Professor Ian Goldin: "Age of Discovery" | Talks at Google

Thank, you all for coming I'm, Hal Varian I'm the chief economist, here, at Google and we economists, like to stick together so I brought you a reinforcement. Today. Professor. Ian golden, was a founding, director of the Oxford, Martin school from September, 2006. To September, 2016, he's. Currently the Oxford University professor, of globalization. And development and, director, of the Oxford Martin program, on technological and, economic change, and he's, also a, senior, fellow at the Oxford Martin School and a professorial, fellow at the Bailey Ole College. University. Of Oxford from. 2003. To 2006, he was vice president the World Bank and prior. To that the bank's director development, policy, and. He served in the Bank senior management, team and led the bank's collaboration. With the United Nations and other partners, as well. As with key countries, as a director. Of the development, project he played a pivotal role in the research and strategy, to enter the bank there's. Much much more but. I'm going to stop at that point because, I know you're anxious to hear what ian has to say and there'll. Be questions afterwards. A little bit of a few questions for me a few, questions from the Dory and of course people. Who are here so. Thank. You very much it's a huge pleasure to, be at Google and to. Talk about my new book age of discovery in the, context. Of the, tumultuous changes. In the world and try and make sense of this, incredible, time that, we live in it's. A time kind of the first video, running it's. A time of magic. In many respects, and just spending, the last couple. Of hours here and getting a sense of. Some. Of the things and I'm sure there's many many others that I'm not aware of that are happening here when can't but feel that one, is in a period, of discovery an age, of discovery which, is unprecedented, in human history which. Will lead to changes. For. The better for. Many and many. People around the world the way I think about, this period is not as the fourth Industrial, Revolution which. I think. Diminishes. In an extent the. Way in, which is transforming, the world in the pace and scale. Of what's happening I think about it more as a Renaissance, moment, because that was a tumultuous moment. That, was a period, that took Europe. From being one of the most backward places, in the world in. 1452. By, far the most advanced, place within, an 80 year. Period, a period. That, changed, everything, in Europe. Permanently. And then, around the world and. That. Was associated with, the most extraordinary, advances. In science, in arts in perspective. That the world had, ever known it, was, driven like. Our, revolution. By. An information, revolution then. It was the Gutenberg press, before, that a, very. Small, number of people a very small share of the, European population could, read or write books were extremely, expensive handwritten. Manuscripts. And it was really the clergy, the catholic church that had monopoly of knowledge they, told people what to think how to think and of, course in that environment was impossible, to really do science.

What. This revolution, did was allowed an exponential. Growth in, information, flows rather, similar to, what we've seen in the last 20, years. Over. 25 million books were printed in a 50-year period billions. Of political, pamphlets advertisements. Short, treatises, and so on and we, celebrate, today 500. Years later the. Outcome, of that information, revolution. Of. Course the, fundamental. Transformation. Of art, of Botticelli's. Michelangelo's. Da Vinci's, that, changed perspective. In remarkable, ways and, symbolized. People. From being objects. Whose. Fate was ordained, to. Creators. Of their own fate and that was the dramatic change. That happened in the way that philosophy, and art was understood, but, it was also time of course of scientific, invention, and revolution, Copernicus, discovering. That, we went around the Sun not being the center of the universe. Fundamental. Challenges, to what the church and authority, had said. And of course. Compass. And other designs which allowed the voyages of discovery including. The, discovery of the Americas and total circumnavigation. Changing. Commerce and creating, globalization. 1.0. Disintermediating. In very rapid, ways the, old flows the, places like Venice which had been at the center of them finding. Their prices dropped by, 50% over. A two to three-year period, as, the new ways of getting, to the, east were, discovered. Our. Time is associated, with political and technical. Transformation. Which is much more global much more rapid, but. Is having I think, an echo, of that effect, the. Berlin wall for me symbolizes. This, coming down of barriers physical, barriers political. And ideological barriers. And we. Moved to a world which, was very fragmented, in the 80s to, a world now which, is hyper integrated. And this hyper integration. Brings. Very many different possibilities, and, is already I believe. An engine, of change, which. Is more rapid than at any period in history and that's. Why today's. The slowest day we'll know for the rest of our lives the. Innovation. Machine has. Been put on a higher level, than. It ever has been in history I, was. Living in Paris when, this wall came down I'm. A South African I didn't think I would ever be able to go to South Africa again, in my lifetime I was involved in the anti-apartheid, struggle I was. Working at the OECD in Paris and. I thought it was an amazing thing but I didn't imagine for a minute that it would transform, my, own life of course what we know is that two months later as a result of that process. Nelson. Mandela was, released from prison he came to Paris he asked me to be his economic adviser to go back to South Africa, and run the State Bank which I did and.

