November 15, 2020

Alan Kirman

Directeur d’etudes, CAMS-EHESS Paris Professor Emeritus, Aix Marseille University Senior Adviser, OECD NAEC Initiative  Alan Kirman is professor emeritus of Economics at the Aix-Marseille University and at the Ecole des Hautes Etudes en Sciences Sociales and is a member of the Institut Universitaire de France. His Ph.D. is from Princeton and he has been professor of economics at Johns Hopkins University, the Universite Libre de Bruxelles, Warwick University, and the European University Institute in Florence, Italy. He was elected a fellow of the Econometric Society and of the European Economic Association and was awarded the Humboldt Prize in Germany. He is member of the Institute for Advanced Study in Princeton. He has published 150 articles in international scientific journals. He also is the author and editor of twelve books, most recently Complex Economics: Individual and Collective Rationality, which was published by Routledge in July 2010.

1. Why does economics matter?

It’s not lear what that question means… Do you mean does it matter as a sort of discipline, as a scientific discipline, or do you mean: does it matter for mankind and for humanity and so forth? And I think that our problem has been that it’s become a sort of introverted science. And so in some sense, it doesn’t matter very much, whereas in a general sense it matters a lot, because a lot of the things that people do and claim that they do for policy, for example, are based on standard economic theory, which has become more and more detached from the real world.

So I think in some sense it matters a lot because what we prescribe for people and for nations, for example, is often based on so-called economic theory, whereas in fact, our theory doesn’t really explain very much about what’s going on in the real economy. So in a sense, it matters a lot. But as we do it, I think it shouldn’t matter as much as it does. We will come back to this because it’s really a question of how you think of economics, what sort of discipline is it, what is it supposed to do and so forth.

And so whether it matters or not is how we do it. And do we do it in a way which in some sense has a real impact on the world? And I think, yes, but the impact is not the one that we would expect from economic theory. And that’s because economic theory has detached itself from that real world. So, as I say, my conclusion is that economics should matter a lot, but the way it’s done, I think it probably matters too much at the moment.

2. What are the differences between economic science (academic economics) and economic engineering (policymaking)?

That’s actually something which was discussed by Greg Mankiw, who’s an economist, I don’t actually agree with many of the things that he says, but I think he put his finger on something very important and he said, you know, engineering is about solving problems. And so engineers are people who try to solve particular problems and do it as best as they can, whereas science is about trying to understand the mechanisms that underlie things and so forth. And so what he came to the conclusion, when he was chairman of the Council of Economic Advisers in the US, he came to the conclusion that, in fact, macroeconomics as a science has contributed very little to our policymaking and so forth, whereas economics, that’s an economic engineering, and unfortunately, he said, I think all the progress made in economic science has done very little to help with the engineering problems which policymakers have faced with every day. So I think the big difference there is: can you think of economics as a way of solving particular problems and you find those solutions and their best solutions, optimal solutions? Or should you think of it as being trying to guide a system in the way you want it to go? And if you think of it in the second way, you probably very, very quickly stop depending completely on or even at all on economic science.

So I think that’s where the real distinction comes. And we’ve separated the things far too much. And we should not be happy with pursuing economic science. And it, of course, contains many, many other ideas. Think of Thomas Piketty, who’s worked a lot on inequality, and he said, you know, the problem is that economists tend to dress things up mathematically to impress the people they’re talking to. And really what’s behind much of their reasoning is ideology.

So, in fact, the idea that we’re doing pure science is a myth. It’s unreal. We’re not doing pure science is guided by very particular ideas about what we think should happen and based on ideology and prejudices which are not really what we should be doing if we thought of ourselves really as pure scientists. So those economists would like to say, no, we’re objective, we’re just doing science. That’s unreal. It’s just not the way it is.

And Kaushik Basu, who became the chief economic adviser to the government of India, is a well-known theoretical economist beforehand and then became chief economist at the World Bank. I don’t remember in which order… at suddenly he was faced with very real problems. And he said, you know, move right away from your desk at the university thinking about these things in general to having to look at real problems and faced with political constraints and social constraints.

So I think that the idea that economics can be thought of as a pure science, which we would have loved, is just unreal.

