1 00:00:10,960 --> 00:00:14,360 Speaker 1: Hello, and welcome to another episode of the Odd Thoughts podcast. 2 00:00:14,480 --> 00:00:19,560 Speaker 1: I'm Tracy Alloway and I'm Joe. Wisn't so, Joe? I 3 00:00:19,600 --> 00:00:22,040 Speaker 1: think at this point one of the themes that has 4 00:00:22,120 --> 00:00:26,160 Speaker 1: been emerging from is the idea that we are seeing 5 00:00:26,160 --> 00:00:34,040 Speaker 1: a number of trends that we're already underway really accelerate. Yeah. 6 00:00:34,560 --> 00:00:38,839 Speaker 1: And one of those trends is something that again we 7 00:00:38,920 --> 00:00:41,239 Speaker 1: saw even before this year, and I would say we 8 00:00:41,280 --> 00:00:44,519 Speaker 1: really saw it come into play after the Financial crisis. 9 00:00:44,880 --> 00:00:50,040 Speaker 1: It's the idea that the economics profession, or the study 10 00:00:50,080 --> 00:00:54,760 Speaker 1: of economics, the field of economics is missing something fundamental 11 00:00:55,080 --> 00:00:59,240 Speaker 1: or perhaps could be applied in a different way to, 12 00:00:59,720 --> 00:01:05,440 Speaker 1: I guess, achieve a better outcome for human well being. 13 00:01:05,560 --> 00:01:08,320 Speaker 1: Is that a good way of putting it? Go further? 14 00:01:08,840 --> 00:01:13,399 Speaker 1: I mean, yes, but go further? Um. Well, so, I 15 00:01:13,440 --> 00:01:15,640 Speaker 1: think in the aftermath of the financial crisis, there was 16 00:01:15,680 --> 00:01:18,800 Speaker 1: a lot of criticism trained on economists that not only 17 00:01:18,959 --> 00:01:22,760 Speaker 1: had they missed this massive imbalance that ended up nearly 18 00:01:23,000 --> 00:01:27,000 Speaker 1: taking down the financial system, but also that economics had 19 00:01:27,080 --> 00:01:31,080 Speaker 1: somehow lost its way in its actual purpose. If you 20 00:01:31,080 --> 00:01:34,880 Speaker 1: think about economics as the sort of studies of resource 21 00:01:34,920 --> 00:01:38,679 Speaker 1: allocation and the decisions that go into making them. The 22 00:01:38,840 --> 00:01:43,120 Speaker 1: ultimate goal should probably be making people better off than 23 00:01:43,160 --> 00:01:45,880 Speaker 1: they would be otherwise. And I think there was a 24 00:01:45,880 --> 00:01:49,160 Speaker 1: sense that economists and their sort of white tower in 25 00:01:49,240 --> 00:01:54,480 Speaker 1: their academic bubble had forgotten that aspect of it, or 26 00:01:54,520 --> 00:01:57,280 Speaker 1: at least had hadn't paid as much attention to it 27 00:01:57,440 --> 00:01:59,800 Speaker 1: um as they should have. I think it's right. I mean, 28 00:01:59,840 --> 00:02:03,000 Speaker 1: I think like if you look at now, especially with 29 00:02:03,080 --> 00:02:06,120 Speaker 1: this crisis, first ten years ago, there's a lot more 30 00:02:06,160 --> 00:02:08,560 Speaker 1: focus on like exactly what you say, what is the 31 00:02:08,639 --> 00:02:12,720 Speaker 1: purpose of economics, and what problems are people really trying 32 00:02:12,760 --> 00:02:15,600 Speaker 1: to solve? And I think that like before the Great 33 00:02:15,600 --> 00:02:18,840 Speaker 1: Financial Crisis and the aftermath of the Great Financial Crisis, 34 00:02:19,040 --> 00:02:21,240 Speaker 1: there was a lot of focus on the beautiful, the 35 00:02:21,240 --> 00:02:25,920 Speaker 1: beauty of models and getting everything into bulibrium and optimal 36 00:02:26,040 --> 00:02:28,680 Speaker 1: balance and all this stuff, and I don't know, but 37 00:02:29,480 --> 00:02:32,200 Speaker 1: sort of forgetting it's like, no, the point is human 38 00:02:32,200 --> 00:02:36,280 Speaker 1: well being and improving the sort of situation for humans. 39 00:02:36,600 --> 00:02:38,680 Speaker 1: And I think, I don't know, I feel like probably 40 00:02:38,720 --> 00:02:41,840 Speaker 1: always economists would recognize that that was the goal, but 41 00:02:41,919 --> 00:02:45,080 Speaker 1: it got obscured. And I think like that you see 42 00:02:45,200 --> 00:02:47,560 Speaker 1: the difference now and this sort of more clear focus 43 00:02:47,600 --> 00:02:50,880 Speaker 1: on that when people say no, just just giving people money, 44 00:02:50,960 --> 00:02:53,520 Speaker 1: And I think that like, that's part of this idea, 45 00:02:53,639 --> 00:02:55,840 Speaker 1: Like it a lot of the solutions that get bandied 46 00:02:55,840 --> 00:02:59,040 Speaker 1: about now in post COVID times or in the middle 47 00:02:59,040 --> 00:03:02,120 Speaker 1: of COVID is like just give out more money. And 48 00:03:02,200 --> 00:03:04,480 Speaker 1: I think part of the reason that some of these 49 00:03:04,520 --> 00:03:08,080 Speaker 1: ideas have become more game, more currency is because of 50 00:03:08,160 --> 00:03:13,680 Speaker 1: this increased clarity of what other problems we're trying to solve. Yeah. Absolutely, 51 00:03:13,720 --> 00:03:16,360 Speaker 1: and I think your mention of the models there is 52 00:03:16,440 --> 00:03:20,320 Speaker 1: absolutely correct. There was this idea that an economic or 53 00:03:20,360 --> 00:03:23,720 Speaker 1: an economy imbalance was a goal in and of itself, 54 00:03:23,720 --> 00:03:26,639 Speaker 1: but people kind of forgot the reason they were targeting that, 55 00:03:26,720 --> 00:03:32,760 Speaker 1: which was eventually to um create better conditions for their citizens. 56 00:03:32,800 --> 00:03:37,040 Speaker 1: So all right, so today we're going to be talking about, 57 00:03:37,680 --> 00:03:42,040 Speaker 1: I guess, the more lofty ideals of the economic profession, 58 00:03:42,560 --> 00:03:44,600 Speaker 1: but we're going to be doing it with someone who 59 00:03:44,680 --> 00:03:48,320 Speaker 1: was actually writing and thinking about this again even before 60 00:03:48,800 --> 00:03:51,760 Speaker 1: twenty way back in two thousand eleven. We're going to 61 00:03:51,840 --> 00:03:55,760 Speaker 1: be talking to Paul Donovan. He's the chief economist at 62 00:03:55,840 --> 00:03:59,800 Speaker 1: UBS Global Wealth Management, and he wrote a book that 63 00:04:00,040 --> 00:04:04,200 Speaker 1: came out in November called Profit and Prejudice The luod 64 00:04:04,240 --> 00:04:08,280 Speaker 1: out of the Fourth Industrial Revolution. And I should just 65 00:04:08,320 --> 00:04:11,920 Speaker 1: mention that this book was written in a personal capacity 66 00:04:11,920 --> 00:04:16,960 Speaker 1: by Paul, but with the full support of his employer UBS. 67 00:04:17,040 --> 00:04:20,800 Speaker 1: It's a really interesting read and it gets to some 68 00:04:20,920 --> 00:04:23,440 Speaker 1: of the topics we just mentioned in the intro. So, 69 00:04:23,760 --> 00:04:26,559 Speaker 1: without further ado, why don't we bring on Paul. Paul, 70 00:04:26,720 --> 00:04:28,840 Speaker 1: it's great to have you, thanks for a hart for 71 00:04:28,839 --> 00:04:32,320 Speaker 1: having me on. So I guess the clue is in 72 00:04:32,360 --> 00:04:36,040 Speaker 1: the title here, right, But Profit and Prejudice there's an 73 00:04:36,040 --> 00:04:41,880 Speaker 1: intimation there that prejudice has some sort of impact on profits. 