
And that's helpful for us in knowing which ones to ask.
So let me begin with some introductions. My name's Charles go for I'm director of the Oxford Martin School.
I'm going to introduce the people in the order in which they're going to start and talk.
Beginning with On My Left Professor Colin Meyer, I have said that all of the people joining me this afternoon has such distinguished careers
and have written so many books that if I was to go through everything they've done,
there be no time for anything else. So very briefly, Colin is emeritus professor at the Science Side Business School.
Amongst his many roles, I'm going to mention one, which is the Natural Capital Committee.
And before I met Colin, I heard about him when a colleague of mine, another scientist was raving about Colin says he can make accountancy sexy.
So has many contributions. And I'll mention one book of his which is prosperity.
Better business makes the greater good.
Also on the home team is Paul Collier, Professor Sir Paul Collier, Professor of Economics and public policy at the Blavatnik School.
Again, amongst the many things he has done between 1998 and 2003,
he was director of the Research Development Department at the World Bank and amongst the very many influential books he has written.
There is greed is bad politics after individualism,
which he wrote with John K. And there was a discussion last year between John and Paul, which is on our website.
If you want to hear that our third speaker is Diane Coyle from Cambridge and
Diane is professor of public policy and co-director of the Bennett Institute.
Again, that's just a huge number of things, many things in economics, but was also vice chair of the BBC Trust.
Again, amongst the many books I mentioned, actually, in Diane's case, two one is with the wonderful title GDP a brief but affectionate history,
and her latest book is called Some Monsters, What Economics Is and What It Should Be.
And Don was in conversation with Ian Golden a couple of weeks back on the book, and that is also on our website, if you'd like to look at it.
And then finally, Martin Wolf, who's the legendary financial journalist and chief economics commentator on the at the Financial Times,
again, just to pick out one of the many things he's done outside outside journalism.
He was on the UK government's Independent Commission on Banking, the commission that was chaired by John Vickers from Oxford.
Again, just to pick one book, the shifts and the shocks, what we've learnt and have still to learn from the financial crisis,
a really insightful analysis of some of the issues there.
So what we're going to do is each of our four panellists is going to give a brief
commentary on one aspect of the issue around the crisis of capitalism at the moment.
We're then going to have a discussion amongst the panellists for about 20 minutes and then for the last half hour,
we will take questions both from the floor and from our virtual audience.
And the event, we're planning to finish around about 6:30. And so, Colin, could I ask you to begin?
Well, thank you very much, Charles, for introduction and for hosting this event.
Business is probably one of the core components of capitalism thinking about whether or not we can create a capitalist system that we wish to have.
Business is clearly a critical component, and there's one view that says the business is psychopathic.
Indeed, one of the authors in the issue goes in that direction psychopathic and being exploitative, manipulative and corrosive.
Exploitative in terms of seeking to pursue benefits for itself, privileges, contracts, et cetera.
Manipulative in turning regulation to its advantage.
Undermining competition policy, avoiding taxes and seeking to gain from public procurement.
I'm corrosive in terms of undermining our ethical principles and our moral values.
What it is to be human, kind and considerate.
Now, there is a view that that just prevails in the financial sector, but actually,
I think we've learnt recently that it's not just in the financial sector, it's widespread.
Anyone who's read Patrick Radden O'Keefe's book, which I think is probably the book of this year called Empire of Pain about Purdue Pharma,
will recognise just how pathological a business can be.
The view that that then elicits is the only way of dealing with this is through the strong arm of government and regulation.
At the other end of the extreme is the view that says that business clothes, feeds and houses US employees and investors savings.
It's the source of economic prosperity, reduce poverty and the growth of nations around the world.
And the prophet is the main driver of that in promoting innovation, competition, efficiency and the like.
And all we need to do is basically to keep government and regulation out of it, and it will go on doing them.
And in between, there's a view that says, yes, business has those benefits, but it's also a source of environmental degradation.
Inequality, social exclusion and mistrust.
And that means that we have to address those issues.
And Rebecca Henderson in particular in the issue considers the implication of that in terms of saying,
well, it's naive for about just how government and regulation, nor is it about an absence of regulation.
It's about thinking about why this business exists.
Why did we created? She argues that the reason that.
We've done that is not simply to produce profits, it's to produce solutions to the problems that you and I face as individuals,
as communities, as societies and the natural world. And to do so in a way that is profitable, financially sustainable and commercially viable.
But not to profit from producing problems. And indeed, if you go back of the history of the corporation from 2000 years ago,
it was established as a very public organisation and then it took on the form of running municipalities,
the Catholic Church, Oxford University and the like.
And some of the most impressive companies in the 18th,
the 19th century have been Quaker and Unitarian owned and run companies, which have been purposeful in nature.
Now there's a school of thought that says that all you need to do to achieve that is to have the right type of leadership,
the right cultures and the values and the right incentives and organisations, and it will happen.
But that does not address those pathological cases.
They need to have something which not only facilitates companies in terms of being purposeful, as I've just described it.
But also ensures that they're held to account for delivering on that.
We need to have the right ownership, the right governance, the right financing and investment to promote those companies,
but we also need laws and regulation and ways of measuring performance to ensure
that they really are sticking to that because this is a systemic problem.
We've got a system that is designed around laws, regulation, ownership, governance, measurement, performance, the mentioned investment around profits.
We need to do exactly the same thing in terms of a system around producing solutions to the world that are profitable and not problem producing.
And that means that we need to hold those running companies and those owning companies to account for achieving that.
It requires the measurement to do that. But above all,
it needs the ability to impose the liabilities that companies are causing on those companies that they should properly cost the expenditures of those.
And if they fail to do that because they do not have sufficient reserves and seek to simply exit by bankrupting themselves,
as indeed Purdue Pharma did. Then the directors and the owners should be liable for that.
We should be able to penetrate the corporate veil, as it's termed, in terms of going to those who are really responsible.
For the damages that they do now, that has the implication that it's neither a matter of just heavy handed regulation that will solve the problem,
nor is it to reduce regulation,
but to think about ways in which we can lend real credibility to companies and businesses doing what we want them to do.
And let me just conclude by saying. That this will then deliver a lot of what you're going to hear in relation to the other
speakers about the importance of community and the relevance of things happening at a local
level because we need local businesses to be able to implement policies and deliver economic
benefits at a local level in a way in which in the absence of devolved government,
we will not get.
But we also need to have a business that can provide what central government is seeking to do at a national level because governments do not,
as we've seen, have the resources required nor the innovative capacity to deliver what is needed at a national level.