Recognising. That process, in retrospect, that things, that seemed totally unconnected. To our lives in this, new hyper. Integrated. World will. Touch them in intimate. New, ways and that's going to happen at a global sphere too, of us and so. What globalization. By which I mean integration. Flows across national borders, of goods. Services, products. But most significantly, of ideas. Means. That. We move, into, a different period. In history and this, has been accelerated, greatly by. The parallel, development. Of course of the web at, the same time as the. Ball Berlin, Wall came down and. Scientific. Discovery, exemplified. In the hubble space craft. Which. Was the beginning of a new era in. The same way as there at Renaissance, was. We. Now. 27. Years later in. A world of a. Total, integration, a new, nervous, system of the world where, we can experience. And empathize, and see things. At the other end of the world in real, time whether, it's a birthday party, celebration or, whether it's, understanding. The impact, of a climate event or war, in. This extraordinary. Exponential. Growth, we've. Lost our innocence, we. Know what, is happening everywhere in dramatic new ways and so it's no accident that we become aware of climate change we've become aware of, things. That, were simply unknown, in their depth and scale before. And with, that comes new responsibilities. New. Potential. To, unlock so, the greatest challenges, humanity's ever faced but. Also new, potential, to destabilize, we've, become a complex dynamic system, as, a global community, and that. Means that. Attribution, cause-and-effect. Understanding. What, is going to shape our future is more difficult than, at any moment, in history because, of the number of actors and participants, and the speed of evolution. Prediction. Is more difficult than, ever before. Part. Of the excitement of course is how rapidly, these, technologies. Have spread and that's again, very. Different to all previous. Revolutions. Of Technology and very different to the Renaissance, as well, so. We move from a world of only about. 200, million people sharing, the same data and information in the 80s to a world today of around 6 billion people sharing, information and, data, we. Move from a world where there were only two billion people literate, in. The late 80s, to a world of six and a half billion, literate. People today and if you believe in, that literacy, and education, capability, as a, driver, of change there. Four and a half billion, more. Drivers of change over this very short period of time I. Believe. In the random distribution of, exceptional, talent called, genius, if you want there's. A lot more mozart shakespeare's, and einstein's out there that will emerge from the streets of Sao Paulo Soweto and won by or shanghaied as well. As of course this neighborhood, that will, change our lives but it's not individuals, that bring change it's, people learning from each other it's parks it's learning. Which. Is a cooking of lots, of different ideas and often ingredients. Which, are surprising. That. Is happening in a totally different way, because. People are learning fast too there's also a lot more of us ideas. Have travelled which are leading people to live longer healthier. I D a--'s there is simple ideas like, smoking, kills you, wearing. A condom protects, you from HIV. Ideas. Like that and very. Complex, ideas like those embedded in the vaccines, cures. For cancer medicines. Going, around the world, with. This we. Have this extraordinary, most. Rapid growth in population, the world's ever learned 2 billion more people.

And. It's. That as well which, shapes our future because, as people escape, poverty and the. Most extraordinary, thing, about this period of history is that despite the increase in world's, population, of 2 billion there 300, million less. Desperately. Poor people, that's never happened, historically before, this, integration. Of the world the spread of markets, this growth of jobs of opportunities. And knowledge fundamentally. Has. Led to the most rapid reduction in poverty the world's ever known and with, that as well the, most rapid, urbanization. Process, when people come together. They. Change their lives they get the means to change their lives and their. Possibilities. Far. From the world becoming more flat it's. Becoming, much. More mountainous, meaning, place, matters, more than ever and you see that here, in. Mountain, View and, you see it in Mumbai. You see it in London you seen in other dynamic. Cities. The. Ratio, of incomes. To house prices. Is. At record high and that's because place matters, more than ever. In. This, process, we not only find. Of course. Huge. Leaps, in development and, possibility, but. Also the. Spill overs of our actions, become, more and more acute. And it's. That spillover, effect. That. Is in tension. With markets, it's, the markets, and the opportunities. Which have created these possibilities, but. Now the. Questions, are how, do we engage. With. Markets, how do we tamper. If we. Want with the signals, how do we hold back, to. Ensure that, the externalities. Were spillover, effects, of development, the, Commons challenges, don't, destroy, all, the gains. The. Unexpected. Consequences, of globalization is, not a new thing we. Know that, the voyages, of discovery that, came to the Americas. Led. To. The death of most Native, Americans. We. Know that the voyages, that went when, they went back brought. Syphilis, and other diseases, that, killed. Many. Hundreds, of thousands, of the Europeans. The. Idea, that, integration. And globalization, brings. Risk as well as opportunity. Is. One that we forget at our peril and it's. Not simply that. It. Brings that, risk but it also brings the risk of extremism, and that's one of the key lessons of the Renaissance, although. We celebrate, it for its amazingly. Rapid, advance in fact, it. Was socially. Impolitic, a disastrous. Period it, was associated with rising, extremism and. After. This flourishing of diversity, and tolerance in, a city like Florence, we, had Savonarola, an. Extremist. Monk. Deposing. The Medicis, and, basically. Creating, a religious. Republic, of extreme. Views hounding. Out diversity. Gays, Muslims. Jews, that. Had gone to the city, because. It was the place to be for, anyone. That really wanted to be at the forefront of creativity, and their. Creativity happened. Because, of the diversity. 35%. Of the population of Florence in its heyday was, foreign. This. Reaction. Was, because of the corruption of the church, you, could buy your way to heaven, with indulgences. You could pay for people to go on pilgrimages. For you as well. As the fact that the benefits, of globalization, were. Not seen by most people, the goal that came back from the new world did. Not benefit, most people nor do the spices, and other, things and of. Course the scribes were put out of work. What. You had in that process, then was a push back a fracturing. Of the church inquisitions. And religious wars that, were fought across europe and spilled. Over indeed. Into the corridors of my college banal, at Oxford, where people were killed in these religious, wars.