74 00:04:42,000 --> 00:04:45,280 Speaker 1: Why don't you go ahead and tell us your your 75 00:04:45,400 --> 00:04:48,960 Speaker 1: thesis on on what that actually is. Well, I'd love 76 00:04:48,960 --> 00:04:50,840 Speaker 1: to say credit for the thesis, but I mean this, 77 00:04:50,839 --> 00:04:53,839 Speaker 1: this comes out of Gary Becker's work in the fifties 78 00:04:53,960 --> 00:04:58,960 Speaker 1: and countless economists since then. Basically, prejudice is bad for 79 00:04:59,120 --> 00:05:01,440 Speaker 1: profit at a at the corporate sense, and it's bad 80 00:05:01,560 --> 00:05:06,919 Speaker 1: for economic well being in a in a macro economic sense. Essentially, 81 00:05:07,440 --> 00:05:11,880 Speaker 1: the whole point about allocating your resources efficiently and getting 82 00:05:11,880 --> 00:05:14,599 Speaker 1: everything working is you need the right person in the 83 00:05:14,720 --> 00:05:18,880 Speaker 1: right job at the right time. That's it. Now, prejudice 84 00:05:19,880 --> 00:05:26,320 Speaker 1: is irrational discrimination where you are rejecting a person not 85 00:05:26,400 --> 00:05:29,680 Speaker 1: on rational grounds, not on reasonable grounds, but because you 86 00:05:29,720 --> 00:05:32,600 Speaker 1: don't like their race, or their sexuality, or their gender, 87 00:05:32,800 --> 00:05:35,479 Speaker 1: or their hair color or whatever it is, doesn't matter 88 00:05:35,880 --> 00:05:41,159 Speaker 1: if it's irrational, you're rejecting somebody from the possibility that 89 00:05:41,240 --> 00:05:43,440 Speaker 1: they could work for you, and that then gives you 90 00:05:43,480 --> 00:05:46,080 Speaker 1: a situation where you're not employing the right person in 91 00:05:46,120 --> 00:05:51,160 Speaker 1: the right job, and that is enormously destructive, particularly so 92 00:05:52,040 --> 00:05:55,480 Speaker 1: as we are going through the upheaval and the changes 93 00:05:55,560 --> 00:05:59,360 Speaker 1: of the Fourth Industrial Revolution, because it becomes even more 94 00:05:59,480 --> 00:06:03,159 Speaker 1: important to get the right people in place in order 95 00:06:03,200 --> 00:06:08,440 Speaker 1: to maximize profits and gains at the moment. Still explain 96 00:06:08,560 --> 00:06:12,240 Speaker 1: that last part. What is the connection between the sort 97 00:06:12,240 --> 00:06:17,520 Speaker 1: of economically corrosive aspect of prejudice and why it's particularly 98 00:06:17,520 --> 00:06:21,520 Speaker 1: pronounced after in the week of the Fourth Industrial Revolution? 99 00:06:21,560 --> 00:06:23,240 Speaker 1: And while we're talking about that, what is the Fourth 100 00:06:23,279 --> 00:06:28,520 Speaker 1: Industrial Revolution? So the Fourth Industry Revolution is the latest 101 00:06:28,560 --> 00:06:34,440 Speaker 1: period of economic upheaval. So this is about artificial intelligence, robotics, automation, 102 00:06:34,560 --> 00:06:38,680 Speaker 1: the Internet of things, changes in communication, all of that. Now, 103 00:06:38,720 --> 00:06:41,640 Speaker 1: the point about a revolution, not to state the blindingly obvious, 104 00:06:41,760 --> 00:06:46,719 Speaker 1: is its revolutionary. So actually it's not the technology that matters. 105 00:06:46,520 --> 00:06:49,920 Speaker 1: It's it's how we use the technology, and that has 106 00:06:50,000 --> 00:06:54,920 Speaker 1: the power to change society, to change how we work, 107 00:06:54,960 --> 00:06:57,719 Speaker 1: where we work, how we live, what we consume. All 108 00:06:57,760 --> 00:07:02,039 Speaker 1: of these things change through application of technology. That's the 109 00:07:02,040 --> 00:07:08,840 Speaker 1: critical thing, the application. So it becomes critically important in 110 00:07:08,880 --> 00:07:11,400 Speaker 1: this period of upheaval and success that you apply the 111 00:07:11,480 --> 00:07:15,760 Speaker 1: technology appropriately and how do you apply technology appropriately? Or 112 00:07:15,800 --> 00:07:18,360 Speaker 1: that's coming down to good old people because they're the 113 00:07:18,400 --> 00:07:21,480 Speaker 1: ones who are using the thing. And so that's why 114 00:07:21,560 --> 00:07:23,800 Speaker 1: the getting the right person the right job is so 115 00:07:23,800 --> 00:07:28,840 Speaker 1: so absolutely critical. But there's a fatal flaw in any 116 00:07:28,920 --> 00:07:34,280 Speaker 1: period of structural upheaval is that the uncertainty, the shifting 117 00:07:34,880 --> 00:07:40,520 Speaker 1: social positions that an industrial revolution creates also tend to 118 00:07:40,640 --> 00:07:44,920 Speaker 1: encourage more prejudice. So the Fourth Industrial Revolution as the 119 00:07:44,960 --> 00:07:49,880 Speaker 1: seeds of its own destruction within the changes that it's bringing. 120 00:07:50,760 --> 00:07:55,800 Speaker 1: M Are there previous Well, obviously there are previous industrial revolutions, 121 00:07:55,800 --> 00:08:00,000 Speaker 1: But are there any that engendered the type of prejudice 122 00:08:00,160 --> 00:08:04,160 Speaker 1: or you know, parallel prejudices to what we might be 123 00:08:04,240 --> 00:08:08,760 Speaker 1: seeing now that that we can kind of learn from. Yes, 124 00:08:08,840 --> 00:08:12,320 Speaker 1: So I mean basically all three previous industrial revolutions went 125 00:08:12,360 --> 00:08:17,120 Speaker 1: through periods of prejudice. So the First Industrial Revolution you 126 00:08:17,240 --> 00:08:23,480 Speaker 1: saw the introduction of factory systems mechanization in the UK 127 00:08:23,880 --> 00:08:27,800 Speaker 1: in the mid and late eighteenth century, and that led 128 00:08:27,840 --> 00:08:29,640 Speaker 1: to the Luddites who were who were going around and 129 00:08:29,840 --> 00:08:32,760 Speaker 1: smashing up the equipment because the equipment was destroying their jobs. 130 00:08:33,080 --> 00:08:36,439 Speaker 1: But it wasn't just equipment that was being destroyed. You 131 00:08:36,920 --> 00:08:42,080 Speaker 1: were attacking Catholics. You were attacking Methodists because they were different. 