3. What role does economics play in society? Does it serve the common good?

Right, and that’s exactly the point I’m sort of getting to, which is: if you think of the way we talk, we teach economics, if you think of the way that we tell our students, they should think of economics… What are we talking about? What we say is that, well, directly from the Enlightenment, from Hume and people like this and John Stuart Mill, afterwards, these people told us that the liberal democracy, the idea of liberal democracy was the natural goal for a society.

That’s where we should be going. And that… of itself, if we leave people as far as possible to their own devices, then we will automatically get into a situation which is satisfactory for society. And that’s the myth on which we built our whole, not just economic, but political system. And the problem is that keeps getting into trouble. And each time it does, people say, well, that’s just a shock, a perturbation. We can just get it back on track and to be OK.

And in fact, I think that’s not the way that economics should be thought of. Think of the economic system as a sort of organism which is constantly changing, constantly reacting to the changes in its environment and its environment itself, is actually being changed by the behavior of society. So this interaction that goes on all the time, as Basu said when he moved to India, he said, look, economics is at the frontier between society and politics, and that’s where economics has to be.

But that’s practical economics.

That’s sort of economics where you’ve got to make decisions and you’ve got to tell people what we should try to do and so forth. But there you have to be very humble and very modest. And we don’t have simple, clear answers. We can’t solve these problems for the optimum. And that’s one of the things that economics has always been in recent years trying to do, trying to reduce it to a problem of optimization and I think is totally wrong.

Right, and this is, I think, probably the most difficult question that we’re going to be faced with and people think right now, at the moment, that it’s a pandemic and we should be worried about epidemics and so forth and worried about how are we going to get out covid. But in fact, the looming crisis are much more important one, I think, even than covid, it is going to be the environmental crisis. And they’re the problem is that we’re doing exactly the same thing as we tried to do in theoretical economics.

We look for the optimal choice.

What choice should we make in terms of how much emissions we actually produce? What choice should we make optimally to balance the loss that we’re going to have in growth with the gain that we could get in reducing carbon emissions? And that’s really the wrong way to look at it, because the argument there is, well, could we find some sort of nice equilibrium with the planet a bit warmer? Because after all, we’ve been producing a lot of greenhouse gas emissions.

But could we just not, for example, look at what would be the optimal temperature? Maybe you could have a temperature increase of, let’s say, two degrees, three degrees without aiming at two or even less, but we’re more likely to be headed for four. And the problem is that all these calculations about optimists suggest that when you get to four degrees warming, that’s where you’re going to stay and then we can work out how you organize that and how you change things, how some parts of the planet will become very dry and too hot.

Look at Australia, for example, and then we’re going to work out how are we going to handle that? Look at the cost of that and compare it with what should we be doing to change that? And that’s a completely wrong way to look at it for the simple reason that we’re in this evolving, changing system. We’re not in a system where you can decide on four degrees, get up the emissions, right, to get to stay at four degrees.

You won’t stay at four degrees. If you get to four degrees warmer, it will get even warmer. And that’s the real disaster, is that we’re not dealing with it in the right way. We’re not reacting to this system as it evolves and we see these things accelerating. We watch the Antarctic ice melting and we see all of these things happening and we are doing it. And this is the important thing. The Anthropocene era, the one that we now live in, is one in which we have done a great deal to change the environment and the constraints that we live under.

So we have to do something about that. And I think the only real realistic way is to look at what we can actually do now quickly to ensure that in the long run, our children and even ourselves… probably not me… but will be in a satisfactory, reasonable situation. And people keep trying to calculate the cost. This is what happened. Nordhaus got the Nobel Prize in economics for his work on the environment.

But I really think that the person who should have got it was Nick Stern, who sounded the alarm and pointed out that making the sort of calculations I’ve just been talking about, doesn’t actually solve the problem. We don’t want to calculate the cost and so forth. I think the cost of changing is grossly overestimated and indeed the benefits that we get it’s not as if we are doing something for which our children will have to pay. No, if your children are faced with a world in which the water is cleaner, in which the environment is better, and where the world is no longer sort of sizzling and has started to burn, they will be very grateful.

They won’t think, well, good heavens, why did our parents ever do that and how are we going to reimburse this debt? That’s not the right way to think about it. We should just be doing all that we can right now to change the system so that we can actually not depend on things which are totally out of our control in some sense.