Think about it. What is it that actually delivering the solution?
At the end of the day, it's not just public health management, it's the vaccines that are being created.
And unfortunately, not sufficiently distributed around the world by the pharmaceutical companies.
And that's at an international level. It's not the agreements between governments that have caught the headlines from Cop 26 in Glasgow.
It's the commitments that we hope will actually materialise of more than 100 trillion
dollars of assets under management being devoted towards solving global problems.
If we can hold business to account for doing these things and our investors,
then we have a potential for reforming our capitalist system for the better.
Thank you. So Collins given me a really nice start, because you sort of pointed towards a place as something that really mattered.
And so I'm going to pick up the theme of a place,
and the structure I'll follow is that globalisation for all the good things that's delivered has caused big differential effects on different places.
It's caused some places to go down, as well as others to go up, and that place space focus matters.
So there's the problems, the playspace problem being generated by a globalisation.
And then we're going to turn to national policies and see how they have ameliorated or failed to ameliorate that problem.
And then finally, we'll turn to local solutions.
So and I'll probably if I have the time draw on specifically explicitly on some of the other contributions in the orchestra issue,
and I'm going to start with that with Kevin O'Rourke and Kevin sings that sings a Hindu
phrase to globalisation for all the good things it's done in reducing global poverty.
But and then there's the but it's produced big effects in places because they replaced concentrated effects some very benign,
like the concentration of opportunity in London, partly because of the national massive concentration of public policy, the favoured London,
the partly the concentration of collapse in some places where the local industry, which had been global, collapsed.
And so in that place, concentrated collapse mattered.
Why did it matter?
And again, it all picks it up because nearly everybody, except a relatively small minority and nearly everybody belongs to some place.
At a minimum, the place they grew up, in fact, most people live their lives in or around the place in which they grew up.
The people who detach completely from place, a small minority.
And so when a place collapses, people don't want to leave it.
They've got their families, their attachment to that place. And so they suffer an agonising choice.
Get out and suffer this huge loss of connexion with place or stay and suffer the huge loss of income from the concentrated collapse.
The. Because people identify with place they stay, but they also get dignity from work.
And so the attempt to ameliorate this just by transfers, which was the typical national policy, completely misses the point.
The people are not just consumers, they want to get dignity from those jobs that collapsed.
Coal miners were immensely proud of being coal miners, steelworkers immensely proud of being steelworkers.
And and so that loss of dignity is another huge hit.
It concentrated in those places, so entire communities lose a sense of purpose.
And Martin, how do we pick that up with a useful distinction, which started with Tony Snow, who's also a contributor?
And that is a distinction between a fortunate group of insiders who are well connected to the jobs, well connected to power and influence,
and the majority who outsiders distant from power and not equipped to get the rewards of globalisation and.
Hillary suggests that the insiders have got not only disproportionate advantages,
but have disproportionate influence, and that has perpetuated the the failure of national policies.
Let me turn now to national policy, and there's a stream of libertarian thinking epitomised by bezels as to Bezos.
Look, the other two. And this all seems to think that the best public policy is zero public policy.
And so either the libertarians in the West Coast.
I suggest they don't have to do the thing they most find very unpleasant, which is come together to work and cooperate together.
They can be radical individualists because the Nevada is already there.
Only us. There's a place without any public policy, indeed, any government is called Somalia.
And but they seem to prefer to buy territory in New Zealand.
And so if if if the absence of government was was all we needed for prosperity, Somalia would be the most prosperous place on Earth.
It's actually the most impoverished.
So what has happened is and here I pick up with Tim Besley, a derailment of capitalism which needs actually public policy to put it right.
And we haven't had active public policy, partly because of the Margaret level on points out.
What we've really had is a shrinking of the notion of liberty, such that liberty just means freedom from government,
and that is a ridiculously shrivelled view of what of what true liberty means.
Disney argues that the focus of economics for the last 40 years, which has been the study of markets, is actually the wrong focus.
The really important thing is not markets is government, and it's the failure of government to address these very severe spatial problems.
I haven't got time to dwell on many of these things, but I would definitely pick up on one theme,
which is the importance of building willing compliance in population and willing compliance comes from a sense of reciprocity.
Reciprocity is very much easier to build at the local level than it is at the global level or the national level.
And that leads to Rajan's argument.
Marvellous book and a marvellous article that and it's a plea for subsidiarity.
The principle that the British government insisted upon in the European community, but it applies not just at the level of the European community.
The principle of taking a decision down to the lowest level, which is sensibly be taken.
It also applies within Britain and unfortunately, Britain is the most highly centralised country in the whole of the OECD.
So the same principle of subsidiarity should actually push decisions down not just from Brussels, but London, from London to to the regions and the.
So once we got to the regions, what do we need in the regions?
We need agency. If people don't have agency, then they've not got dignity.
It's back to that scheme of of. The ability to contribute to a community comes from having agency to be able to contribute.
And that means a decent job. One of the things that a number of our contributors emphasise is the value of skills,
not the fancy skills of the the London bankers who is so expert in looting and full service industry.
The Russian billionaire crooks all all available in London.
Not that sort of skill.
The mid-level skills and robbery makes a very good plea for building mid-level skills, which have been shrivelled over the last few decades.
Mid-level skills and Kaushik, I think, comes up with a really good point that the markets are very often not the best way of allocating resources,
especially at the level of a local community. And one key resource that is allocated is skills.
And he emphasises that a Swiss. City or a Swiss town?
The local business community sees its job, its moral purpose, as including equipping the next generation with these mid-level skills.
And so the skills market is not a good the market for skills is not a good application of that process.
Britain has relied on a market process for mid-level skills and we've the mid-level skills of collapsed because the market isn't a very good device.
It's better to do this a community based thing.
And I'll end with one really powerful point, which which actually comes from Kaushik Basu.
And that is that the sort of technical progress we get, whether it is job killing,
killing all lives, mid-level skills or job creating is actually endogenous to the public policy.
We choose to have over decades we can push public policy in such a direction that it generates technologies
which need mid-level skills or we can keep on going as we have been and the mid-level skills shrivel.
Thank you very much. I'm going to pick up on some of the things that Paul just to discuss and anybody would think we have planned this carefully.
What's wrong with capitalism?
It's a big question, and it's a bit like one of those Agatha Christie novels where it turns out that everybody is guilty.
And you do get that flavour from the articles in the special issue,
which have a number of different perspectives on what is that's going on with capitalism.