132 00:08:42,640 --> 00:08:44,360 Speaker 1: And if you've lost your job, and if you've lost 133 00:08:44,400 --> 00:08:48,280 Speaker 1: your social status, you couldn't really understand why you've lost 134 00:08:48,280 --> 00:08:50,559 Speaker 1: your job in social status, because it was the complex 135 00:08:50,559 --> 00:08:53,119 Speaker 1: forces of the universe that had led to this situation 136 00:08:53,240 --> 00:08:55,120 Speaker 1: as not as you were concerned. You were doing your 137 00:08:55,200 --> 00:08:57,280 Speaker 1: job as well as you've always done it, and you 138 00:08:57,280 --> 00:08:59,200 Speaker 1: know as efficient these have always done it, So why 139 00:08:59,280 --> 00:09:02,080 Speaker 1: were you losing it? And so you you search around 140 00:09:02,120 --> 00:09:05,800 Speaker 1: for this simple solution the scapegoat economics and it's well, 141 00:09:05,800 --> 00:09:08,080 Speaker 1: there's a group and they seem to be doing quite well. 142 00:09:08,160 --> 00:09:09,680 Speaker 1: It must be their fault. So it's all the fault 143 00:09:09,679 --> 00:09:11,600 Speaker 1: of the Methodist. It's it's all the fault of the Catholics. 144 00:09:11,640 --> 00:09:14,600 Speaker 1: They're the ones who've cost me my job. Um. And 145 00:09:14,640 --> 00:09:18,360 Speaker 1: then in the Second Industrial Revolution we see exactly the 146 00:09:18,400 --> 00:09:21,080 Speaker 1: same thing. And I talked in the book about my 147 00:09:21,080 --> 00:09:24,959 Speaker 1: own family history. My family were dock workers in East 148 00:09:25,000 --> 00:09:28,640 Speaker 1: London in the nineteen twenties and nineteen thirties, and of 149 00:09:28,679 --> 00:09:34,239 Speaker 1: course the chaos and disruption of the Second Industrial Revolution 150 00:09:34,960 --> 00:09:37,640 Speaker 1: cause them to lose their jobs of cause to be 151 00:09:37,679 --> 00:09:41,160 Speaker 1: part of the mass unemployment, and some of my family 152 00:09:41,240 --> 00:09:45,600 Speaker 1: appeared to turn to fascism because they were being told no, no, no, 153 00:09:45,679 --> 00:09:47,960 Speaker 1: it's not your fault. Everything is the fault of the 154 00:09:48,040 --> 00:09:51,000 Speaker 1: of the Jewish immigrants. And you know, they are the 155 00:09:51,000 --> 00:09:53,360 Speaker 1: ones that have cost you your job. You're great, They're 156 00:09:53,360 --> 00:09:55,000 Speaker 1: the ones that have taken your double away from you. 157 00:09:55,360 --> 00:09:58,679 Speaker 1: This is the black shirt movement in the UK. Is 158 00:09:58,720 --> 00:10:01,559 Speaker 1: that right? It is? Which you know a lot of 159 00:10:01,640 --> 00:10:04,200 Speaker 1: people tend to see the black shirt movements as being 160 00:10:04,600 --> 00:10:07,440 Speaker 1: you know, some some middle class movement. It wasn't. It 161 00:10:07,480 --> 00:10:10,120 Speaker 1: was working class and it was deeply rooted in the 162 00:10:10,160 --> 00:10:12,800 Speaker 1: East End of London because this was the area where 163 00:10:12,840 --> 00:10:16,240 Speaker 1: people were losing their jobs and couldn't understand why it 164 00:10:16,280 --> 00:10:20,880 Speaker 1: was happening. And it was very reassuring to be told no, no, no, 165 00:10:21,160 --> 00:10:24,040 Speaker 1: you're better than they are, and they've somehow stolen your 166 00:10:24,080 --> 00:10:27,600 Speaker 1: job from you. It's not just the the the desired 167 00:10:27,600 --> 00:10:29,360 Speaker 1: to have a skategoat's also the desire to be told 168 00:10:29,360 --> 00:10:33,400 Speaker 1: you're better. And and we've got a simple solution which 169 00:10:33,440 --> 00:10:36,160 Speaker 1: if we follow, if we ban immigration or whatever it is, 170 00:10:36,360 --> 00:10:41,079 Speaker 1: we will go back to this wonderful golden era where 171 00:10:41,080 --> 00:10:43,760 Speaker 1: everyone is happy. It's all complete nonsense, of course, but 172 00:10:44,080 --> 00:10:46,480 Speaker 1: you can see why. It's a compelling story in the 173 00:10:46,559 --> 00:10:50,600 Speaker 1: chaos of change, and as recently as the nine seventies, 174 00:10:50,600 --> 00:10:53,640 Speaker 1: the til end of the Third Industrial Revolution, which is 175 00:10:53,640 --> 00:10:56,679 Speaker 1: all about computers and technology. I mean, if you go 176 00:10:56,800 --> 00:11:02,680 Speaker 1: back and look at advertise newspapers from that time, Yeah, 177 00:11:03,400 --> 00:11:05,960 Speaker 1: a lot of the blame them was on women. Women 178 00:11:06,000 --> 00:11:08,960 Speaker 1: are daring to work and they're costing men jobs, and 179 00:11:09,040 --> 00:11:11,720 Speaker 1: therefore we just need to stop women working and everything 180 00:11:11,720 --> 00:11:15,679 Speaker 1: will be wonderful again. And I mean, it's just this remarkable, bizarre, 181 00:11:16,240 --> 00:11:20,040 Speaker 1: but obviously very simple narrative. And it's that simplicity which 182 00:11:20,080 --> 00:11:40,760 Speaker 1: is so appealing and so dangerous. So this gets too 183 00:11:40,960 --> 00:11:43,880 Speaker 1: I think a question about you know you mentioned in 184 00:11:43,920 --> 00:11:46,480 Speaker 1: the beginning of this idea of irrationality, and in the 185 00:11:46,600 --> 00:11:53,559 Speaker 1: current age, prejudice, racism, other forms of discrimination extremely costly 186 00:11:53,600 --> 00:11:57,000 Speaker 1: from an economic standpoint, extreme cost of this sort of 187 00:11:57,240 --> 00:12:02,200 Speaker 1: irrational choices. Where does the rationality lie, however, I mean 188 00:12:02,280 --> 00:12:05,400 Speaker 1: you talk about these sort of past periods like say 189 00:12:05,640 --> 00:12:10,760 Speaker 1: the light out opposing increased mechanization and so forth. Were 190 00:12:10,840 --> 00:12:16,839 Speaker 1: they being irrational given the information at hand, or does 191 00:12:16,880 --> 00:12:21,760 Speaker 1: the irrationality precede them in some other sort of meta matter. 192 00:12:21,960 --> 00:12:25,360 Speaker 1: I mean, they can't see the big picture. So I 193 00:12:25,360 --> 00:12:27,840 Speaker 1: think it's definitely the letter that you you're you're getting 194 00:12:27,920 --> 00:12:32,160 Speaker 1: fake news. And this was I mean a whole lot 195 00:12:32,240 --> 00:12:35,680 Speaker 1: like movement, um. I mean, the UK had had plenty 196 00:12:35,720 --> 00:12:39,880 Speaker 1: of uprisings and revolts in the past. Well made the 197 00:12:39,920 --> 00:12:43,200 Speaker 1: situation in the late eighteenth century so unusual was that 198 00:12:43,280 --> 00:12:47,559 Speaker 1: it was branded. There was a common brand, there was 199 00:12:47,600 --> 00:12:50,679 Speaker 1: a common theme, and there was this pamphleteering, and you 200 00:12:50,800 --> 00:12:54,040 Speaker 1: got to a stage where quite a large part of 201 00:12:54,080 --> 00:12:57,440 Speaker 1: the population could read. And so they were reading I think, well, good, 202 00:12:57,440 --> 00:12:59,760 Speaker 1: they're better informed. Well only if they're reading well in 203 00:12:59,840 --> 00:13:03,800 Speaker 1: for documents preferably written by economists, of