One. Of the most terrifying echoes, of that period today is the, hounding of science and intellectuals. The. Arrest the denunciation of. Expertise. And. Of knowledge and the, recreation. Of ideology, as and, religion. As being, what needed to guide us now, fast. Forward. We. See, the. Similar risks emerging, from globalization, two-pointer. Our, time. The. Interconnectedness. Does not only connect. Good things and the most extraordinary opportunities. But also new risks the swine-flu that, starts in Mexico cities in 160. Countries in. The, today's and the, emerging, infections, group in the Oxford Martin school which, I founded, it's a group of 350. Faculty, from across the whole University, Medicine. Sciences. Social, Sciences humanities coming. Out of their disciplines, to work on interdisciplinary problem, solving, so. Our group working on emerging, infections, finds the swine flu, spread. Exactly. Replicates, airline. Traffic, the. Super spreaders of the Goods of globalization. Are also the super spreaders, of the birds in this case, airport, hubs. Another. Key, lesson. Of that Renaissance. Period, which has a much, amplified. Echo today is. The, role of individuals. And it was seven or Ola, using. The printing press to spread ideas which. Challenged, Authority small. Groups of individuals, and that's, what we've seen today. One. Area where this has been exemplified. As. Always finances, at the frontiers, of globalization. Is in the banking system bearings. In Bank was established in. 1762. And it existed, for over 240. Years withstanding. The most extraordinary, technological. Economic. And political transformations. In the world when, one day the management, woke up and discovered. That. A kid using new technology, had, bankrupted, them nick leeson. This. Potential. At the new technologies, and this interconnectedness. Gives, to. New asymmetries. Where. Small groups or single individuals, can bring down very, very, complex, systems, the. One I worry most about is bio pathogens, for exponentially, declining prices, people, can build. Measles. Smallpox excetra put on a drone and fly it down our streets this. Potential, to cause mass havoc, is one, that, is spreading in many areas not least in the cyber sphere which, of course as the nervous system of our new world is absolutely, integral but. It's also being used by. Extremist, forces as it was in, the Renaissance, Isis, has become the largest recruiter. Of foreign fighters since. The Spanish Civil War using. Social media. So how to manage. The freedoms, and the integration, in a way that, manages, the complexity. And builds. The resilience is absolutely, key. Finance. As always, at the forefront of globalization. It has the resources to, invest in new technologies, and it's a hyper integrated. System, what. We learned from the financial system. Of course is that the best system, in the world of expert. Management. That's, financed just, think about our national, governments, the central, banks like the Fed Reserve or the Treasury in.

All Countries are the most sophisticated best. Staffed best. Paid of our, national. Institutions. And at. The global level the IMF, is similarly, so it, is in a different league to the UN agencies. And others, in its expertise, data and power, and yet. This expert, system with over 20,000. PhDs. Many, of them coming from institutions, than hell and I would. Be proud to have given students, to these, institutions. Failed. Is really a very narrow mandate, financial, stability so. Much brain power. So. Much pay, no. Wonder people say we don't trust Authority we don't trust experts, when, the most expert, of the global systems, failed. So dismal II, would. We have the politics, in the US today if there, hadn't been a financial crisis, would we have brexit would, we have rising extremism, as we've seen I think not, I think. As much, as anything what we've seen is a failure, of experts, to. Be able to anticipate and, understand, this. Complex, dynamic, system and its, operating, in many, many domains. Another. Key. Failure. Of globalization. Of this period has been as in. The Renaissance. Rising. Inequality and, the. Reason is that when things change more rapidly people, get left behind more. Quickly when, you look at the share of the top 1% in, income distribution or, wealth. Across. The OECD countries. There's, a rising, trend everywhere, most acute in the US but also significant. In many many, other countries and, so a key question, is how do we have a more inclusive system, how do we ensure that people. See globalization. As good, for them not, as something that's locking them out when. You look at the data that. People like Angus Deaton and, and. Cayce have assembled in others you see that in towns in the Midwest in the u.s. the, life expectancy. Of people is lower than their parents, their, job mobility is lower than their parents, their, unemployment, rates are higher than their parents, no. Wonder people don't believe, that the system is working for them they. Want to go back to, something which, they think will help them and this is a global, trend, where. Place and skill, matters, more than ever. So. How we create, a society, which is more inclusive and how we think about these issues really does matter not, nice to the future this will become more and more acute than it's been a pleasure to be able to talk to Helen, the people, here about this as we move to a world of automation, you, might have seen work that group, I create in the Oxford Martin school has done suggesting, that 47%, of US jobs are vulnerable to machine intelligence, over, the next 20 years and a. Higher share of countries, like China where. There's more routine and rules-based jobs. Now, these numbers are contested, and there's a big debate around, them and of course we don't know about the new jobs this is a vital discussion. But, where the jobs will be how. One will have the skills etc significantly. One of the amazing things that Google's done in, recent weeks is of course allocate, a big big. Assignment. Of money to, building, these skills and capacities. For. Developing, countries there's a particular challenge, because our model of development is that, countries, go from basic, agriculture. And raw materials, through a stage of development which. Involves, semi, skilled work routine. Rules-based, work, whether it's in manufacturing, of textiles. Or other products, or whether it's in call, centers, or whether it's in back offices, and, the. Question, is what happens if the middle runs of a development, ladder are removed. By artificial intelligence. We. Don't know the answers, to these questions but the questions we have to explore. The. Sense that the, system is evolving more rapidly. That. There's growing inequality. And growing risk is based, on real concerns, these are not imagined, the, politicians, play into these and. Are able to raise fears and suggest, I. Believe. Totally. Falsely. That. A world of higher protection. Of, keeping. Out foreigners, will. Be a better world and that we can somehow return, to. An imagined past that was no better, but they say was, the. Reason, this, is profoundly. Misguided, is because as we go forward we, will more and more have, to manage collectively. Together these. Challenges, because of the spillover effects, whether, it's examples. Like the example will be familiar with of the, North Atlantic card. Or. Whether it's the newer things. Like. Climate, change which. Is a dramatic, global. Threat. Coordination. Of an. Integrated, system becomes. More and more significant. And working. Out collective. Responses. And responsibilities. Of course. Nature, knows no price the, Rhino don't reproduce, more when their horns on worth, more what economists call inelastic.