But I just pick out a particular chief villain, and that's the mental model that that is completely pervasive in policy and in public debate.
The mental model of how the economy works,
and it is that Thatcherite Reaganite Chicago public philosophy that free markets are the answer and based on
the hierarchy and kinds of approaches and a set of assumptions that delivers you in almost every context,
the answer that there may be some specific problems to fix.
But on the whole, you're going to get the best outcomes for society if you leave it to the market,
and it's been an incredibly, incredibly firmly rooted philosophy.
Despite the growing evidence over a period of 30 or 40 years that it's just not correct that reasonable people can disagree about economic management.
And after all, conservative governments have nationalised plenty of businesses themselves in recent times banks, railway operating companies,
satellite companies and a long but secret list of businesses in which they've taken stakes during the pandemic.
Hard to imagine why we can't know what they are, but we don't. So there's always some give and take.
There's no very pure version of the free market philosophy in operation.
But the idea the idea is really powerful and firmly rooted.
The idea that the market and the state are separate spheres and that the two things that matter as they sort of are opposed to each other.
If you read Kate Bingham, speech will go back and listen to it that she gave here in Oxford a little while ago.
Last week, I think it's full of great examples of the cost or the potential cost or the near cost to the whole
vaccine effort of how deep rooted that perception is in public philosophy in the civil service now.
And there's an analogy to the idea that if you intervene at all in industrial activity, you're picking winners when of course,
the winners turn out to be losers and the generation of senior policy leaders in the UK and the US through at the moment have this deep rooted fear
that they will repeat the same mistakes that they perceive were made during the 1970s of continually pouring taxpayers' money into failing industries.
And so whenever you talk about a strategic role of the government in economic activity, you will get this.
This concern, Heidi, back to you. But so the idea is that the state will fix identified market failures and then it will get out of the way.
And we've now come to have a debate about environmental externalities as a very big market failure,
a global market failure, and there's some acknowledgement that the state has to play a role there.
But again, a sense that actually the private sector is going to do a lot of it.
The private sector will do the investment and actually just a complete lack of understanding about how private businesses operate.
If you're going to make an investment in a technology which is risky because of technological uncertainty, then you need that de-risking in some ways,
and the government can do that in important ways by guaranteeing a market,
by setting technical standards, by aligning people's behaviour in that kind of way.
There are, of course, lots of examples of government failure, although in my eyes,
many of them are due to governments trying to mimic the private sector too much.
So you get examples of what's called new public management targets setting in government,
the idea that this would make public servants more efficient, which has actually led to them trying to deliver the targets rather than delivering
the broader outcomes that their previous professional ethos would have towards.
But it's not that there are no problems. There are many examples of government failure of taxpayers money being badly spent.
But the challenge of using resources efficiently and allocating resources in a complex economy is just inherently difficult.
And governments and markets will often fail in the same places for the same kinds of reasons because this asymmetric information,
or because there are increasing returns to scale that create natural monopolies.
And so you might find that a nationalised monopoly doesn't work very well.
But actually regulating a privatised monopoly is very difficult, too.
And so the question really is what mixture of forms of organisation of economic activity will address problems or challenges that we think we face.
And that institutional landscape is just much richer than the market versus the government.
And it would encompass companies, government bodies, independent agencies, all kinds of other organisations,
local, national and much richer tapestry of ways of thinking about economic management.
And so we ought to be thinking of some of the articles point a to point out about industrial policy.
We've had an industrial policy in the UK. In fact, we've had lots of them.
We've had one about every two years and we've got a legacy of different kinds of institutions,
a very complex map with overlapping responsibilities, which all adds up to a lack of strategic management tool.
And in this country, even within the United States, it's because we have taken seriously this philosophy of leaving it to the market.
Politicians can't resist the temptation to do something about a specific problem to intervene
in the steel industry or whatever might be the pressing political problem of the day.
But they don't take it seriously, and it never becomes a strategy.
It never becomes intentional. It even comes down to an unwillingness to coordinate in areas where coordination is clearly needed.
And I think this is partly because this philosophy has prevailed for so long
that civil servants just don't know very much about how businesses operate.
They don't understand it very well. They've lost all the knowhow that they would have had in the 1970s.
And one time I remember taking a friend who was trying to campaign to get shots, to close their doors,
to save heat for environmental reasons, to see a senior civil servant to argue for some regulation.
And the reason that shops do this is because they want to pick up impulse purchases.
And if you're the only shop that closes your door or the impulse buyers are going to go to the shop next door.
And this means that all the stores along Oxford Street or Big Shopping streets have their
doors open and they're blasting heat to keep the stores warm and it's very inefficient.
And the civil servant says, but you know, the market will fix this problem because if they just close the doors, they save lots of money.
So why aren't they doing it and simply could not get their head around the coordination problem?
And so what we need to think about is a different kind of philosophy, understanding that what is the right thing to do will change over time.
Technologies will change the characteristics of the economy.
The digital economy needs a strategic management in a different way than the digital economy does.
It will depend on context what kind of crisis that we had.
It would depend on culture.
Voters in different countries will have different preferences, and there are lots of moral questions and that questions about purpose,
questions about autonomy of local and local people as we've been hearing, but not universal ideological problems.
And so that for me is one of the key issues addressed in this special issue.
And whatever you want to call it, the Chicago universal ideology or the neoliberal universal ideology has failed
as comprehensively as the ideology of planned economies that did 30 years ago.
And we need a much richer and much more humane way of thinking about the relationship between the stage,
the market companies and the people for whom we are supposed to be delivering in the first place.
So let's get. Come on.
Stopped. Well. So it's a great pleasure to be here.
And as I have the loudspeaker, I have no time limits, except, of course, when the chairman imposes.
But before I start, I got to say I'm really as an outsider.
My contributions to this volume were little more than appearing and having my name on the front page.
I'm giving away a terrible secret.
But I did read the papers and I do think it is a truly remarkable set of essays and some of that flavour you got from some of the description.
Very different views. Very thoughtful and on what is a pretty clearly an enormous topic,
namely the economic system within which we work and not just here, but across the entire world, which shapes well.
And I want to congratulate the editors, whoever they were for what they have done.
What I'm going to do is not talk about something that is directly addressed in the issue,
but I am going to talk about something I've spent five years thinking about. And it is, I think, incredibly important.
And it is why my own views have changed so much in this area in the last six or seven years.
And that is about the relationship between capitalism and politics. And above all, Democrat Democratic politics.
And I'm just about to complete a book called The Crisis of Democratic Capitalism, which should appear next year.