course, but they weren't. 204 00:13:03,840 --> 00:13:06,520 Speaker 1: They were reading propaganda. They were reading pamphlets which we 205 00:13:07,000 --> 00:13:11,600 Speaker 1: were lying and you know, you get the Gordon riots 206 00:13:11,640 --> 00:13:14,640 Speaker 1: in in the UK, which is the anti Catholic riots 207 00:13:15,000 --> 00:13:18,720 Speaker 1: in the late seventeen hundreds coming out of complete nonsense 208 00:13:18,800 --> 00:13:23,080 Speaker 1: being spread around, and then exactly the same thing with fascism, 209 00:13:23,559 --> 00:13:27,160 Speaker 1: the National Socialism, the Britis Union and fascists, etcetera. In 210 00:13:27,200 --> 00:13:30,280 Speaker 1: the nineties and of course in the United States, and 211 00:13:30,679 --> 00:13:36,280 Speaker 1: very often what we find is that irrationality exploits new 212 00:13:36,360 --> 00:13:41,199 Speaker 1: means of communication. So back in in the First Industrial Revolution, 213 00:13:41,640 --> 00:13:45,319 Speaker 1: the irrationality wars through pamphleting and printing and the fact 214 00:13:45,360 --> 00:13:51,000 Speaker 1: that you've got a literate artisan class and pamphlets were suddenly, 215 00:13:51,640 --> 00:13:55,360 Speaker 1: you know, the Twitter of their day. In the nineteen thirties, 216 00:13:55,480 --> 00:13:58,680 Speaker 1: there was a Catholic priest who was preaching over the 217 00:13:58,800 --> 00:14:02,720 Speaker 1: radio in America who was more popular than the president was, 218 00:14:03,520 --> 00:14:08,240 Speaker 1: and he was viewing at this this extreme racist, anti 219 00:14:08,320 --> 00:14:12,760 Speaker 1: Semitic view of the world to an enormous audience. But 220 00:14:12,960 --> 00:14:15,199 Speaker 1: because he was very good at adapting the new media, 221 00:14:15,240 --> 00:14:18,679 Speaker 1: and of course we see this today the technology and 222 00:14:18,720 --> 00:14:21,920 Speaker 1: the communications that we have now also of how fate 223 00:14:22,040 --> 00:14:27,760 Speaker 1: news and the dissemination of prejudice. Technology is very very 224 00:14:27,840 --> 00:14:30,160 Speaker 1: much a double edged sword in this this whole fight 225 00:14:30,160 --> 00:14:34,920 Speaker 1: against prejudice. So the suggestion, as you mentioned previously, is 226 00:14:34,960 --> 00:14:40,440 Speaker 1: that prejudice ultimately cost the economy and cost people in 227 00:14:40,920 --> 00:14:45,960 Speaker 1: various ways. Could you maybe explain how we actually judge 228 00:14:46,160 --> 00:14:51,760 Speaker 1: the opportunity cost of irrational decisions? I understand you know, maybe, um, 229 00:14:51,800 --> 00:14:54,520 Speaker 1: maybe in the first Industrial Revolution, if the Luddites were 230 00:14:54,720 --> 00:14:57,880 Speaker 1: smashing equipment, you could go around and taught up the 231 00:14:57,920 --> 00:15:01,400 Speaker 1: cost of all these destroyed machine and maybe you could 232 00:15:01,520 --> 00:15:05,160 Speaker 1: try to estimate a lost productivity for the economy. But 233 00:15:05,360 --> 00:15:08,600 Speaker 1: as economies grow more complex, and as we enter this 234 00:15:08,680 --> 00:15:12,920 Speaker 1: Fourth Industrial Revolution, how do you actually go about estimating 235 00:15:13,240 --> 00:15:17,080 Speaker 1: that opportunity cost? So this is where things become very 236 00:15:17,160 --> 00:15:21,160 Speaker 1: very difficult to put a precise figure on it. We can, 237 00:15:21,200 --> 00:15:24,760 Speaker 1: we can construct the narrative which explains clearly where the 238 00:15:24,800 --> 00:15:28,840 Speaker 1: costs come through. And essentially the costs come in two ways. Firstly, 239 00:15:28,880 --> 00:15:32,320 Speaker 1: if you've got prejudice, you're not employing the right person, 240 00:15:32,400 --> 00:15:35,480 Speaker 1: the right job at the right time. You're not maximizing productivity. 241 00:15:35,840 --> 00:15:40,000 Speaker 1: But secondly, also your decision making is flawed because if 242 00:15:40,040 --> 00:15:43,040 Speaker 1: you've got a monoculture sitting around a table and making decisions. 243 00:15:43,040 --> 00:15:46,920 Speaker 1: If if all of your decision makers are white, middle 244 00:15:46,960 --> 00:15:51,160 Speaker 1: aged bald Anglo Saxon men. Not that I've going against 245 00:15:51,160 --> 00:15:53,640 Speaker 1: the middle aged bald Anglo Saxon men, being one myself, 246 00:15:53,760 --> 00:15:56,280 Speaker 1: but if they're all the same, you're not going to 247 00:15:56,400 --> 00:15:58,440 Speaker 1: get a well rounded view of the world. You're gonna 248 00:15:58,600 --> 00:16:01,480 Speaker 1: miss things you've and miss opportunities, and worse, you're going 249 00:16:01,520 --> 00:16:04,120 Speaker 1: to miss risks. So those are your two costs, wrong 250 00:16:04,160 --> 00:16:08,040 Speaker 1: people in the job and bad decision making, particularly when 251 00:16:08,080 --> 00:16:11,280 Speaker 1: you're turning the world upside down. So how can we 252 00:16:11,400 --> 00:16:15,160 Speaker 1: quantify this? Well, the problem we run into is that 253 00:16:15,320 --> 00:16:19,080 Speaker 1: people don't admit to being prejudiced. They lie about it. 254 00:16:19,680 --> 00:16:23,840 Speaker 1: It's it's owns the Bradley effect after a political candidate 255 00:16:23,960 --> 00:16:26,840 Speaker 1: in the United States who was African American, who always 256 00:16:26,960 --> 00:16:30,600 Speaker 1: was pulling far higher in opinion polls than the votes 257 00:16:30,640 --> 00:16:33,440 Speaker 1: he actually received when he ran for office. Um, And 258 00:16:33,480 --> 00:16:35,640 Speaker 1: it's because people don't want to admit to other people 259 00:16:35,720 --> 00:16:38,360 Speaker 1: that they are racist. But in the privacy of a 260 00:16:38,480 --> 00:16:42,000 Speaker 1: voting booth they are happy to act on their their 261 00:16:42,000 --> 00:16:44,560 Speaker 1: principles as it were. What you get is and under 262 00:16:44,600 --> 00:16:47,720 Speaker 1: reporting of the level of prejudice. And of course you 263 00:16:47,840 --> 00:16:51,920 Speaker 1: also have difficulties in that some forms of prejudice can 264 00:16:51,960 --> 00:16:54,840 Speaker 1: be invisible. So, for example, sexuality is a very good 265 00:16:54,880 --> 00:16:57,800 Speaker 1: case where people may not be out at work, they 266 00:16:57,840 --> 00:17:00,400 Speaker 1: may hide who they are at work and said, well, 267 00:17:00,400 --> 00:17:02,440 Speaker 1: that's fine, they're not subject to prejudice. But they are 268 00:17:03,200 --> 00:17:07,040 Speaker 1: because if they're hearing homophobic jokes or slurs around them, 269 00:17:07,119 --> 00:17:11,080 Speaker 1: or if they're having to think twice before they speak 270 00:17:11,560 --> 