Supply And. How. We allocate these, scarce resources, in a world where rising, incomes, gives, people the capabilities. To demand, more, and more one, answer that will not be sustainable, is, that if you have enough money you can do what. You want buy the rhino, horn or anything else, of course we also know that ecological. Systems, have natural, thresholds, it's fine if 200 million people in the world take antibiotics, but, if two billion people take them none. Of them are likely to be effective, and so how one managers, in. A world where the increasing, spill overs where, our decisions, whatever they are affect. Others and others decisions, affect us because, we connected, because, we've escaped poverty becomes. More and more significant. So, we're not simply connected we entangled, there is no optionality, in this, world there's. No wall high enough that will keep our climate, change that, will keep out a pandemic but, where it will keep out is, the. Cooperative ability. To manage and of course the technologies, and the people that will help us manage and so. How we go forward with this is. Going to be crucial I'm optimistic, because we're moving into a world where we can grow on the global, talent pool and this is different to anything, in history the, Renaissance, and the revolutions, in science and, technology of the past were, largely driven by white males out of a very small number of countries, we're, now in a world where, we can draw on the total capacity, of the, human species and that is. A greatest. Source of optimism if you believe as I, do in, the, power, that this unlocks, and that's why innovation is, accelerating. And problem-solving. Change-making, is accelerating. But. Then it's a battle of ideas it's a battle our ideas, which, needs to, engage scientists. Technologists. And all those that, believe in progress. The. Oxford Martin stem cell group is. Amongst. Many many, in the world who, are doing amazing, things that give me optimism, this is the lab technicians skin turned into a heart cell and, their. Frontiers. Of genetics. And others that can lead us all to believe that. We can live longer healthier. And, better, lives. There's. Also massive. Disruption, happening in politics, not only extremism. Is growing the, capacity, of people to recreate, as macron dead from absolutely nothing with no political, party at all, a, different. Alternative view. Is a, sign, of how easy it's becoming to. Change and to be a change maker when. Doesn't need the old authorities. As one, didn't when, the printing press was. Developed. To. Create a revolution. In ideas. And, what. We've also seen is encouraging, signals, that science does matter and get, listened to not, least in the climate agreements, and of course we need to redouble our efforts to, make sure that, they're implemented. Causes. For optimism, abound. There's. No problem, that one cannot imagine a solution for the, question, is whether we as change makers whether as we as developers, of, new capability. Or able. To amplify the goods and dampen.