And you probably will get what that's about.
And I'm going to give you a very brief and incredibly simplistic summary of the core view that I have of why we cannot
think about capitalism and the economic system without thinking about the political system within which it's embedded.
And I'm going to start, if I may, with a quotation I like to tell you it comes from.
It might surprise you. It is clear, then, that the best partnership in the state is the one which operates through the middle people,
either middle classes and also those states in which the middle element the middle classes is large and stronger impossible than the other two,
the plutocracy and the very poor. The other two together or at any rate, stronger than either of them alone.
These are the states that have every chance of having a well-run democratic constitution.
And this statement comes from a not undistinguished figure who wrote this book two thousand four hundred and fifty years ago, namely Aristotle.
So we are not talking about something new,
and it is one of the two most important books written on politics over the other of sweeping Plato's Republic in a liberal democracy,
a democracy characterised by individual civil rights, the rule of law and respect for the rights of the losers and the legitimacy of the winners.
Fair elections are a necessary condition for determining who holds power legitimately.
They are what made democracy meaningful.
Attempts by a head of government and and state to subvert an election or overturn the vote are treason to democracy.
Yet that is exactly what the president of the United States, Donald Trump attempted to do both before and after last year's presidential election.
He failed, then decent and pray. People ensured that.
But this story has, in my view, only just begun.
The amateurish Stop the Steal movement that he invented at the last election has now moved in the United States.
Clearly the most powerful democracy in the world into a well-advanced project.
One part of this is to remove officials who stop Trump's efforts to reverse the results in Republican held states, by the way.
Twenty six of them fall into that category, and you know how many states there are?
Sure. But the main effect is to shift responsibility for deciding electoral outcomes to the legislatures.
Trump is, of course, not alone in these attempts.
Freedom in the World 2021, which is published by the very well respected watchdog Freedom House, published only in February,
a report which stated that he was marking the 15th consecutive year of decline in the health of liberal democracy across the world.
The Democratic Recession, quote unquote,
which had first been noted by a very distinguished scholar scholar Larry Diamond of Stanford about 15 years ago,
is now surely very close to a democratic depression.
So when you think about that, this has forced me to go back to how we got democratic capitalism.
How did this happen and why?
According to the Policy four database, which is the most authoritative on this subject, there were no democracies at all in any real sense.
Two hundred years ago. Go to that debate. I'm going to time even where Republican institutions did exist,
the franchise was incredibly restricted on grounds of sex, race and wealth in the United States in the initial period.
The franchise was about six percent of male voters right then in the 19th century franchise began to be widened.
Universal suffrage democracy emerged and spread in fits and starts to cover half of the world's countries after 1990.
I don't have time to go through all that history. So why did this happen?
My view is that the answer lies in significant part with the emergence of a very difficult
but ultimately fruitful marriage between a liberal economy and democratic politics.
I define market capitalism and democracy as quote-unquote complementary opposites.
Both words are important. The market, economy and use of universal suffrage democracy both share the following things
they reject ascribed hereditary status and therefore hereditary oligopolies.
Market capitalism rests on ideals of your free labour, individual effort, reward for marriage and the rule of law, property rights and so forth.
The democracy rests on ideals of free discussion and debate amongst citizens when making the law.
There are obvious, at the least, complementarities between these ideals.
Historically, the market economy brought urbanisation what he did.
Rising demands for an educated workforce called touches on this.
The working class is a potent political force and the new opportunity as economies began to grow for a more positive some form of politics.
Democracies have also rested on the existence of an independent citizenry.
What Aristotle called is middle class without some degree of private property and markets,
which are open to all crucial, such an independent citizenry cannot really exist.
These are the respects in which the market, economy and liberal democracy are complementary.
Yet they are also opposites. Capitalism is inherently cosmopolitan.
The democratic state is, of course, territorial or even local market is the domain of exit.
Democracy is pre-eminent the domain of voice. The market economy is an egalitarian that's obvious.
Democracy is egalitarian. It is rests on an inherently egalitarian ideal.
One person, one vote in every individual is entitled to engage in political life.
Tensions between capitalism and democracy are inevitable and deep.
If an economy fails to serve the interests of the majority, the sense of shared citizenship will fray and demagogues will inevitably emerge.
This is what Plato's Republic is about. Democracy may then be transformed into plebiscite free dictatorship.
The arbitrary rule of one person or be suppressed by oligarchic reaction.
Surely you can see both today. So what has gone wrong with the system in our world?
Why has this difficult marriage become so imbalanced? Well, my own view is pretty conventional, but it's obviously true in life.
I think huge rises in inequality and the deteriorating prospects of the old,
respectable working and middle class in core democracies have been breaking the system.
The fear of downward mobility, not just fear.
The reality has created what sociologists call status, anxiety and pervasive political cynicism and despair.
These of them being diverted and exploited by skilled propagandists into cultural and racial resentments, especially in ethnically diverse societies.
The emergence of new media facilitated these trends, but in my view and I have a long discussion of them, they have not created them.
The big question is what happened to create a distinctive society, especially people who did not go to university in the long run?
I believe the important phenomena have been the failure of the capitalist system as we run it stagnant real wages and incomes,
the middle of the distribution, declining social mobility, deindustrialisation and so forth.
And the most painful indicator of all these dysfunctions has been falling life expectancy,
particularly amongst non-college educated white people in the richest country in the world.
The US noted by Anne Case and Angus Deaton in their small study of that of deaths of despair,
easy credit papered over these trends, but that blew up in the financial crisis.
The scale and visibility of the crisis and subsequent rescue of the banks and bankers convinced many that the elite was both corrupt and incompetent,
and they have many other reasons to believe that try and numerous you my book at length.
We have developed a form of what is quite visibly rent a cop capitalism.
How does this system now fit into today's world and where does this leave us in a very important book?
Branko Milanovic argues that capitalism is now it alone.
It has one. I'm not going to go into that question. It raises too many other issues,
but no other credible system for organising production and exchange in a complex modern economy now exists and some form of market system.
But the crucial question is what sort of capitalism as one is it what Milanovic calls liberal capitalism and I call democratic capitalism?
Or is it what he calls political capitalism? Or I would call authoritarian capitalism?
And there are two forms of authoritarian capitalism in our world and about doing rather well.
The first is the the rise of states in which would be,
or actual autocrats basically take over democracies from within and replace it
with an autocratic regime in which everybody is loyal to the great leader.
There is so many of these regimes in the world, I don't think I need to enumerate them.