00:17:14,200 Speaker 1: in any kind of social occasion, if they're constantly having 271 00:17:14,200 --> 00:17:16,560 Speaker 1: to edit themselves, that was an enormous strain on them 272 00:17:16,560 --> 00:17:20,760 Speaker 1: and it is clearly damaging for productivity. But trying to 273 00:17:20,840 --> 00:17:23,879 Speaker 1: identify that, you can't go around with a clipboard and say, okay, 274 00:17:23,920 --> 00:17:26,560 Speaker 1: which category do you fall into and how does that 275 00:17:26,600 --> 00:17:30,080 Speaker 1: affect your productivity? So very very goodle to quantify. What 276 00:17:30,119 --> 00:17:32,640 Speaker 1: we can do is we can look at some markers 277 00:17:32,680 --> 00:17:37,560 Speaker 1: like race, which give us some hints. These are obviously 278 00:17:37,680 --> 00:17:39,600 Speaker 1: race tends to be a more visible form of prejudice, 279 00:17:39,640 --> 00:17:42,399 Speaker 1: as does gender. Not always, but they are generally more 280 00:17:42,480 --> 00:17:45,119 Speaker 1: visible forms of prejudice, and we can look at the 281 00:17:45,160 --> 00:17:49,120 Speaker 1: costs that have come through from that, or we can 282 00:17:49,160 --> 00:17:53,160 Speaker 1: look at times when we've seen changing behavior and see 283 00:17:53,160 --> 00:17:55,800 Speaker 1: what's what's come about as a result of that to 284 00:17:55,800 --> 00:17:58,800 Speaker 1: get a sense of the economic cost of prejudice, So 285 00:17:58,880 --> 00:18:01,479 Speaker 1: to give two quick egg armples. In the United States, 286 00:18:01,520 --> 00:18:07,879 Speaker 1: you can compare racial diversity in different states by different professions. 287 00:18:07,880 --> 00:18:10,000 Speaker 1: And there's been some work done on this by academics, 288 00:18:10,640 --> 00:18:13,480 Speaker 1: and what they've shown is that there is a significant 289 00:18:14,160 --> 00:18:20,320 Speaker 1: increase in productivity in more creative roles that are more diverse. 290 00:18:20,920 --> 00:18:23,920 Speaker 1: So by creative I mean things like financial services, where 291 00:18:23,920 --> 00:18:27,439 Speaker 1: you need people who are thinking around problems in complex ways. 292 00:18:28,280 --> 00:18:30,199 Speaker 1: If you've got a diverse firm, if you're in a 293 00:18:30,240 --> 00:18:35,800 Speaker 1: diverse state, the productivity of financial service employees in that 294 00:18:35,920 --> 00:18:38,520 Speaker 1: area is significantly higher than in a state which is 295 00:18:38,520 --> 00:18:43,600 Speaker 1: relatively monoculture. Another study that I looked at is in 296 00:18:43,680 --> 00:18:49,280 Speaker 1: Saudi Arabia. So Saudi Arabia has recently lifted some of 297 00:18:49,280 --> 00:18:53,560 Speaker 1: the restrictions on women being entrepreneurs, made it easier for 298 00:18:53,600 --> 00:18:55,320 Speaker 1: women to set up their own businesses. They don't need 299 00:18:55,320 --> 00:18:57,359 Speaker 1: on male guardian to to support them, and so on 300 00:18:57,359 --> 00:18:59,879 Speaker 1: and so forth. And what you have seen there is 301 00:19:00,000 --> 00:19:02,840 Speaker 1: an explosion in the number of women setting up businesses 302 00:19:03,000 --> 00:19:05,880 Speaker 1: and contributing positively to the economy. I mean, it's sound 303 00:19:05,880 --> 00:19:09,040 Speaker 1: irregular is leading the world in female business creation at 304 00:19:09,080 --> 00:19:12,000 Speaker 1: the moment because these restrictions have been lifted. But what 305 00:19:12,160 --> 00:19:15,320 Speaker 1: that's telling you is just how much economic activity was 306 00:19:15,359 --> 00:19:20,160 Speaker 1: being lost when they had these restrictions in place in 307 00:19:20,200 --> 00:19:24,919 Speaker 1: the previous years. Let me ask you a question about 308 00:19:24,960 --> 00:19:28,159 Speaker 1: the sort of upshot of your work or the consequences, 309 00:19:28,240 --> 00:19:34,320 Speaker 1: because it's all well and good to say things like um, prejudice, 310 00:19:34,560 --> 00:19:38,520 Speaker 1: discrimination are costly that firms that don't make an effort 311 00:19:38,600 --> 00:19:42,840 Speaker 1: to change their ways and suffering. But you know, to me, 312 00:19:43,000 --> 00:19:45,439 Speaker 1: this sounds or this could sound a little bit like 313 00:19:45,480 --> 00:19:48,199 Speaker 1: a sort of I don't I don't know exactly the 314 00:19:48,320 --> 00:19:51,000 Speaker 1: term a little bit. Uh. You know, I remember this 315 00:19:51,119 --> 00:19:54,360 Speaker 1: sort of like heavy optimism of the late nineties where 316 00:19:54,359 --> 00:19:57,000 Speaker 1: we thought that like free markets and if we reduced 317 00:19:57,040 --> 00:20:00,439 Speaker 1: barriers to trade and deregulate and everything, could help all 318 00:20:00,480 --> 00:20:02,879 Speaker 1: this world peace and stuff because people would find that 319 00:20:03,280 --> 00:20:06,280 Speaker 1: it was you know, the incentive was to trade instead 320 00:20:06,320 --> 00:20:09,000 Speaker 1: of go to war. And then they didn't really pan 321 00:20:09,080 --> 00:20:14,960 Speaker 1: out like people expected. Other policy upshots that followed them 322 00:20:15,040 --> 00:20:18,320 Speaker 1: from your work in terms of the government or regulators 323 00:20:18,320 --> 00:20:21,880 Speaker 1: stepping into correctness imbalance, or is it in your view 324 00:20:21,920 --> 00:20:24,880 Speaker 1: that of firms were more aware of the profit potential 325 00:20:24,880 --> 00:20:28,280 Speaker 1: of making better decisions or having better decision makers would 326 00:20:28,280 --> 00:20:32,560 Speaker 1: get better out. So um, I think the issue here 327 00:20:33,080 --> 00:20:37,000 Speaker 1: is that there is a split. I believe that large 328 00:20:37,240 --> 00:20:42,240 Speaker 1: global businesses get this. They understand the issues around prejudice, 329 00:20:42,280 --> 00:20:46,480 Speaker 1: they understand the damage that it does, and as a result, 330 00:20:46,920 --> 00:20:50,680 Speaker 1: they are playing a more active role in fighting prejudice. 