So the point is that should we sort of calculate these costs and benefits as we’re doing, given that the world as it is, is organized to depend on taking stuff out of the ground, burning it and then suffering the consequences and then trying to do something about it? I mean, the radical solution is one which Doyne Farmer at Oxford has proposed. He said, let’s decide to leave it all in the ground. Let’s just leave it in the ground and then try and work with that.

Of course, nobody would accept that, particularly the powerful fossil fuel lobby. But in some sense, that is what we should be aiming for. And if you just took a quick moment in the covid crisis, there was that wonderful moment where satellite photographs of emissions in Beijing and in northern Italy showed that suddenly areas which were heavily polluted became clear, became green. And that was simply because we stopped doing what we usually do, which is burning fossil fuels, which we then use to produce things.

And probably a lot of the things that we don’t actually really either need or want. So I think that the whole approach to choosing an optimum trade off between two things is not the right one. We should simply recognize that there is this tendency now for the climate to not only to warm, but also to accelerate. And the other problem is we don’t really know, even with the best climate models, exactly what the consequences will be. We started to see them.

We see them in Australia. We see them in the changing time at which the even when you’re just gathering the grapes for wine. When I first moved to France, that happened in September. Now it happens at the end of August. And so the climate is changing and we have to adapt ourselves and do all that we can to prevent this becoming the sort of spiral into a disaster. So I think that this is something where we have to look at the world in a very different way.

It’s not a world which is in a nice equilibrium, gets knocked off a bit by shocks and so forth. It’s a world in which everything is changing, everything is evolving, everything is adapting. And we just have to learn how to deal with that in a much more pragmatic and much more modest way, but in a much more purposeful way.

5. As we live in an age of economics and economists – in which economic developments feature prominently in our lives and economists have major influence over a wide range of policy and people – should economists be held accountable for their advice?

Well, that is actually several questions, but I think… you say we live in a world of economics and economists and in a certain way we do, because we hear these people, they make forecasts and we think of them as being sort of serious number producers and so forth.

But I think the other thing is that, in fact, economists as theorists have rather little impact on what’s going on.

And I mentioned the name of Thomas Piketty already in terms of inequality and despite the fact that his book was a huge bestseller, I think it was a book, a bit like A Brief History of Time by Stephen Hawking, a book that sold an amazing number of copies and was read by an amazingly few amazingly small group of people.

So I think that the underlying basic problems that we’re faced with, growing inequality and all of these are things which economists somehow have tried to minimize. And that starts right from the moment that you start teaching economics. If you think of sort of basic definitions of economics, you would you’re told that it’s about the production, distribution and consumption of goods and services. Well, that means that the people in this economy are people who are consumers, producers and people who own particular amounts of wealth.

So do you really want to think of people as being reduced just to consumers? Is that what we do? Is that what I’m just here to consume? That’s what the producers think, too, of course, because they are there to produce what I’m going to consume. But actually, as humans in many of our early political economists point out, those are not the basic human motives. People want to be seen to be good people have ideas about ethics and so forth.

There are many, many facets of economics which we like to try to exclude. And if you look into the details of many economics problems, you will be told, no, no, that’s not economics. I started to look closely at the way in which certain markets, even the fish market in Marseilles, work. How does the market actually work? Well, you know, you ask that question and then you go there. And I was told by a very well-known economist, somebody who I liked a lot and was a great economist, Tony Atkins… he said: that is anthropology, that’s not economics, but anthropology is in fact part of economics. It should be. So I think that the idea that the economist is this sort of technician who’s sitting there, that’s exactly what he can’t be because we don’t have a theory which tells us how to handle practical problems. So our theories are detached from reality. So it always amazes me that as soon as it starts, the big organisations like the OECD with whom I work in a group called New Approaches to Economic Challenges, that that group was looking at alternative ways of looking at the economy.

And in fact, people get very nervous when you try to do that. They say, you know, the only you shouldn’t take all these social and political considerations into account. But that’s exactly what policymakers have to do. They have to take those things into account. So we listen to. But in a very strange way, how can it possibly be true that the when covid starts, that you get forecasts about how much that’s going to affect GDP and so forth, unemployment and all of these things?