The far more interesting challenge, of course, is what I refer to as bureaucratic, authoritarian capitalism.
And the best example of that and the most important challenge of democratic capitalism is, of course, communist China.
And I take the view that this is a system with very considerable problems, but also huge achievements,
and it's a genuine challenge to the democratic capitalist system in which I continue to believe.
And that leads me to my very last point.
The challenge for those of us who believe that we have to renew democratic capitalism and we should not let it perish.
And I think the dangers are very severe in the renewal of democracy,
and capitalism has to be animated by a simple but powerful idea that goes back to the Greeks themselves.
And that idea, of course, is citizenship. If democracy and citizenship is local, it's territorial, it's not global.
If democracy is to work, we cannot think only as consumers, workers, business owners, savers or investors.
We have to think as citizens and that citizenship must have at least three aspects loyalty to fundamental
democratic political and legal institutions and the values of open debate and mutual tolerance that underpin them.
Absolutely overriding concern for the ability of fellow citizens to Liverpool filled life sort of thing that Paul
and Colin and Diane have been talking about and the desire to create an economy that allows citizens to flourish,
which will, in my view, be a reformed capitalism of some kind.
My conclusion yet that is that nonetheless, some of three things remain the same.
Human beings have to act collectively as well as individually. Acting together within a democracy means acting and thinking as citizens.
And if we do not do so, not only the capitalist system, but democracy itself will fail.
It is in our duty and certainly I view it as mine to try to ensure it does not.
Thank you for this. Thank you very much.
Those were all really fascinating short talks. Can I invite the panellists to ask each other questions?
Is there anything that came up that and one of the other stories that you would like to ask a particular point about?
Well, that's a good question. I quite like to. Discussed with Martin the claim that.
Capitalism, the market system has one. And I'm not sure I agree with that.
Okay, good. So if your point is that there will always now be an element of market activity in the economy?
I would agree. But in my mind, the way that the economy has changed depends on intangibles.
More digital means that there are more public goods in the sense in which economies mean that more natural monopolies and more
role for governments to guide technological pathways and therefore less of that sort of free market version of the market.
And so I think there'll be a different array of institutions which will have corporations,
of course, and private markets, but more different kinds of bodies.
And we're not it's not clear what kinds of bodies those would be. So if your point is, there will be another market, I'd agree with you.
But actually, I'm not sure that that is the same as saying the market system has one.
OK, well, that's the thing you want me to answer. Yes, go ahead.
We have an hour and know I'll be very brief.
I mean, this is a shorthand, obviously, and.
I think that what Branko was trying to say and what I'm trying to say is there was a huge debate.
There were two big debates going on in the 20th century boards about two huge debates.
One was a debate on whether essentially you could eliminate private property,
private property greed and all that stuff from the economy and replace it with a socialist economy in
which decisions were made either by some form of cooperation that that was never really tried except.
Just debate about Yugoslavia or centralised socialism.
And I think that debate has ended.
Right, so we agree on that. Yes, and that's the sense, I think, in which Frank, who came from Eastern Europe means that capitalism was one.
Then there is a second debate where you can go and you know, which is, well, what sort of capitalism and what do we mean by it?
And here, I don't disagree with you. What I argue in my book is that what we think of as capitalism.
In terms of its institutions, how the institutions themselves, well, what the dominant institutions are,
how they're governed, how they relate to the state, civil society is actually being extraordinarily mutable over time.
In fact, the mutations have been quite dramatic in if you compare the capitals of the mid-19th century with the early 20th
century very much after the new deal and the social democratic period and then the subsequent transformations.
It seems to me clear that within this general framework, we are and this is why this thing is so important.
Thinking very seriously and appropriately about how we should change this again there.
I don't have any disagreement, but my final point will be is that however, we change it,
and the Chinese are clearly part of this debate because they're doing something very unique to which we don't fully understand,
which has been remarkably successful.
But what I don't want to do or what I want to do is to ensure that democratic politics survives this process of transformation,
don't collapse and guide it.
So to me, the more important feature of this, apart from preserving certain absolutely fundamental elements of a market system,
is that we transform it in such a way that it works along with and fruitfully this fundamental idea of that.
We are all citizens of our societies. And that's really quite difficult.
So I think that's the way I see it. And I don't really think it's.
It's all different from yours. I do think very last point that.
Deciding exactly I mean, I would spend I'll have a long chapter on this,
and I'm not saying how far we disagree will be deciding exactly how to transform it,
to make it work in the way I want you to do which figures in its political ads is actually really, really hard.
I think we can agree about that. And that's the point. I'd actually just like to pick up with you guys, if I may,
because you quite correctly make the point very forcefully that we clearly need to have government and the market working together.
And yet there's a great deal of mistrust between business and government, and they haven't function well together.
I've pointed to some issues that I think arise in relation to the market business side.
What do you see as the factors that are needed to try and get a better degree of complementarity?
We're not in a good place with either, are we? Because there's been declining trust in business on the whole,
big business has been declining trust in government, which we've seen reflected in populist politics.
And in a situation where there appear to be sort of behavioural traps where you can't see whether political leadership
would come to get out of the hole that we've got ourselves in and have a kind of government that people would respect.
Again,
I think localism is part of that because there's a huge gap between what people feel about their national government and then more local governments.
That's a very important part of it. But I would agree with Martin,
these are really hard challenges that we're facing up to and in a context where structural
change in the economy because of technology and the challenges that we're facing,
such as climate change and all of the consequences that will bring a horrible situations.
So I hope Martin's mission succeeds, but I'm not always very optimistic about how we're going to bring about, and I don't have any easy answers to.
Let me try and challenge all of you.
And it seems to me the real genius of capitalism is devolved decision taking in the presence of a combination of competition and fluid cooperation,
which enables very rapid learning.
And that process of very rapid learning of innovation of dynamism is something that it's very hard for a bureaucratic system to achieve.
And I want to challenge, especially Martin, this is so unwise because I'm going to challenge your interpretation about China,
except that it will three know a lot more about China. But let me let me, let me try.
It seems to me that China for 40 years basically had both a fairly high degree of social cohesion.
Came together around a common purpose, which was forward looking and a very difficult system which simulated this process of very fast innovation.
And it worked on this common purpose in China.
This, to my mind, a sense that whatever else we are about, we want to live to avenge the humiliation of the first part of the 20th century.
We want a strong China. It wasn't about poverty reduction.
It wasn't about anything like that. I mean, here was a country which for half a century had a 50 percent savings rate.
That's astounding. But it was a common purpose.