331 00:20:51,040 --> 00:20:55,240 Speaker 1: For example, so fairly early on in my Welcome Prejudice, 332 00:20:55,280 --> 00:20:58,479 Speaker 1: I was writing on the economics of marriage equality because 333 00:20:58,760 --> 00:21:02,560 Speaker 1: UDS was filing amarcust briefs before the U. S. Supreme Court, 334 00:21:02,640 --> 00:21:05,720 Speaker 1: saying yes, we want marriage equality because you know it 335 00:21:05,800 --> 00:21:08,120 Speaker 1: will mean that we will be a better business. Plus 336 00:21:08,160 --> 00:21:10,800 Speaker 1: you know obviously it's morally the right thing to do. 337 00:21:11,200 --> 00:21:13,359 Speaker 1: But the point was we were taking a clear stance 338 00:21:13,520 --> 00:21:17,439 Speaker 1: on this. And so I think global firms understand this 339 00:21:17,560 --> 00:21:22,680 Speaker 1: because they're dealing with multicultural employees, because they are looking 340 00:21:22,680 --> 00:21:25,960 Speaker 1: to profit maximize, because they're always looking at ways to 341 00:21:26,040 --> 00:21:31,000 Speaker 1: make the employees more productive. Where I think the real 342 00:21:31,160 --> 00:21:35,320 Speaker 1: danger is is that with smaller firms this is not 343 00:21:35,400 --> 00:21:38,760 Speaker 1: necessarily always so obvious. That you may be in a 344 00:21:38,800 --> 00:21:42,320 Speaker 1: relatively homogenized community, or you think the relatively comodernized community, 345 00:21:42,320 --> 00:21:46,119 Speaker 1: and you may miss out on the upside. You may 346 00:21:46,119 --> 00:21:50,840 Speaker 1: not realize that this upside exists. And if there isn't 347 00:21:51,640 --> 00:21:54,480 Speaker 1: an imperative to sort of push you in this direction, 348 00:21:55,080 --> 00:21:59,760 Speaker 1: then you may continue to make bad business decisions which 349 00:21:59,800 --> 00:22:02,200 Speaker 1: have managing to the economy, which are managing to your 350 00:22:02,240 --> 00:22:07,840 Speaker 1: business damaging to society at large. So the US actually 351 00:22:07,880 --> 00:22:12,560 Speaker 1: has a very good example of this from from baseball, which, 352 00:22:12,560 --> 00:22:14,960 Speaker 1: as I understand it is a sort of inferior form 353 00:22:14,960 --> 00:22:18,520 Speaker 1: of cricket that's quite popular in the United States, and 354 00:22:18,760 --> 00:22:22,480 Speaker 1: I knew that was coming. What what happened is in 355 00:22:22,520 --> 00:22:27,480 Speaker 1: the Nies, baseball was segregated. Teams were segregated on racial lines, 356 00:22:27,520 --> 00:22:31,760 Speaker 1: which is just insane. And then it desegregated and a 357 00:22:31,920 --> 00:22:38,040 Speaker 1: relatively small number of teams became integrated racially, and over 358 00:22:38,080 --> 00:22:42,680 Speaker 1: the next decade those teams outperformed in every possible way. 359 00:22:43,040 --> 00:22:46,760 Speaker 1: They played better, they won more games, they have more spectators, 360 00:22:46,800 --> 00:22:50,240 Speaker 1: and consequently they made more money. But it still took 361 00:22:50,480 --> 00:22:55,879 Speaker 1: over a decade after you could voluntarily desegregate for the 362 00:22:56,000 --> 00:23:01,439 Speaker 1: racist teams to start to become actually integrated teams. They 363 00:23:01,800 --> 00:23:06,840 Speaker 1: continued with racist recruitment policies for years even it was 364 00:23:06,840 --> 00:23:09,520 Speaker 1: blinding the obvious that it was doing damage to their business. 365 00:23:09,560 --> 00:23:11,720 Speaker 1: So I think that there is there's a there's a 366 00:23:11,800 --> 00:23:14,280 Speaker 1: mix here that you've got the profit motive and the 367 00:23:14,280 --> 00:23:17,760 Speaker 1: profit incentive and so on, and that's clearly going to 368 00:23:17,800 --> 00:23:20,440 Speaker 1: be very useful, but then there is also a need, 369 00:23:20,480 --> 00:23:23,520 Speaker 1: I think, for government to take action. And after all, 370 00:23:24,240 --> 00:23:26,480 Speaker 1: when we're talking about government taking action, what we're talking 371 00:23:26,480 --> 00:23:30,880 Speaker 1: about here is treating everybody the same, saying no one 372 00:23:30,920 --> 00:23:33,919 Speaker 1: group in society is less than another group. That's all 373 00:23:33,960 --> 00:23:38,520 Speaker 1: we're talking about. It's not a huge ask, frankly overall, 374 00:23:38,840 --> 00:23:41,040 Speaker 1: and if you've act, you're guiding principle, and I think 375 00:23:41,080 --> 00:23:43,359 Speaker 1: that there is a need for government to nudge in 376 00:23:43,400 --> 00:23:47,440 Speaker 1: that direction. So there's a broader economic implication here as well, 377 00:23:47,480 --> 00:23:50,880 Speaker 1: which is that if you think about the past ten 378 00:23:50,960 --> 00:23:54,520 Speaker 1: years or so, the global economy has really been marked 379 00:23:54,600 --> 00:23:59,800 Speaker 1: by this sluggish productivity, which has in turn fed into 380 00:24:00,320 --> 00:24:06,080 Speaker 1: low inflation and relatively low GDP growth. The implication is, 381 00:24:06,119 --> 00:24:09,880 Speaker 1: I understand it, is that if you do away with prejudice, 382 00:24:10,280 --> 00:24:15,800 Speaker 1: then you might end up boosting productivity and generating economic 383 00:24:15,880 --> 00:24:19,120 Speaker 1: growth in one of the few ways that are sort 384 00:24:19,160 --> 00:24:22,800 Speaker 1: of left to us, Is that right? I think so. 385 00:24:22,880 --> 00:24:25,879 Speaker 1: I mean, there's there's actually two possibilities here. One is 386 00:24:25,920 --> 00:24:29,560 Speaker 1: that as we become more efficient, we create more growth. 387 00:24:30,400 --> 00:24:34,400 Speaker 1: The alternative is that as we become more efficient, we 388 00:24:34,760 --> 00:24:40,280 Speaker 1: stop using environmental credit environmental resources in an unsustainable way. 389 00:24:40,520 --> 00:24:42,560 Speaker 1: Um And I think we'll probably end up with a 390 00:24:42,640 --> 00:24:46,120 Speaker 1: mix of the two. That we will end up becoming 391 00:24:46,160 --> 00:24:50,439 Speaker 1: more environmentally efficient, which doesn't necessarily mean more growth, but 392 00:24:50,480 --> 00:24:54,760 Speaker 1: it means we maintain our existing standard of living without 393 00:24:55,359 --> 00:24:59,560 Speaker 1: doing so much environmental damage, or alternatively, we we create 394 00:24:59,760 --> 00:25:03,920 Speaker 1: a amount more growth in terms of living standards. Now, 395 00:25:04,040 --> 00:25:05,920 Speaker 1: I think it's certainly the case that that g d P, 396 00:25:06,160 --> 00:25:08,760 Speaker 1: which is widely regarded in the economics profession as are 397 00:25:08,800 --> 00:25:12,359 Speaker 1: rather outdated statistic, may not capture everything that we're talking 398 00:25:12,400 --> 00:25:15,400 Speaker 1: about here in terms of the efficiency and the changes. 399 00:25:15,800 --> 00:25:17,840 Speaker 1: And this is something that we've known about for some time, 400 00:25:17,880 --> 00:25:22,679 Speaker 1: that your GDP is not well suited to the century. 