We have really no idea about that. So how can we be immediately producing figures saying, well, you’re probably going to get an increase in unemployment up to nineteen point one percent? Now, that doesn’t make sense to say that we don’t have models which can tell us that when the environment, the models that constrain everything changes, then we have to just look at this and say, can we see some sort of pattern that’s going on here? And then when we see that pattern, can we do something which we hope will improve things a bit, improve things… by that I mean, of course, improving welfare in general. And then we come back to the problem of who does it improve for? And I’d say I think economists in some sense, I listen to it because they produce numbers, but those numbers are often essentially meaningless and they change, you know, two weeks later, you’re told, well, actually, we have to revise our figures a bit. We said we’re going for two point one, but now we’re looking like one point nine.

Again, I don’t think that makes a lot of sense. And those are probably not the numbers we should be looking at. But economists listen to as if they were technicians were producing serious stuff, evidence based stuff, but that’s not what we’re doing. So I think economists should have a different attitude, should be much more modest, should admit that we live in a world of radical uncertainty and in that world of radical uncertainty, in a recent book by Mervyn King, the former governor of the Bank of England, and John Kay, they said, you know, sometimes you just have to say: Let’s stop and try and understand what’s going on here and not just give a simple answer, because often the answer is: we simply don’t know. And that would be a welcome, very welcome admission from some of these people who tell us with great clarity and with great insistence that they know exactly what’s going on. I remember Lucas, who was president of the American Economic Association, saying: the central problem of depression prevention has been solved. I think he said that in 2006, just before the great financial crash.

So, you know, that’s just not the way the world is. The world is constantly evolving, constantly changing. And we have to watch it and try and see patterns that we recognize. But we don’t have a nice, neat theory which can give us answers, give us solutions. We don’t have solutions.

6. Does economics explain Capitalism? How would you define Capitalism?

Does economics explain capitalism. That’s a very interesting question. Of course, it depends entirely on how you define capitalism and there are many, many definitions and many, many varieties of capitalism. So I think that’s a question which is almost impossible to answer. But let’s think of capitalism at least sort of as a first start, as a system in which basically most of the means of production and most of the wealth and so forth are controlled by the private sector and the state is there to provide some underlying services. And then we are told the markets will, of course, take care of only everything that happens in between. Now, the problem is that, first of all, this whole idea is based on the fact that some people will own the capital, they will invest it, that will produce the goods which the people who consume it will need and so forth. But that system has many, many defects, as most people now know.

And the system is depends on the fact that somehow the invisible hand that Adam Smith talked about… if we leave people to their own devices, then the invisible hand will arrange for a situation which is socially satisfactory… But socially satisfactory… and the only definition that we came up with it was paratus definition, which said, yeah, a situation is socially satisfactory if we cannot make somebody better off without making somebody else worse off. But the problem is… how many socially satisfactory situations in which that doesn’t make a lot of sense…

Think of a situation in which one person owns everything, and then you would say, well, of course, that’s a socially satisfactory situation because if we take something away from him, he’ll be worse off. So to make anybody better off, we would have to make him worse off. But none of us, I think, would agree that that was a satisfactory definition.

So the the the problem with, as I said, that there’s many definitions of capitalism, but if you think of it as being private ownership, essentially of the productive means and society, then we live in a situation which is at least partially capitalist. But we should also remember that the state, in fact, plays a huge role and people don’t want to acknowledge that. And the ultra libertarians don’t want the state to play a huge role except when we get into crisis.

Then they suddenly say that the state must come to the rescue… state must bail out the banks and so forth. But in general, they think that the state should not interfere and they do everything they can to stop it interfering.

And I think that is an unfortunate part of our current situation. But then we thought, you know, you ask: what is this invisible hand, how does it work? How will it get us back into a socially satisfactory situation? How does the private ownership of capital do that? And then people say to you, it’s the markets, markets do that. And you say, oh, can you explain to me how markets get you from a situation which might not be in a socially satisfactory state into what? How do the other markets do that?

And then what Douglas North, who got a Nobel Prize in economics for studying institutions, said, you know, it’s an astonishing part of economic theory that markets play so little role. In other words, we don’t actually study how markets work. The most economists are not really interested in the nitty gritty of how markets work. So they can’t really explain to you how markets solve the problem. And the invisible hand, which is supposed to say how capitalism or some other system actually guides us towards some sort of socially satisfactory situation.