The Bow the bads, to ensure that as. We go forward on this, extraordinary planet. This. Will not be as Lord, Martin Risa suggested. Possibly. Our final century but it'll be the century, that we celebrate as, we. Celebrate, the Renaissance, in. Five hundred years time thank you. Thank. You very much for that. Inspirational. Talk I should say. But. I have a question about the book I read your book and it has a very nice structure, I think people who enjoy looking. At this with a. Exploiting. Or describing. The parallels, between the Renaissance, of today and. Who did this with a colleague Chris guitarra, a doctoral. Student there is a who, is a. Historian. Of the, Renaissance, know, he's a political science, major focusing. On China today I just distracted, him and his supervisor didn't like that. Distracted. Started. By RA ended up as a as a cover for so brilliant did so much well what I was interested in is your working style okay, I've written, co-authored. Books and. Everybody. Develops their, own technique. For doing this I'm curious as to how. You did. This so Chris. Who. Quite. Remarkably, managed to get both a book and his doctorate. Within. A year of each. Other. Was. Doing his. Doctorate. At Oxford I asked. Around, for. It's not this project a previous project. For. Some professors, to recommend, their top students, we, started working together, deeply impressed by him I. Think, the most. Significant. Part of our collaboration was that we just sparked. Off each other and this goes back to this point of how, innovation, happens and, we had totally different views he's got I'm an economist. He's, a international. Relations, major, he. Worked on China made me I knew about, other places he. Our areas, of knowledge do not overlap, that much. But. We we. Challenged, each other and I think that was. Increasingly. Useful particularly as I began to respect him more and more and he became more effective at challenging me in. That, so. It. Was a great process and. It. Took a long time and it was a big worry for me because I was worried that he would drop out of his doctorate and I would be in deep trouble. If. That happened. But. He's, smart. Enough and well-managed, enough to be able to do both and the book took a long time five, years and his doctorate took a long time and this was probably one. One expression, of that but his doctor it's actually brainstein doctorate on on the Chinese middle class and he lived there for. Two years, while doing that Wow Wow, involved. With the book as well he. Would kept going back he sort of come back from his primary, research but but kept coming back to Beijing Wow. So. Let's switch, over the substance, of the book now. And. You alluded to this in your talk the issue of artificial, intelligence and jobs of course you might imagine here, at Google we're very focused on this question and and I, would say for, my reading, of the existing, literature there's no consensus. But. What would it take to create that consensus. Or what kind of research, do you think is valuable how. Could you, how. Could we understand. More what we might, encounter in the future I, I. Mean remarkably. Everything. Is changing so rapidly this, is a new field of work. You, know we were one of the first movers, in. 2013. And, not long ago in bringing out a paper, on. It and. There's been a lot of papers, since then but it's a very very recent area, one of the great challenges of course is that. We. Know a lot about what's vulnerable, but. We don't know that the vulnerability will, lead to loss, you. Can have for, example supermarket. Checkout now in any supermarket in, the world but let's say in the u.s. done.

By A machine but. You still have over a million people employed in supermarket. Checkout because. Of preferences. Because of case, of adoption, because of very subtle tasks. That these people do. And, so. Saying. There's something it can be done by machine doesn't mean it will be the, second, thing is we have zero, knowledge about new jobs or. Very close to we, very even. For the next five years they learn ten or twenty years and that. Makes it very difficult, to. To. Come to a consensus. There's. Been very, few new, jobs actually being created but they could be accelerated, so, I think what we need to do how it's one of the reasons I'm here and, it's a great pleasure to be here is we meet I think to be training. A community, of scholars and of others that think about this issue it's. A global issue most of the work has been done with the US because the data statistics, are much the, best here but. If we think it's a big issue for the US it's a much bigger issue for China or Mexico or. Many. Other countries and you. Know as we discussed, we've, got to put this together with the demographics. With the economic geography, with the regulatory environments. With all sorts of other factors. To. To, try and make sense of it so it's. A long way of saying we. Need a lot, of people working collaboratively, on, this, and coming together academics are competitive, that's good but, sort of the creatively. Competitive, I think together. Over. Lunch we, were talking, about some of these demographic. Issues of course there's this huge, impact, of China's one-child policy we, have a lot. Of population, now the workforce, is going to decline dramatically. In in. The next couple of decades and one, example you mentioned the book which I think was. Very, important was to black death now. The black death was a terrible event it killed a third of the people in Italy but. If, you were lucky enough to stay alive the. Wage way, up you're living standard way up feudalism, was under pressure, simply, because, you went from a surplus of labor really, to dramatic. Shortage of labor and if. You look at China, Japan North. Korea South, Korea. Germany. Italy. Spain, on. And on on that developed countries are going, to see declines. In the labor force outright declines and maybe, they'll, have the same beneficial. Characteristic. That we I think that's, right and what the intersection, of these the force is going to be is interesting, interestingly. Enough China's, neighbors. South. Korea Hong Kong, Taiwan. Well that's made part of China. Have. Lower fertility, rates than it does with, no one child policy so, this is this is this is not an end Germany has an even lower rate, so. This is this is absolutely the, case I, think. Real wages will double in China over the next five years or so driven, by the intersection. Of demographic, and economic forces, and then you're gonna have a I and. A. Key, question on the demographics, of course is how. Long people will work I think we will end with retirement. Will stop and then you're getting the discussion, which is a big economics, discussion, about, where's pensions, and savings and retirement money, gonna come from and what's, it gonna do but transfers. Between the elderly and the young III. Has, a major, role to play in, trying. To resolve some of these tensions and consequences. In China, the. U.s. depending, on what you do with immigration policy. Europe. And then. Africa will be very different mm-hmm, and, so I think this needs in the end to be something we look at at a country level, and. And think through in a much deeper way absolutely. If you look at Nigeria, for example, or India, these countries, are actually growing younger absolutely. Or did the developed world which is growing. Substantially. Older yeah and productivity. You know you alluded, to that productivity, is the key. If you have a smaller, labor force and you have a growing population. You know just true of many countries the only solution, the maintained number living. Standards is improvement of productivity but.