401 00:25:22,680 --> 00:25:25,880 Speaker 1: It was designed to maximize wartime production in the nineties, 402 00:25:25,920 --> 00:25:28,280 Speaker 1: it's not really suited where we are now. UM So 403 00:25:28,480 --> 00:25:30,840 Speaker 1: we may not necessarily see this in the GDP data, 404 00:25:31,200 --> 00:25:33,320 Speaker 1: but we would end up with people having a higher 405 00:25:33,359 --> 00:25:38,240 Speaker 1: standard of living in the future. If we minimize prejudice, 406 00:25:38,280 --> 00:25:39,640 Speaker 1: we're never going to get rid of it. I mean, 407 00:25:39,760 --> 00:25:42,600 Speaker 1: everybody is prejudiced, but we can try and minimize it 408 00:25:42,600 --> 00:25:44,639 Speaker 1: as much as possible and make people aware of it 409 00:25:44,720 --> 00:25:48,280 Speaker 1: as much as possible, and by doing that we we 410 00:25:48,320 --> 00:25:52,120 Speaker 1: do create a more efficient society which maintains or improves 411 00:25:52,119 --> 00:25:56,080 Speaker 1: our living standards whilst doing less overall damage to the 412 00:25:56,240 --> 00:26:18,680 Speaker 1: to the planet. I'm curious what you think about I'm 413 00:26:18,720 --> 00:26:22,520 Speaker 1: not actually sure over there, like how the Bank of 414 00:26:22,520 --> 00:26:26,560 Speaker 1: England has thought about this question. But obviously here the 415 00:26:26,640 --> 00:26:30,440 Speaker 1: Federal Reserve in the last several years has taken a 416 00:26:31,000 --> 00:26:35,000 Speaker 1: keener interest I would say on the unemployment gap between 417 00:26:35,040 --> 00:26:38,800 Speaker 1: different races and this idea that sort of late in 418 00:26:38,880 --> 00:26:41,520 Speaker 1: the expansions we started to see the benefits of an 419 00:26:41,520 --> 00:26:48,320 Speaker 1: economic recovery spread out too previously marginalized groups. And you know, 420 00:26:48,880 --> 00:26:51,400 Speaker 1: prior to COVID we saw started to see a real 421 00:26:51,600 --> 00:26:56,480 Speaker 1: acceleration in the lack unemployment rate in the US. Do 422 00:26:56,560 --> 00:27:01,800 Speaker 1: you see uh implications uh and benefit It's from policy makers, 423 00:27:01,840 --> 00:27:06,119 Speaker 1: including central bankers, taking a more expansive view of the 424 00:27:06,119 --> 00:27:10,560 Speaker 1: benefits of full employment and how to define employment and 425 00:27:10,600 --> 00:27:15,920 Speaker 1: so forth. Um by thinking more concretely about these gaps 426 00:27:16,080 --> 00:27:19,280 Speaker 1: when setting policy or when say, thinking about went to 427 00:27:19,359 --> 00:27:23,440 Speaker 1: titan went to tighten interest rates. Well, at the risk 428 00:27:23,440 --> 00:27:27,600 Speaker 1: of sounding like a traditional economist, yes and no um 429 00:27:27,720 --> 00:27:31,600 Speaker 1: so yes, clearly unemployment matters. We know that if you've 430 00:27:31,640 --> 00:27:35,879 Speaker 1: if you've got a better household income UM, your particularly 431 00:27:35,960 --> 00:27:39,679 Speaker 1: children in that household, will have better opportunities education wise, 432 00:27:39,760 --> 00:27:44,239 Speaker 1: and things like that extraordinarily important. But to focus just 433 00:27:44,440 --> 00:27:49,320 Speaker 1: on income is actually misguided because what we tend to 434 00:27:49,320 --> 00:27:53,960 Speaker 1: find is that prejudice, and particularly more extreme forms of prejudice, 435 00:27:54,640 --> 00:27:58,440 Speaker 1: it's not really about income and relative income, it's about 436 00:27:58,440 --> 00:28:02,360 Speaker 1: social status. Now, for income and social status are tied together, 437 00:28:03,000 --> 00:28:06,400 Speaker 1: um varies from countries to country, perhaps more closely tied 438 00:28:06,440 --> 00:28:09,080 Speaker 1: in the United States than in the United Kingdom, but 439 00:28:09,160 --> 00:28:12,600 Speaker 1: they are tied together. But there is a difference here. 440 00:28:13,200 --> 00:28:16,360 Speaker 1: And what we tend to find is that if you're 441 00:28:16,359 --> 00:28:20,840 Speaker 1: seeing big shifts in terms of relative income, then you'll 442 00:28:20,840 --> 00:28:24,600 Speaker 1: get a bias towards what a European would call social 443 00:28:24,600 --> 00:28:29,399 Speaker 1: democratic policies, so center left policies, redistribution policies. But if 444 00:28:29,440 --> 00:28:32,639 Speaker 1: you've also got a loss of social status, the income 445 00:28:32,680 --> 00:28:36,800 Speaker 1: doesn't offset the loss of social status UM, and people 446 00:28:37,040 --> 00:28:41,200 Speaker 1: then turned more extreme forms of politics, and that's where 447 00:28:41,200 --> 00:28:43,240 Speaker 1: you get either extreme left or extreme or right or 448 00:28:43,680 --> 00:28:46,760 Speaker 1: populism for want of a better word. So I think 449 00:28:46,800 --> 00:28:49,440 Speaker 1: that center rights can do quite a lot in this 450 00:28:49,560 --> 00:28:52,959 Speaker 1: regard in terms of trying to mitigate the damage, and 451 00:28:53,000 --> 00:28:57,280 Speaker 1: certainly for the longer term, where things like equality of opportunity, um, 452 00:28:57,960 --> 00:29:01,520 Speaker 1: getting the right education, that can be a very very 453 00:29:01,520 --> 00:29:05,960 Speaker 1: big thing. But central bank policy is not necessarily that 454 00:29:06,000 --> 00:29:09,320 Speaker 1: well equipped to deal with social status over time UM. 455 00:29:09,360 --> 00:29:11,400 Speaker 1: And so that I think is going to be one 456 00:29:11,440 --> 00:29:14,480 Speaker 1: of the challenges that that he's going to be thrown 457 00:29:14,560 --> 00:29:16,880 Speaker 1: up over the next few years. You know that if 458 00:29:16,920 --> 00:29:19,600 Speaker 1: you're a lawyer's clerk, for example, who's worked hard at 459 00:29:19,640 --> 00:29:22,640 Speaker 1: school and studied to get to that position, and your 460 00:29:22,720 --> 00:29:25,960 Speaker 1: social status is just going down because your employment prospects 461 00:29:25,960 --> 00:29:29,360 Speaker 1: are going down because your jobs being auginated away. UM. 462 00:29:29,720 --> 00:29:31,560 Speaker 1: There's a limit to what the Federal Reserve can do. 463 00:29:34,120 --> 00:29:38,880 Speaker 1: What Paul are absolutely fascinating topic. And I mentioned in 464 00:29:38,880 --> 00:29:41,240 Speaker 1: the intro that this was actually something you were paying 465 00:29:41,240 --> 00:29:45,080 Speaker 1: attention to many many years ago, back in two thousand eleven, 466 00:29:45,280 --> 00:29:48,720 Speaker 1: and you've followed through on it to write the new book, 467 00:29:49,080 --> 00:29:52,160 Speaker 1: So thank you very much for joining Joe and myself 468 00:29:52,280 --> 00:30:16,040 Speaker 1: to talk about it. Thanks Paul, that was great. So Joe, 469 00:30:16,080 --> 00:30:18,760 Speaker 1: I know there's UM, I know, there's sometimes a tendency 470 00:30:18,840 --> 00:30:24,880 Speaker 1: to to think about prejudice or I guess diversity initiatives 471 00:30:24,920 --> 00:30:27,840 Speaker 1: as the sort of corporate fluff. But I think Paul 472 00:30:28,000 --> 00:30:32,959 Speaker 1: does lay out a very compelling, um, you know, rational 473 00:30:33,840 --> 00:30:37,840 Speaker 1: argument for why companies and economies should be looking at 474 00:30:37,880 --> 00:30:41,320 Speaker 1: this and in particular this idea that most of our 475 00:30:41,360 --> 00:30:46,000 Speaker 1: future growth is probably going to become come through productivity improvements. 