We can’t actually explain that. And in fact, theoretically, given our assumptions about how people are motivated and so forth, we can actually show that you can’t explain how a situation, how an economy would get from a situation which is unsatisfactory to one that’s satisfactory. So capitalism was supposed to be the sort of counterpart of liberal democracy, the two things I always thought of as somehow going together.

But in fact, capitalism has changed in nature of all, a huge concentration of wealth in the hands of very few people. Competition is largely an illusion nowadays, so much concentration in various industries that there’s very little competition in the real sense. And Martin Wolf from the Financial Times once said, you know, we have far too little competition in areas where we should have competition and far too much in areas where you don’t need it. And there are many, many parts of our society where what we need is a cooperative, not competitive approach, where we need people to get together to do things and many other parts where there should be competition and there isn’t because we allow concentration of wealth in so few hands. So we have this unsatisfactory situation that capitalism, as it stands, has led us into a situation where some people have a lot of the wealth, but they decide what they’re going to do with it, and they are very few of them. And in addition, the state’s role is constantly denigrated and criticized as being unsatisfactory, inefficient and so forth. So Mariana Mazzucato, who wrote a wonderful book called The Entrepreneurial State, pointed out that the state actually does a lot of the entrepreneurship and can do a great deal to get us into a socially satisfactory situation.

But capitalism left to itself. And what was it that Kipling said like nature, red in red in blood and tooth and claw. So this sort of aggressive competition, which leads us to a socially satisfactory situation, simply is not a description of what actually goes on. And I think capitalism as it is, and many, many people recognizes it cannot continue, it doesn’t organize itself into a socially satisfactory situation. The covid problem is a real illustration of that.

So think of this organism, this huge organism, the socio economic system. And think what happens is hit by something like the pandemic. What immediately happens is that certain things start to really work rather badly, and at that point the organism tries to rush resources to those parts of the organism that’s not doing well and as if it had a disease which has to be cured. But unfortunately, what also happens is that this reveals other problems. Let me give you a very stupid and simple example, which is that with the arrival of covid, with the confinement measures in different countries, the delivery of goods like food and so forth to people’s houses by things like Uber accelerated, a huge amount of resources, suddenly went into people delivering these goods.

But the people who deliver those goods have very poorly paid and often very unstable jobs. And so they start to react. They say, well, you know, why should we when we are essential in this new system, why should we have to work for such little when we’re doing an essential job?

And then that starts to unwind and those sort of gig economy, which is suddenly expanded and people are unhappy with doing that job, and we shouldn’t be dependent on sort of little people who suddenly have to deliver to everybody. Our system should be sufficiently resilient that we could actually prepare for this and make sure that people had the basic necessities. And this is not a left wing idea. You know, this is like universal health care. So why should that not be part of a capitalist economy?

There’s no reason that the United States, the wealthiest country in the world, cannot even provide universal health care for all its members. It just doesn’t seem reasonable. Is the United States poorer in some sense than Denmark? If we had had universal health care in many countries, it would have helped enormously with handling covid because we wouldn’t have had to go through all the procedure. For example, in the US, we have Congress has to vote for special appropriations to put the funds into people’s hands in order for them to be able to have access to certain types of medical care and so forth.

And you have to subsidize hospitals and you have to vote for that. Now, there’s nothing wrong with voting for things, but those things should be basic. They should be things that we have automatically. And this is not, again, a left wing idea. Hayek once said, we believe that people everybody should have the means to have a satisfactory life as a that should be a basic requirement from there on. It’s the jungle. OK, but nevertheless, even he saw that we had to protect even the weakest members of society to make sure that they have the essential things.

And capitalism, as it stands, doesn’t do that. It doesn’t make sense in the richest country in the world to have long lines of people waiting for food because their salaries have either temporarily disappeared or even permanently disappeared. So I think we have to we’ll have to commute into another system, whether we call it capitalism or some modified form of capitalism doesn’t matter. It’s not the name that matters. It’s the way in which the system works. And the system as it is, is not resilient.