Then We come to the productivity, puzzle. Even, though we think we're producing, all sorts of great technology. And wonderful, gadgets, and services, the. Economic. Statistics. Disagree. Yeah it's I. Wish. I knew the answer maybe I'll get a Nobel Prize if I did it's. One of the toughest. Toughest. Economic questions, and you. Know Bob Gordon. Has. Opposed this and, many others saying but. Basically. We don't see, we. Argue I think you feel as well I certainly, feel that innovation is accelerating. And, yet, productivity. Is stagnating. What's going on here so, this. Is a major question, I think there's a whole series of. Reasons. For this one is measurement my. IPhone, has destroyed, the camera industry, the music industry the GPS, industry. And. A whole lot of other, manufacturing. Industries, I'm feel better off for it but. The camera manufacturers. The film. Manufacturers, the GPS manufacturers, are losing output as we get negative. Statistics. On, or something like that so one is measurement. Which. Is which, is very very imperfect, and doesn't cope with it the digital economy at all the, second, issue is, is, innovation. Being concentrating. In just a small part of the economy so, where we think innovation is great in genetics, and a I and everything else most, of the country is actually dying when things change more rapidly you have to renew your stock of, infrastructure. Of plant of everything. More rapidly and if you don't it's. Increasingly, worthless and I. Think that's happening, in a bigger and bigger share of businesses. So actually. They, are becoming less productive, more rapidly because the pace of changes, are rapid and, other issues inequality. And other issue is aging in demographics, because these productivity, numbers or aggregates for the whole economy. And. This goes back to the point I made about the. Midwest they're, big parts of the country, that are not the dynamic, cities where. Things are really moving and I, think what we need is a much more nuanced, understanding and. Then you get into question all right how do you spread the benefits of productivity more, broadly and. And, just to add to your list there are two other features which is the role of intangible, software, and design yep where all of the software for the mobile, phone and for all. The way it's. Made here in in California. The. Hardware for the most part is made abroad and splitting. Those two pieces out with respect to. Productivity. Is very very. Tricky I think. We. Have these on this the BLS, does, their best but it's still it's, still a problem and and, the related problems of course services 80%, of the GDP, and the USS services, they're, very hard to measure quality improvement, or productivity. Improvements, in that in, that area. One. Proposal. I guess, to deal with this changing. World and the potential. Of having unemployed. Labor I say, potential, because I don't think either of us believes that that's a likely outcome but. One. Proposal, has been a universal. Basic income that's. Become. Popular, in Silicon, Valley circles. What what's your view on wbi well. Just I do think there will be people. By the way unemployed. Because of the pace of change I think they're really answer and. To. Me this. Is about economic, geographies about people being locked out of the dynamic cities you have very low unemployment in, some places and very high unemployment in, other places but you can't get from, wait on those. People can't the sec can't move to, where the jobs are and that's a big issue I think ubi is, not a good idea and, I have four. Main. Objections, to it the, first is that. Unless. It's at a level, which is so high. That. It, becomes fiscally, irresponsible in. Other words it blows the budget of the government and. Particularly austerity, times, like now that's, difficult to imagine it, leads to rising, poverty and inequality in the OECD's done great work on this the simple reason is that you, remove targeted, transfers, child. Benefit, housing benefit unemployment, benefit disability, benefit, etc. And you substitute for, that a cash. Transfer, or mass transfer that everyone in the country is getting it's called universal because even the billionaire's get it and the.

Numbers Just don't add up there, poor people, and the people that need transfers. Most do. Worse, off and the OECD's showing this the second, reason I don't like it is because, all the evidence I've, seen is that when people are paid to stay home, they. Become very, depressed they, become opioid, addicts they become alcoholics. They become socially, dysfunctional and, that we do not want a society, where. Basically, paying a significant, part of our society, to stay at home. Because. People get status network income, and many, other things out of work which is vital, for their own sense of self-worth and community, the third reason I don't like it is because, I think it postpones, a much more fundamental, conversation. About, the future of work which. Is the, value we give to social, work to creative, work to caring, to. Volunteerism. To mentoring, and all of that and. The fourth reason I don't like it is because, I think the, people that are advocating. It or basically, trying. To postpone, a deeper. Debate it's, the way of sort of ticking a box in their consciousnesses, and their political agenda and saying don't, worry about all these issues, we'll. Look after you and I think that's both paternalistic. And counterproductive. Because, we need, something. Else for our societies, we need a deeper debate about and it goes back to the measurement question about, well-being. About. Status, about inclusive, globalization. Etc. It's, not affordable in the US it's, even less affordable in, you. Know a developing, country like, China or Mexico or. South Africa, if. We look. At suppose. We're right that we are seeing. A lot of innovation, and more so in the future, this, innovation, that's created, mostly, in the developed, countries. How. Will that. In to. The kind of resources, available in, the last developed countries the underdeveloped countries, is this going to be bad news for, China. I said not China but for India and Nigeria, yeah. I worry, most about Africa. A. Rapid. Population growth very young population I, don't. Understand, yet. We. Need a worker it you know love to collaborate with you what, the development ladder is what other possibilities, are the, way that our parents. And grandparents, in previous generations dealt, with these challenges, was to move mm-hmm, you, know a third, of Europe migrated, third of Sweden a third of Ireland it sort of Italy moved when they lost their jobs or there was a famine, or a war or something like that that's.