If we are going to build a strong China, then under Deng, it's set up this amazing system that then was a provincial guy.
It wasn't a sort of Beijing Typekit provincial guy with a provincial accent,
and he devolved power to the regions and he built a communist system was common purpose.
He said, here's the goals. And then he devolved and said, We don't know how to achieve those goals.
Go and try and find out. Now, normally, if you tell bureaucrats, go and try and find out they'll play, save, do nothing.
And Deng's genius was to say, if you if you've done nothing in the first six months, you've failed.
And we throw you out of the of the Congress of the of the the young generation, and that runs for 40 years, every five years, a new common goal.
We don't know how to achieve it. You go and try and then some work, some didn't.
And then you hoover it up and you learn rapidly within that community.
Which is the secret of our success as a species, you learn from success now is over.
Why is it over? Because she she is the antithesis of things.
Approach is a highly centralised top down system.
It's a power grab is going back to Mao. Mao produced ruin.
I don't think she will be much more successful, but that's to my mind that it wasn't.
It was. It was. It was an exceptional form of social cohesion and dynamism, which stimulated a lot of the effects of capitalism and democracy.
Could I just say I absolutely agree with your analysis?
Up until the very last part as to what's happened over the last 10 years because
I spent quite a lot of time in China at the end of the 2008 to 10 period,
and it was clear that the system was working extremely well, moving in the right direction.
And at that stage it was looking around two models of round the world.
What next? We've done this. How do we move to a system that introduces some more market processes?
And they looked around the world and they couldn't find anything that they really felt appropriate to move forward.
And what was happening at that stage was it was a notion. And that created a vacuum in terms of ideas for going forward.
And that gave rise to what happens now.
I think that that is the real issue. What should China have done in 2010 to perpetuate the great success there?
And it was very difficult actually to come up with an answer to that question.
Well, I disagree with both of you about, but I'd like to bring it back to the discussion.
Well, I wouldn't claim colossal expertise, but it fits very well into the broader discussion.
So I've been going to China more about once or twice a year since 1993, and I've written a lot about it for them.
I definitively do not claim expertise of these because I don't read the language,
which is, I think one should be very, very clear about pretty important. My brother does, but hasn't helped me very much.
And I think China, what is happening in China is immeasurably important.
For everything, but particularly for this subject,
so it's a perfectly good thing because they have been trying to create a different sort of market economy.
And and since it's the biggest country in the world and has been the most successful country in the world,
the fact that they're creating a different sort of market economy with a very different political system is really important.
Now, I have to think most of our problems are internally generated.
I hope that's clear from what I said. But the fact that we have this entity out there is incredibly important.
So what can we learn from it? I think what Paul has said about Dong is largely correct.
The, by the way, also came from a provincial background. Not important.
But the but the dong was a very, very remarkable genius in that he was willing to take all these risks economically,
and he was equally willing to be utterly brutal and ruthless if there was any challenge of the political system, which he was.
So he maintained the absolute sovereignty of the Communist Party, the new emperor as it were and the and allowed an immense amount of experimentation.
And it was incredibly successful.
But I think and this is what I would have had in this speech if it hadn't had to be cut so much that they ran into a problem which actually China,
it turns out it's a lot of which run into many times in the past that if you run a system in which you
allow very high degree of decentralisation in the absence of any clear property rights whatsoever,
where everything is basically determined by officials working with business, you will guarantee that after a certain point, corruption explodes.
And the whole. And this became particularly severe after 2008, but was pretty severe before,
because at that stage, their macroeconomic policy came to rely very, very heavily tweaked.
So to absorb this incredible savings rate in basically the biggest real estate boom in the history of the world.
And the real estate boom was managed by local authorities and local officials became immeasurably rich.
This are not getting this from me. You've got the Chinese themselves,
say by doing deals with local property developers and and she became convinced and the people around you met quite a few of them.
And I'm not just agreeing, by the way, with calling, but I don't have time to go into that bunch that this corruption,
which was pervasive in the spring, was completely corroding the legitimacy of the Communist Party,
even though it's what it had done for wealth,
was so remarkable and it was going to be worse and worse because they realised by 2012 the growth was going to slow significantly, which it did.
And so she did what one does in these situations.
You went for an anti-corruption campaign, which incidentally,
was very helpful in getting rid of an awful lot of officials who were close to its rivals.
So we had a mixture of a Catholic school palace wore perfectly normal fine as stupendous book on the history of politics books three books.
The best thing come out of Oxford in 20 years, in my view, even compared with your wonderful works, I think semi-final was the gift of anyway.
This created a corrupt for a corrupt form of bureaucratic capitalism.
And he was very worried about you. He went to war a bit.
I mean, he became very concerned about the amount of inequality generated in this system.
He wanted to go back to common purpose, which he talks about.
And the way he sees that, however, is the Dungy's system creates these incredible problems.
So the way to do it is to go back to top down bureaucratic control, and that's where we are.
And so the question is really, really big question is, will this work?
Second order question is, do we have anything to learn from it?
And my view is there's not much we can learn from China, except and here I think we overlap that really,
we can operate decentralisation systematically because we have the benefit of
democratic politics at all level and we have the benefits of reasonably effective.
No, perfect to put it mildly, political systems. All we have to do is bring corrupt capitalism under control and then we'll be fine.
So we can learn something from China very, very important.
But this is not a model that I want to would consider for a moment is workable for us and all the other forms of autocracy,
a catastrophe we might and might also learn from China that they have been the
only jurisdiction to take real measures against technology monopoly capitalism.
They take much more decisive action against big tech companies than the US or the EU, just about party control.
And interestingly, we have done the opposite to the process,
Paul described with public services here in the UK and other western countries where we used to say we would like you to make people better.
We would like you to educate people. Here is the money. And now we will rely on your professional standards to deliver that right.
And we change that to a system where we said we will actually do some top-down control here.
Here are your targets and we're going to control you very Typekit and we turn them into
bureaucrats rather than the kind of experimenting experiments that we had before.
Terrible mistake. Incomplete. OK. Disagree as much as the theatre about because China started this process under Deng poor and still humiliated.
And as that produced the social common purpose left.
We want to talk as far as I was trying to achieve that strong China the the common purpose shrivelled and the corruption rose,
as which, as you say, was natural in a in a sort of communist light system.
And so it was a natural period of decay of common purpose.
So it had the it wasn't just sustainable.
Hugh Hewitt Xi's view would be that of who when period was the apogee of that and had to be stopped, right with some regret.