It’s not in a nice equilibrium as people would like to claim it is, and it never is. And so capitalism as it is, is not delivering the goods. And so we have to change it. That many people, wealthy people, owners of firms and so forth, recognize this and have started to say, ah, well, maybe we should take some more care about our employees having a participation in what we decide and not just say that they are just a cost.

When Air France was faced with a demand for wage increases from members of its staff, they said, no, we can’t afford this because this would increase our costs and diminish our competitiveness. But if you tell the people who work for a firm that it’s just a cost, you know, then these people are not going to be very happy. If you tell them they’re participating in something and they are necessary to deliver what the firm produces, then that’s very different.

They should be part of this enterprise, not some sort of wicked cost, which you have to diminish as far as you can. And if you have the possibility of shipping off the production or whatever you do to somewhere else where wages are cheaper, that’s not a very satisfactory system. And I think that’s the sort of thing that we’ve been faced with. And we’re going to have to change. And I think a lot of people recognize that.

7. No human system to date has so far been able to endure indefinitely - not ancient Egypt or Rome, not Feudal China or Europe, not the USSR. What about global Capitalism: can it survive in its current form?

I think I just partially answer that, because I think the answer is no, but then it’s a bit of a broad brush to say no system has survived in the past in the sense that even the Roman Empire, even the other systems that you mentioned, the Egyptian system, they were systems in the same way. I think that was sort of consistent over time. If you take a situation that is well known to people in Italy: fascism. Fascism had many different aspects and changed as it moved even in a period of about 20 years.

And so you could say, well, did fascism… was it successful or not? Well, that would be very difficult to answer. I mean, from a moral point of view, you would say, no, it was a disaster. But from an economic point of view, it sort of moved through phases where it seemed to be improving things and then that turned out to be a disaster and so forth. But just to say, will this system survive?

What the question really is, will it be a revolutionary change? Will we really have to rethink the fundamental ways in which our economy works? Is that what’s going be at stake? And I think that’s exactly what is at stake. We have to make a fundamental change in our way of thinking of things and not say: when we get back to normal and: when we get back to the standard situation. Then as long as we keep saying that, we’re saying the system will somehow survive.

You know, the system, we have to tweak it a bit. We have to change it a bit. But sometimes systems go through real upheavals. And of course, the old systems you mentioned went through real upheavals, but in a long period of time and now we’re going to go through an upheaval, I think, in a shorter period of time. And the question is how well will we handle that? And for the moment that all those people talk about, let’s get back to normal: normal is not going to be the same anymore.

And so we will have to, I think, hope that the system will change sufficiently, that we will be in a system where we’re more resilient, where we react to what’s going on, but where we don’t think that we have the answers. I think we don’t have many answers and we have to be much more modest about that. But we also have to confess that to the people we’re faced with. So we can’t say we have the answer. And you saw this in the handling of the pandemic. We know the answers. We know that masks and that use are useful. Then we thought masks are absolutely essential and so forth. And this goes on and becomes a sort of almost a silly game of saying that the technical people that we’re relying on the science, but you’re not relying on the science because things keep changing. We didn’t know enough about Covid to know what the science said. So I think I saw a silly quote, which is actually rather nice.

Somebody said, well, if masks work, why do we have to have social distancing?

But if social distancing works, why do we have to have masks and if masks and social distancing work, why do we have to have a lockdown? And so that some sort of, you know, an interesting question. But then somebody came back with a wonderful response. He said, well, if seatbelts work, why do we have to have airbags in cars? But if airbags work, why do we have to have seatbelts? And if seatbelts and airbags work, why do we have to have brakes?

And I think that’s exactly the situation that we’re in that, you know, at this point in time, we find out that what we thought of was a solution turns out not to be quite a solution.

Now, we will be told and we are being told as soon as we find a vaccine, then the problem will be solved and we’ll be all back to normal. But that’s not true either, because as we know that a large percentage of people now actually refuse vaccines. And one quarter of the people interviewed in the United States on the subject said they would not accept to be vaccinated against Covid. So even if we found a vaccine which is efficient, we’re going to be faced with the anti vaccines, as they’re called, and these guys, if they don’t accept the vaccine, that won’t be a solution. So we’re always looking for neat solutions. And the vaccine would be a neat solution. But in general, neat solutions don’t turn out to be so neat and not necessary to be even solutions.