Why The u.s. is what it is because people came here particularly. Risk takers that option, is being closed out so. People are locked in their countries, now and if. They locked in a country, where, you don't see a development data some places might be lucky and have tourism, or, some other opportunity, but. The, generalizable. Model some commodities, might be come, valuable, but we know there's a resource curse I. Think. This is a really deep question that we. Need to think about India. Is so big and diverse and it's growing quickly it hopefully, will get over its hump before. The major effects, but I think there's some places like Africa, which. Where it's difficult for me today to see, how this will be better, of course many. Things are beneficially in AI health. Banking. And all that I'm talking about the fundamental, questions of jobs, so. One of the I'm. Going shift to the Dory questions, here one of the popular. Prescriptions, for economic, hardship, nowadays, is, to reverse project, progress to stop globalization. To limit free trade bring, jobs back home, why. Haven't, we come up with a more progressive competing. Solution. To that narrative I think, we urgently do, I think there are we, haven't won the arguments, you, know micron was interesting, in the in the in the French, presidential, elections as far as I know is the only global. Big. Leader that. Has come up he said no we won in Francis, is not globalization. Is not a good word you, know but he said I'm preggers belies Asian I'm Pro you. Brussels, I'm Pro all these things that everyone else was saying we're bad and he, won by a landslide, yeah. Which. Was sort of not predictable, I think it was, made with Google Analytics it wasn't but I certainly didn't predict it and so. I think you can come up with a compelling narrative, but. You, know but it's it's a renege. Narrative, that we hear certainly from people like Jeremy Corbyn in the UK and many others, which is backward-looking. In. That and I think you. Know I hope there's. A generation, of younger leaders this woman that's just won the election in in New Zealand just, syndra I know. 37. Years old. Just. Completely, overwhelming. The old Labor Party there those. Are the signs of real hope for me well. It is amazing and particularly macro and not only managed, to push the globalization. Ideas. For but the labor liberalisation. Which, is stymied, French up the leaders for what right Matt 20 years 15, years and every. Economist. Who looked at the situation France, or Italy or spades and you, have to liberalize your labour markets, but it's. Extremely, difficult to do he's, managed to make progress in that area so, I think it does point to the fact that you know with, these information technologies. You can reach people directly. You don't need big. Parties, and big machines it's. Different I think in. The u.s. because the Congressional incentive system you need the Machine and UK, we have constituency. Politics, the great thing going in France is proportional, representation, yeah, which, allows a much more direct relationship between, a candidate, and people. The. Difficulty, in the u.s.. Electoral. System is it, lasts so long I, mean it's going on and on and now people are already doing 2018. And 2020. And money money and money, the. Billions yes, and actually, there's next question you mentioned the flow of goods services products, and ideas but. You did not mention the flow of people I think you did you, said yeah are you, like. If people, who checked. Me out will see that I wrote a book called exceptional. People how migration, shaped, our world and will, define our future at Princeton University Press. Published. Absolutely. People. Are absolutely central to this and and, one of the great a symmetries, in globalization now, is that that fundamental. Flow is being locked down yeah. Yes. Yes. Let. Me ask a question about, climate change that's also come up I know you did mention that in the book there is a some, discussion, of it and in your talk here, do, we have time to avert a catastrophe or, do we have to start planning ahead well one. Suggestion. I've heard is really. Good to invest in companies that build dikes yeah, yeah. Being near this never see a lot of dynamic, cities on the coast I think the answer is both.

We. They're. Ready our catastrophes. I you know Al Gore spoke at zeitgeist yesterday. And as always, he was absolutely convincing, and passionate, about it. And you, know he, linked, the, Houston. Hurricane. And. A lot of recent events what's been happening and not far from here in Northern California, the, evidence, is mounting that these things are already. The result of climate, change and just the heat that I experienced in Palo Alto today, you, know these are we every day you have a new record. So. It's happening it dramatically, impacts, particularly, on poor people, you, know being, in Phoenix yesterday, at, zeitgeist, that's. Sort of a desert you know but if you're wealthy enough you pump water from far enough you turn the air con enough you can live in the desert right but for most people in the planet that is not an option and. So. It will exacerbate, inequality. It. Will be particularly, devastating for, coastal cities and. A lot of the most dynamic places in emerging markets, are dynamic, or coastal, and of course here too and. We. Need to act more urgently, so both we we, need to make, our societies, much more resilient we need to focus on what we can do in. All dimensions. Particularly. In agriculture, and energy etc. We have to stop carbon emission we basically have to go to zero carbon, within the next 20, years, that's dramatic it's a revolution, you know we've never achieved the sort of thing economically, before. It's, a total revolution. It won't happen through market signals alone, it'll be helped by the energy, and technology. Revolutions, that we're seeing but, it's gonna require, decisive. Action a lot. Of assets a lot of companies, have to be revalued, stranded, assets is a real thing you know you don't want to be investor, pricing. Assets, in the Arctic. Etc. So, I, think, we need to do much more and you know I find, it a tragedy in the u.s. what's. Been happening in terms withdrawal two pieces of good news one, is that, actually the withdrawal period is that is after, the next, presidential. Election. In. The US and secondly. There, are states businesses. Like your own are. Doing, will. They really account for much of the movement in the u.s. despite the, federal government, not. Being as committed as it was to this so I don't think one should give up in the US at all. I'll. Show a question back there. I. Would, like to hear thoughts around in coming in. In communica equality, and drawing. Any parallels, from Rihanna's, age, was. There a same Poland at that time and how was it addressed thank. You. The. Data, is is I think pretty clear it's not just income inequality, but health inequality. Inequality generally. Is. Rising, and I think I gave the reasons for that in. General. Terms it's. Very important, to distinct to two thing that why we care about it why does it matter you know do we care about how many Ferraris we, see on our street would, we care about how many beggars we see on our street and is there some or people starving, and is there a connection is the key question in my mind, China. Has expense very rapidly, rising, inequality from a very flat pace and, I don't think it's a problem for China because, very, few people are going backwards and. Even. The poorest people are, experiencing. Significant. Rises, in income, and in the quality of their lives and health care and a life expectancy and so on where it becomes an issue, is when some party's, benefiting, hugely and. Others are falling back and that's, what's happening to people in some Midwest towns in the US and parts. Of the north of England parts, of the countryside in France and in other places and that's what explains rising, extremism the, Renaissance, echo is this tension between relative. And absolute. And. Also, whether it's seen that, it's, ill-gotten. Gains, or not do, the people that are becoming very wealthy deserve what, they've got and what people, resented, deeply, and what the whole extremist.