I'm going to interrupt you. Quite right. It's outrageous, really fascinating. But I do want to go to some questions.
I'm going to start with a question in the room second row there, and then we'll go to one from the virtual audience.
Can each of you tell me what you understand by compassionate capitalism and whether there may be solutions there?
Compassionate capitalism, to my mind, is about having a deep understanding about what the needs of different people are
and then the ability to be able to relate to them at whatever level is needed.
And that notion of compassionate capitalism requires exactly what we've just been talking about and engagement at the level at which the
problems arise at local levels and really ensuring that one understands the needs that people have at a local level in terms of social factors,
cultural factors, what promotes relationships, what promotes the transcendental as well as the relational and the material.
And that needs to translate that into well, how does one think about compassionate capitalism at a national and an international level?
So that that linkage, to my mind, is what is required.
And I think the components that we're talking about here in relation to the roles of markets, business,
government, et cetera, have to focus on that as being a key objective of what capitalism should be achieving.
I think compassionate capitalism is a is a.
Draws out the better angels of our nature, human beings are a mammal, but a very unusual mammal and usually pro-social.
And so we can be dragged down to the worst features greedy, lazy, selfish mammal.
All we can be raised up to the better angels of our nature.
The sociology, the mutual cooperation and what happens whether we're drunk, down or raised up depends upon the organisations in which we work.
And that's what capitalism provides. Capitalism provides workplaces, communities of work, which either drag us down or raises up,
and the tragedy of the last 40 years of capitalism is that all the financialization has
driven firms to be the sort of top down organisations that drag us down to being a greedy,
lazy, selfish mammal rather than raise those up to be a pro-social human being.
Thank you, Clara. One from the. So, Nicolette asks proactive government is indeed needed to address the deficiency of capitalism.
But will it suffice when power is like wealth is so concentrated? There are so many at the bottom of the pile, you have no agency in the economy.
Diane. Certainly agree with the premise of the question, which is that government is too too centralised, as Paul was describing.
And it's important for many reasons a agency needs differ locally.
The information that you need to govern local economies well is not available to the centre, so it's inefficient to operate that way.
And I think it's very closely linked to the issues of democracy that Martin was talking about as well.
And as I said before that the chasm in trust between local and central governments.
And so that decentralisation is essential. Obviously, we're in a very centralised country here in the United Kingdom.
Others have federal structures which have their own challenges. So I don't think that's a nirvana.
But I think it's safe to say that we're at one extreme and it isn't working very well.
So the answer is is somewhere more localised. I think there's bound to be a lot of experimentation while about how do local governments or subnational
governments engage people better rather than just repeating the mistakes of central governments?
And there's a lot of interesting deliberative tools which have been used incredibly effectively in Ireland for particular debates.
For example, digital tools and amongst local governments and cities around the world,
a lot of interest in a broader approach to understanding what making things better means in economic terms.
So not just GDP and jobs growth, important jobs, but also broader aspects of well-being,
which involves active engagement and participation by citizens.
Martin, I understood the question in part to put it in my language to be.
Weather systems of governance.
On now, so plutocratic. That reform is impossible.
And I grapple this with this, and the answer is, I don't know.
But in some cases and I have spent quite a bit of time. And obviously the US is the most important case, but it's not the way.
It's the most extreme. It's not linked. It is obvious to anyone who follows political processes,
work carefully that concentrated wealth both of individuals and corporations plays an overwhelming
role in notionally democratic systems such that we already outside Aristotle's world.
And I think the question of was, can we change that? I mean, that we should change.
It seems to me pretty obvious.
But whether we can change it, given existing power relations and give it, I'm becoming increasingly sounding like Karl Marx.
I understand this. Whether we can change it is a very big question.
Optimistic view, not terribly, is that we have done quite well in the past.
The extension of the suffrage, which I described, was itself a consequence of constant battles by people,
ordinary people to obtain political rights, which would allow them a voice to overturn an established oligarchy.
That's why the Labour Party was great, for example. So it clearly isn't hopeless,
but I do think that is a form of political mobilisation needs to be made in which
politicians and people engage in politics are able to tell stories to people,
ordinary people, the people who are just voting for Brexit.
I'm afraid who to choose to go for reforms which make a serious difference to their lives.
And at the moment, if you look at the Western political system, you just can't see this anywhere, and I don't fully understand why.
Probably I don't enough understand about politics, but that in the end, these are political questions,
and they will have to be resolved through enthusiastic activism and engagement.
The political system. OK, we're going to rapidly run out of time.
Clara will not launch this like three questions from the floor and then ask the panel to respond,
beginning with the gentleman in the green jersey and then a person with the hand up after that.
And if your questions could be as short as possible. Looking ahead, capitalism and governance are both affected by communications,
the rapid the exponential increase in global communications is going to affect.
Both have a second book change capitalism. Thanks very much.
If we could go to the question down there.
Hello. I would posit that unsustainability and inequality are the most significant market failures that humankind has ever seen.
How are these failures be solved and by whom? And in particular, given that their global problems is global governance?
Part of the solution? Thanks very much. And they and there's one other question than that.
And yes, just the slide, you think. I thank you for this fantastic discussion.
The political crisis is not just of like income of knowledge, so people at the top in different industries such as taking out.
Can you? Yep. So it's not just a capture of income and wealth.
I think it's a problem, but the capture of knowledge.
So the people at the top in tech industries or in banking industry that have such specified knowledge that's easy for them to
move into government and therefore regulate government because people in government don't understand these industries as well.
So how do we how do we solve that problem? Because then there's only a pool at the top that really understand these markets well.
Thank you very much. So don't feel the need to answer all of them, but just pick out any question you'd like to respond to Colin.
OK, so communications, inequality, sustainability and knowledge are first of all, on communication.
I'm actually very optimistic that communication can be a way of improving the operation of democratic systems,
both at the political and at the market level.
And we will have a way of encouraging much more participation in the democratic process in the way in which.
There's outside representation in overseeing what happens in companies, for example, participation in annual general meetings.
There is, I think, a real opportunity that communication can provide.
Now we haven't observed communication exactly moving in an entirely democratic fashion from the way in which companies have been using it.
But I think that that is something that should be a primary objective of the way
in which we develop communication in the future and equality and sustainability.
Does this mean that we've got to deal with things at the global level?
My answer to that would be a firm, not exclusively.
And I think if we had to rely on it happening at a global level,
as we've seen with climate change and CO2 emissions, it's not a very hopeful prospect.
We need to have a mechanism of dealing with these issues at a variety of different levels, of which global is one.