8. Is Capitalism, or whatever we should call the current system, the best one to serve the needs of humanity, or can we imagine another one?

I think the problem is that… Does capitalism, is it the best system? As it stands, surely not. And then people say, yeah, but what’s the alternative? Central planning? We know that doesn’t work. And yet, in some sense, for example, in a wartime situation, we were all surprised at how well central planning worked. So you may remember that many people who were passionately libertarians after the war were interested in planning and so forth.

And economists as a whole were often influenced by that. Dubreuil, probably one of the purest economic theorists, was strongly influenced by the planning of the French economy during the Second World War, so forth. So the alternative is more state intervention or state control of certain things. That’s one alternative. There are many other alternatives, cooperative ventures of various sorts, and actually involving people in the systems in which they work, getting the people who do the work to have some say in the decisions, but… as it stands, the system won’t survive if it tries to keep getting back to normal because normal had become abnormal and a normal left too many people out of the game.

And so I think that the answer to this question is that, in fact, capitalism may survive in some form or other, but it’s surely not going to be the form that it’s got to now. And. As it is, we’re not dealing with the problem of everybody… what you notice is… Angus Deaton, another Nobel Prize winner, wrote a book called The Great Escape.

He said, you know, one of the wonderful things is that many, many people got out of poverty. But that’s true globally. But unfortunately, locally and a whole lot of countries, those who didn’t get out of poverty and are in bad shape and are very vulnerable are still there. And we haven’t done enough about that. And people are migrating in part because of changes in the environment which we have generated, but also in part because of wars and other things.

And we’re trying to interfere with that migration because people say it threatens us. So the whole system is not taking care of all the troubles that it produces. And that’s because we see it too much as an economic system. We’re worried about should we impose tariffs or not? And the war between the United States and China. All of this is very destructive in some sense because it tries to boil the problem down to sort of technical questions. Are tariffs a bad thing or good thing?

But our vulnerability under the current system has become really apparent. And I give you two examples. First of all, think about antibiotics. If we are to believe Sanafi, they are one of the biggest pharmaceutical companies in France, the only one antibiotic that’s produced in France, all the rest come from essentially India and China. So antibiotics are very important. Now, we worried about a virus, but we should also be worried about bacteria and the bacteria becoming more and more resistant to antibiotics.

And yet all those antibiotics are being produced in countries over which we have very little control, and that’s normal. But we should think about a system which pushes us into a situation in which we become extremely vulnerable like that. And so you think the that’s the first example of this offshoring, constant offshoring of everything leads you to be very vulnerable to a small break in the supply chains. Then we have many examples, other examples of that and a number of supply chains broke down.

And so if you go to the supermarket, you notice that certain things are missing and those things are missing because that particular part of the chain had one or two little producers who have either disappeared or got into difficulty. And as soon as that happened, then people felt the shock. But the shock really wasn’t that important for the moment. We sort of got by with the thinking, well, we can we’re getting back to normal, but I think we’re not getting back to normal.

And our vulnerability has been revealed by this sort of pandemic. And the second observation about that is: think about countries like Germany, where they handled the pandemic much better than, for example, the United States. But now you have an upsurge in cases of Covid. What happened? Who was the people who are producing that in Germany? They were immigrant workers living in poor conditions, crowded conditions, not able to do social distancing and so forth.

And they produced the hot spots, which restarted the epidemic. So in other words, within our society, the way it organized itself, instead of organizing itself into a wonderful situation which is good for everybody, it’s organized itself into a situation where some people are living in conditions which unfortunately are the conditions that generate the conditions for spreading a disease, for example. But that’s our fault. I mean, we knew that. We know that those people were there, but they were hidden.

You know, this wonderful film, The Parasite, the Korean film in which you have the wealthy family and then you have the poor family trying to get into the wealthy situation. And having those people there, having those people in those bad conditions is something which our system has produced and which we should not actually tolerate. If we want to have immigrant workers who are producing the sort of goods that we need, then we should also treat immigrant workers right.

And not think that we don’t see them very much, that we don’t really want to know about that we have to know about that. And we have to take care of everybody, not just those people who are benefiting from what the other people produce.

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