Movements, In the Renaissance, played on was, that it was unfair. These. People captured, the benefits, of, it and didn't share them and this, concept, of fairness and ethics, of it and whether, people are being seen to pay tax and give, back becomes. Important, Medici. Was, tolerated. Because he was such a patron, and supported, people but then when. Extremism, became, great, and when was seen as increasingly corrupt, he, was not tolerated anymore, and it. Was that that shifted, and. Of course it was the Information Age that allowed people to observe as the transparency, knows now what, was happening and. That the, information was locked down before, that by the church and by the Royal by the princes, then. He suddenly became available so information, knowing about inequality. And the reason, for it becomes fundamental. Absolutely. Right and I think when you look at, attitudes. Towards inequality, you survey, people they, don't mind that athletes, make so much or celebrity. Absolutely, war entrepreneurs. Bankers. That's. A different story yet lately I think, we'll make this the last question. Thank. You for speak speak, to us today I had a question about the investment, divestment. In South Africa, is, generally. Seen as successful whereas. The divestment around fossil fuels has been a lot of conversation, whether it actually is, something, that's going to help us move forward to zero carbon emissions or, not and especially. And here Google there has been talk about whether. We should be moving forward and divesting. From fossil fuels within the things that we invest, in how, do you see this parallel, with divestment. In South Africa. And compressing, it investment in fossil, fuels yeah, very good question, I was absolutely. Committed. To this investment, from South Africa I thought it was a good thing and I think that together with sanctions and many other things did accelerate, the transformation of, South Africa I've no doubt in my mind that, and made the transition better, and quicker, because. Of that I. Also. Believe that there should be very. Carefully. Thought through divestment. From fossil fuels, there should be an understanding that. Investors, are taking risk when they invest in strata and assets so it's an investment decision. Particularly. For pension funds and long term investors, about whether these assets, are really what they think they are. But. It's a broader one it's about political signaling. So. I don't, believe for example, my own personal, view is that there's some oil, majors who are the, biggest investors, in renewable energy in the world I, think. We should not be divert, discouraging. Them from that we, should be in the shareholder, meetings encouraging, to make a more rapid transformation. But. We should be in there on the other hand there are people who are mainly doing things and are not transforming, and we should be discouraging, them so it's a in a way it's, a it's about how you incentivize.

People To do the right thing. And absolutely. Penalize, those that are not doing enough of the right thing so, it's a gradation, and of, course that's difficult politically, it's difficult to campaign. And say you know don't, invest. In this company invest, in that one but that's what we should be we should also understand, that this is global and consumers. Have increasing. Powers you don't want to simply divest, from a democratically, accountable company. To, have that asset mined, or, produced. By, a company. Run. Out of Russia or some, other country just. By the assets. Cheap and do the same thing so, consumers. Need to talk through that we should be targeting. Through divestment. Also, the. Companies, that are not making the transformation, for example to electric vehicles. Who. Are lying about. The content, of their, products, and also. Thinking deeply about some of the things which are very difficult like steel and cement which. Have a very very high carbon. So cradle-to-grave, analysis. And this is where data analytics, and a company like Google can help so much these, things really matter consumer. Awareness and then action around it but I I'm very proud that oxfords divested. It. Was a hard, discussion, in Oxford, I'm also, absolutely, convinced, that we will not lose any returns, as a result of it just, like people used to make the argument, around tobacco. Etc. I've looked at the data deeply, I'm on the investment, committee of my college and other investment, committees and there's, no premium. That you have to pay by doing the right thing and so we need to do the right thing, ok, well that no thank you again for coming. You.

2018-05-10 06:51

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