A world-view from three very different economists
15 January 2021
We often turn to economists to make sense of the present and predict the future. But they don’t all sing from the same hymn sheet. Each one takes the facts before them and adds their experience, their insight and their understanding to create their own vision of how things could be. Some offer reassurance, some issue warnings. All offer a view.
The Change Makers podcast had the privilege in the autumn of sitting down with three brilliant and ultimately, very different economists – each sharing their thoughts on the shape of our world and the changes they believe we should see: interviews not only about what they believe, but why they believe it.
Here’s what they had to say…
The creative economist – Lord Jim O’Neill
“Profit with purpose brings a new definition to value”
Having coined the term “BRIC” in the months following 9/11, Lord Jim O’Neill believes how we respond to a crisis can be the making of a leader or country. “Within days of a horrific event, my mind starting to wonder whether there was some underlying deeper message to the world – some parts of the world were sick of Americanization – which started the whole idea of the BRICS and changed my professional career forever.”
Now he believes the response to the Covid-19 crisis by companies offers hope for the future, especially with regards to climate change. “The pharmaceutical response by the likes of AstraZeneca and Pfizer – particularly their cooperation with each other and the way they have priced the vaccines – gives me optimism about the future. The speed at which these guys have done what they have done – the more I reflect on it I think it could be a game-changer.”
Beyond the Covid crisis, O’Neill sees plenty to be hopeful about, as companies respond to external shocks and global challenges.
“Look at other sectors – we now have solar power businesses in the States worth more than ExxonMobil, and in the auto sector, Tesla is worth more than competitors by a considerable distance. The markets are showing a persuasive sign that if you come up with a commercially successful initiative to help beat climate change, the markets reward you very quickly.”
The eternal optimist – Dr Pippa Malmgren
“A new world will need new definitions”
As an American policy analyst, Malmgren served as Special Assistant to President George W Bush. In the wake of the Trump administration, she sees the blurring of lines between politics, media and entertainment as a trend set to continue.
“I’m very worried about how we’re caught up in a cycle, confusing entertainment with politics. I have a new prediction, that Trump is going to launch a media platform and it’s going to be Fox News on steroids.” She believes we will continue to see a push for non-establishment characters in Washington. “The public wants an outsider, that includes people from the business community and that trend is accelerating.”
Beyond the changing tastes in politics, Pippa is optimistic about the recovery from the current Covid crisis – putting her faith in the markets and innovation. “Overall there will be a better economic picture, for three reasons. Number one – there is a record amount of money in the world economy. Two – there is an unbelievable wave of entrepreneurial energy as people lose their jobs and businesses, they create new things and I see many signs of that. Thirdly – digitization that should have taken a decade has been collapsed into three months and the productivity gains are massive. Those three combined lead me to think we’ll see recovery faster and sooner than feared.”
But she believes we’ll need a new language to define the economics of the future. “We should stop trying to place ourselves on the existing spectrum – every single thing is up for discussion now as our environment is shaped. We’re going to need a new language because old words are charged and loaded and we can’t break through to better outcomes without literally coming up with new words.”
The Libertarian Marxist – Yanis Varoufakis
“We’re living under techno-feudalism”
Having led the negotiations with Greece’s creditors during the country’s sovereign debt crisis, the former finance minister went on to create a political party MeRA25, re-entering Parliament in 2019 and launched Progressive International – an organisation aiming to unite progressive left-wing activists and aims for a post-capitalist society. In December 2020, Progressive International launched a campaign called Make Amazon Pay.
“I don’t have anything against Jeff Bezos,” explains Varoufakis. “He’s a smart man and he deserves to be rich. But his billions are a sign that we don’t live in capitalism – we live in something closer to feudalism – I call it techno feudalism.”
Amazon, Facebook, Google and the other tech titans are monopolists who usurp competitive forces, he argues. “They own everything. The moment you enter, say Facebook, you enter a world owned by Facebook – everything belongs to that one company.
“Given the despicable conditions in which Amazon employees work, the ridiculous manner in which wealth accumulates whole small businesses are destroyed and the immense environmental footprint created by a company presenting itself a “green,” – we decided it was a good idea to start targeting Amazon.”
Yanis spoke eloquently about his left-wing beliefs, but was also clear that he sees failings in both the economics of the left, and of the right. He hoped that by learning from these mistakes, we might be able to find a better way forward.
“The optimist believes the markets always work and they got their comeuppance with the 2008 collapse of the financial sector. Empiricists believe in technology and statistics but that has crashed and burned. I also represent a form of failure because the left ended up with the Gulag and the defeat of social democracy. But out of this combination, this thesis of defeat, humanity may be able to produce a success – and we have to because we are facing serious challenges like climate change.”