But we need to be able to address issues such as inequality at very much a local level because a lot of it is,
I think we're all suggesting, is a local phenomenon, as well as a global differential across the developed and the developing world.
On knowledge. My view is that that is.
A serious problem.
And one of the reasons why the system has become so corrupted is that there is a concentration of knowledge in those who are perpetrating.
The misdemeanours that it's extremely hard for outside bodies,
such as regulators to be able to keep up with what's happening within business within markets.
And so they're basically always trying to solve yesterday's problems.
And that's why I think inherently the notion of relying on regulation to solve our problems is destined to fail.
Of course we need regulation, but we also need people and organisations to recognise their responsibilities for not
creating the problems that the rest of us and societies around the world are facing.
And therefore, that knowledge and advantage and knowledge should be put to the advantage of all of us, not just those who possess that knowledge.
Thank you, Paul. I'll start with you.
Emphasise global communication, and I think that is a movement.
Producing a nightmare is it's going to be completely unsustainable given what's happening in the countries, the poorest countries in the world.
We've had two dreadful effects of global communication.
One is a grievance filled diasporas in in America, inciting ethnic violence in the poorest countries.
And that is that's one of the whistleblowers from Facebook.
And stuff has shown this is actually know is is is encouraged.
Are these global companies? This is extremist incitement, which is which is kind of tearing places like Ethiopia apart.
But it is a worse effect, which is that the very poorest countries.
Central African Republic, Sudan, a narrative is setting in because of this global communication that life is elsewhere.
And once people get their view in a society that the only hope is to get out the brightest leave and the economy crashes,
the whole society crashes because the brightest of the people who most needed in those societies.
And so I see that across West Africa, a narrative of the of the bright, bright young get out.
And that is that is that is disastrous has to be taken.
So at the market, forces do not lift the poorest countries out as as as they failed to do in Somalia.
We need a massive, coordinated effort to lift their economies out.
We've got agencies that do that, of course, development finance institutions.
Britain has a very good one. There are 40 of them around the world.
I'm convinced 30 of them each year are trying to get them to coordinate instead of just sitting there to make money.
So far, I've largely failed. I've got one. No, that's not fair.
I'll pass a site. Let's pick up on the sustainability question.
And if something is unsustainable, then it isn't going to be sustained. And the question is how it comes to an end.
But I'm not very optimistic about global governance. It hasn't worked well in climate, it hasn't worked well in global health.
And I was given a bit of hope by a lecture Pasta's Gupta gave in Cambridge last night about his biodiversity review.
And he argued that if you can change the grammar of what people think we're all about and have very powerful effects,
and so if we can change the grammar that we took in which we talk about the economics and not be about GDP growth and short term flows,
but to be about increasing wealth and part of our wealth is the services we hear
in the UK get from the Amazon through its regulation of the global climate.
Then that takes your mind towards policies like paying Brazil not to burn down the Amazon,
rather than trying to set up some global governance framework is arguing about abstractions that it hasn't worked.
And so that gave me a bit of optimism. I don't know if it will work, but I think it's more likely to work and global and see global institutions.
Thank you, Martin. The last word from you got. Well, I think these are wonderful questions.
And I think my main conclusion is this this is really all very difficult on
the communications thing I just want just since I'm the one representative,
the media here. I think this is one of the most important problems we have.
Because you can't conduct debates amongst citizens or amongst countries in which systematic disinformation and misinformation,
which are the product of rational, profit seeking businesses activities, is the dominant current of,
or a dominant current of opinion, information and knowledge dissemination across the world.
And so my answer to this really asking me my answer to this is all social media should be banned and the Chinese and the Chinese are right.
And this is the only thing I have written about yet, I should say, but I have to admit it is an immense problem.
The way I put it is we have perfect systems. We have developed a perfect systems for zero marginal cost dissemination of absolute falsehood.
And that's that's pretty, pretty terrifying.
And I don't think we know what to do with it. But I mean, putting Zuckerberg in prison for life might be a good start.
I we have to change the incentives. Really big time. I mean, not little time massively.
And that I mean, and it's happened. How do I find a case is is which is actually incredibly harmful?
I mean, this was the biggest drug dealer in the history of the world after the British state in the Opium Wars.
And the fact the family is worth about 10 billion dollars at the end of it.
That's a problem, isn't it unsustainability?
I wish I could agree with that solution, but I don't. Inequality is interesting because it overlaps with some things at a global level.
The last 40 years before COVID was rather good on inequality.
But the main reason is because Asia did so well. But Asia contains half of the world.
That's great. Africa will get there in the end.
So it sort of says that some of what we were doing in this terrible neoliberal globalisation period is just part of what Lao trying to do.
It was rather good and I would like to preserve it and not throw it all away.
Inequality within our societies was, to some degree, a mirror image of that.
But I do think that in the rich countries of the West, we could have just handled this so much better.
We have the resources to do so. We just went to sleep and I consider myself part of that part of that.
So I would like to state that in my defence of globalisation, written 20 years ago,
it has a whole chapter saying on the importance and possibility of sustaining and developing the welfare state.
It didn't have enough on industrial policy.
Finally, the knowledge point, I think this is unbelievably interesting and central part of that is I think about changing incentives in business.
I accept that. But actually have come to the view that our problem is not that we have too much of a technocracy and it's too powerful.
The problem of technocracy, our governmental technocracy is it's radically too weak and radically too ill qualified, and we can't get a.
We will need better regulation. We can't get away from that.
And I've followed this very, very closely in the financial sector case.
And what you have to do is you have to change the incentives for the fabs and that was done with the banking regulation big time.
It's really quite important we change their incentives really big time and started it again.
And second, you need seriously competent and aggressive regulators and there are a few areas where we do.
And but that means paying people and hiring them and and and to deal with the tech people,
they have to be really massively equipped to deal with this because end up
relying on them to give you the information on how they should be regulated.
You've had it right with great regret. I'm going to have to bring this to the end before I thank the speakers.
Can I just point out that next Thursday, the 9th,
we have the last in the series that Colin and Paul have been organising as part of the Martin School Initiative on Regional Levelling Up?
And it's a discussion with Paul and Hillary Clinton and Jason Stockard on the Grimsby Alliance community and levelling up.
I think we've been privileged this evening to sort of listen to four of the most interesting thinkers
in economics and public policy who have given us some fabulous insights in both what has gone wrong,
the challenges ahead and how hopefully we might address it.
Can I thank you for coming? And I think our virtual audience. And please join me in the round of applause.