476 00:30:46,080 --> 00:30:48,240 Speaker 1: And one of the ways we can improve productivity is 477 00:30:48,280 --> 00:30:53,200 Speaker 1: by being more efficient with our human labor capital in 478 00:30:53,240 --> 00:30:56,680 Speaker 1: addition to our you know, machine based capital. And by 479 00:30:56,680 --> 00:30:59,680 Speaker 1: the way, I'm very I'm aware that calling people human 480 00:31:00,000 --> 00:31:03,400 Speaker 1: abert capital is a terrible thing, So forgive me for 481 00:31:03,520 --> 00:31:06,880 Speaker 1: doing that people people. UM No, I mean I think 482 00:31:06,920 --> 00:31:09,240 Speaker 1: that's right, and I think, yeah, I've been thinking about 483 00:31:09,280 --> 00:31:12,959 Speaker 1: economics for too long. I think, you know, Paul's arguments 484 00:31:13,000 --> 00:31:19,040 Speaker 1: and his historical analogies. UM, they're super interesting and compelling 485 00:31:19,120 --> 00:31:21,560 Speaker 1: and sort of like thinking about like the sort of 486 00:31:21,840 --> 00:31:25,680 Speaker 1: irrationality of people who only have access to part of 487 00:31:25,720 --> 00:31:30,960 Speaker 1: the picture is um A sort of very useful frame. 488 00:31:31,400 --> 00:31:33,360 Speaker 1: But I think, like, you know, I'm still like hung 489 00:31:33,440 --> 00:31:37,760 Speaker 1: up on the solutions or like what the upshot is 490 00:31:37,840 --> 00:31:42,040 Speaker 1: because it doesn't seem like enough to just acknowledge that 491 00:31:42,280 --> 00:31:45,000 Speaker 1: or for like more companies to quote get it. I 492 00:31:45,040 --> 00:31:47,440 Speaker 1: think that like, you know, there's there's still a good 493 00:31:47,520 --> 00:31:51,240 Speaker 1: argument for like yes, but in the meantime, you know, 494 00:31:51,800 --> 00:31:53,800 Speaker 1: give people money, you know, sort of going back to 495 00:31:53,880 --> 00:31:57,360 Speaker 1: the original question or or or more explicitly, you know, 496 00:31:57,720 --> 00:32:00,200 Speaker 1: sorted my question about like the foot of reserve. It's 497 00:32:00,200 --> 00:32:02,640 Speaker 1: like they're all kinds of issues. Like I guess we 498 00:32:02,720 --> 00:32:07,680 Speaker 1: can't um solve prejudice. It's never going to go away. 499 00:32:08,000 --> 00:32:12,360 Speaker 1: There's more things to life than employment and income. But 500 00:32:12,560 --> 00:32:17,720 Speaker 1: also employment income are really good. M yes, um, but 501 00:32:17,960 --> 00:32:20,000 Speaker 1: you know what I'm saying. Yeah, But also I mean 502 00:32:20,040 --> 00:32:23,640 Speaker 1: I think we can agree that probably, you know, fifteen 503 00:32:23,720 --> 00:32:27,000 Speaker 1: or twenty years ago, we wouldn't have been having a 504 00:32:27,120 --> 00:32:31,640 Speaker 1: conversation about economics and prejudice and what a central bank 505 00:32:31,840 --> 00:32:36,160 Speaker 1: can do to diminish social injustice. Like that just wouldn't 506 00:32:36,160 --> 00:32:39,120 Speaker 1: have happened. So the fact that we're having this conversation 507 00:32:39,160 --> 00:32:42,440 Speaker 1: conversation already suggests that we've come a long way, or 508 00:32:42,480 --> 00:32:45,680 Speaker 1: at least we're entering up perhaps the start of a 509 00:32:45,720 --> 00:32:49,080 Speaker 1: new economic paradigm. Again, what we've been discussing all year, 510 00:32:49,280 --> 00:32:53,080 Speaker 1: this notion that the events of have really accelerated some 511 00:32:53,120 --> 00:32:57,000 Speaker 1: shifts that we've already seen in traditional economics. No, I 512 00:32:57,240 --> 00:32:59,800 Speaker 1: I completely agree, and I think like the fact that's 513 00:32:59,800 --> 00:33:03,480 Speaker 1: so on many like traditional quarters of the economic world 514 00:33:03,520 --> 00:33:06,360 Speaker 1: are talking about this. I think it's huge. And again, 515 00:33:06,440 --> 00:33:08,240 Speaker 1: like going back to the FED, like this is like 516 00:33:08,240 --> 00:33:12,120 Speaker 1: a major thing under the pile FED and also under 517 00:33:12,200 --> 00:33:17,840 Speaker 1: yelling like talking about economic inequality, sharing the benefits of prosperity, 518 00:33:18,000 --> 00:33:22,120 Speaker 1: and they're being good long term things to come from. 519 00:33:22,160 --> 00:33:24,720 Speaker 1: When prosperity is shared, I think is like one of 520 00:33:24,760 --> 00:33:27,480 Speaker 1: the most promising things. And so the fact that it's 521 00:33:27,480 --> 00:33:32,080 Speaker 1: coming from mainstream courts I think is encouraging. Yeah, the 522 00:33:32,120 --> 00:33:39,960 Speaker 1: idea that economics should ultimately improve people's well being? Who knew? Okay, 523 00:33:40,080 --> 00:33:43,520 Speaker 1: kind of outlandish? All right, let's leave it there. All right, 524 00:33:43,760 --> 00:33:46,840 Speaker 1: This has been another episode of the All Thoughts Podcast. 525 00:33:46,920 --> 00:33:49,560 Speaker 1: I'm Tracy Alloway. You can follow me on Twitter at 526 00:33:49,600 --> 00:33:53,360 Speaker 1: Tracy Alloway, and I'm Joe Wisnal. You could follow me 527 00:33:53,520 --> 00:33:56,240 Speaker 1: on Twitter at the Stalwart, and you should check out 528 00:33:56,280 --> 00:33:58,880 Speaker 1: our guests book Paul Donovan. He is the author of 529 00:33:58,960 --> 00:34:02,680 Speaker 1: Profit and Prejudice, The Blood Ends of the Fourth Industrial Revolution. 530 00:34:03,160 --> 00:34:07,080 Speaker 1: And here's something special. Listeners to odd Lots can get 531 00:34:07,000 --> 00:34:09,759 Speaker 1: a discount on the book if they go to the 532 00:34:09,840 --> 00:34:14,000 Speaker 1: Ruttledge website for the book and use the code o L. 533 00:34:15,200 --> 00:34:17,800 Speaker 1: That discount applies to either the hardback or the e 534 00:34:17,920 --> 00:34:21,680 Speaker 1: book version, so check it out and get a discount. 535 00:34:22,120 --> 00:34:24,600 Speaker 1: Also be sure to UH in the meantime, follow our 536 00:34:24,640 --> 00:34:28,719 Speaker 1: producer Laura Carlson. She's at Laura M. Carlson. Follow the 537 00:34:28,719 --> 00:34:32,759 Speaker 1: Bloomberg head of podcast Francesco Levi at Francesca Today, and 538 00:34:32,880 --> 00:34:36,759 Speaker 1: check out all of our podcasts under the handle at podcasts. 539 00:34:36,840 --> 00:35:06,240 Speaker 1: Thanks for listening.