REITH LECTURES 2020 DR. MARK CARNEY (ex govr bank of england; advisor to Boris Johnson) Interviewer: Anita Ahland (AA) [Marked with my comments, especially === on links with ideas with which I am currently trying to work out in relation to economics, finance and banking. This is motivated by the feeling that wealth, economics, finance and banking need a complete rethink, from a Biblical and/or Reformational perspective. This need for a rethink has been prompted by the Covid-19 pandemic and the question, (a) how should we pay for the lockdown subsidies? (b) was not our economies bloated with harmful and non-necessary stuff anyway, so should we really try to return to ever-growing GDP? (GHU: Good, Harmful, Useless. See "https://youtu.be/X_Y0fEGMrNA") This is why I listened to the Reith Lectures this year and found what MC said very interesting. Note also that where I did not catch the words used I substituted a guess in [square brackets]. [] indicates where I do not remember what the word was. "..." indicates content I missed. Please excuse the many spelling errors, because of mistyping, and the heavy use of abbreviation. ] # 9 January 2021: I have begun adding identification codes for the various points that Mark Carney makes, in the style of "[m1nn]", "[m2nn]", "[m3nn]", "[m4nn]" for the four lectures, and nn is the identification number. Points made by questioners are labelled similarly "[q...]". ----------- LECTURE 1. 2 December 2020 --- Interview #i bulls, bears, sharks? # threats of cc and covid #i retiring # was getting a little tired of crises; maybe someone else should have a go #i is it hard to let go # not really. #i proudest moment? # way the financial system performed once Covid-19 started; we had tried to prepare the system for risks we did not know about. ------ Lecture # Story by O Henry. Penniless couple buy gifts for each other, sacrificially, but ironically and sadly, what each sacrificed for the other was what the other's gift was aimed at. I was Only 8 years then, had not learned. # Glasgow, Adam Smith, height of Scottish Enlightenment. How markets create [wealth]. [m101] Lectures will end in Glasgow COp26 # Pondered why water, essential, is free; yet diamonds, essentially [frivolous] are expensive. Why. Why Amazon company is huge $m while amazon rainforest missing from all ledgers. [m102] # Concepts of value. # Values and value are related by distinct. [m103] # "Values represent principles or standards of behaviour, or judgements of what's important in life, such as fairness, responsibility, sustainability, solidarity, dynamism, resilience and humility." [m104] [===GHU, DOOYEWEERD'S ASPECTS], # "Value is the regard that something is held to deserve, its importance, its worth, its usefulness. Value isn't necessarily constant, but rather specific to time and situation." [m105] e.g. "My kingdom for horse". The value we have placed on the daily essentials during pandemic. # Over the centuries, two broad schools of thought of what determines economic value, objective and subjective. [m106] # --- Objective Value Theory. # Value derived from how product is produced. In turn, how that value determines wages, profits and rents. Aristotle, Adam Smith, David Ricardo, Karl Marx, etc. [m107] # "The last three classical economists lived during periods of unprecedented urbanisation, industrialisation and globalisation, and they placed the growth and distribution of values squarely in the context of enormous social and technological changes then underway." [m108] # "All three would have found profoundly alien the view widespread today, that economics is a neutral, technical discipline, to be pursued in isolation from such dynamics." [m109] # Adam Smith 2 major works. 11:00 # his 2nd = wealth of nations: the most purchased and arguably, least read in economics. # his 1st = Theory of Moral Sentiments [m110]. Divorcing economic capital from social capital is an error. Caricature = lassaiz faire. but wrong view. # Central concept in Adam Smith: "Continuous exchange marks all human interactions: exchanges of good in markets, exchanges of meanings in markets, exchanges of regard and esteem in the formation of moral and social norms." [m111] [===AB: HUMAN FUNCTIONING ab] # [Formation of values.] "Smith believed that we form our norms and values by wishing to be loved and lovely, that is to be well thought of or well-regarded. We receive feedback from perceiving how how others judge us, creating incentives to mutual sympathy and sentiment. This leads people to develop habits and principles of behaviour." Social memes that are learned, imitated and passed on. Can mutate. Cascade into tipping points. [m112] # Smith's views must be seen in their context of his day. "Markets are living institutions, embedded in the culture, tradition and trust of their day. Those markets determine the the distribution of value, which he believed, as did Ricardo and Marx after him, is fundamentally derived from labour." [m113] # --- Subjective Value Theory. # "In the late 19th and early 20th century, a group of economists known as the Neo-classicists, launched an upheaval in value theory, comparable to the copernican revolution in science. Copernicus transformed astronomy by moving its axis from the earth to the sun. The Neo-classicists shifted the axis of value theory, from the factors of production like labour, to the perceieved value of goods to the consumer, in other words from the objective to the subjective." [m114] # [continuing on from above] "People value goods that satisfy specific wants. It's only because people value these goods that the inputs that go into making them have value. Labour does not give goods value; labour is valued because the good it helps to create is valuable. Value is in the eye of the beholder, not in the sweat of the labourer." [m115] # In the century Subjective Value Theory has gone mainstream. # "The combination of Subjective Value Theory, in which price equals value, and a cursory understanding of the "invisible hand" in which markets yield optimal outcomes, supported by unseen and unchanging moral sentiments, promotes a view that all market outcomes equals value creation, and through them the growth of the wealth and welfare of nations." [m116] # "The concept of value, synonymous with economic theory a century ago, is now barely discussed. But in her majisterial book 'The Value of Everything', the economist Mariana Maxicado makes the case forcefully that we need a contested debate on value. So let's have one." [m117] --- [=== DOOYEWEERD ASPECTS ; GHU] 15:21 # Right balance between market and state. Shifted in recent decades. "Market is becoming the organising framework not only for economies but increasingly for broader human relations, with its reach extending well into civic and family life." [m118] [=== DOOYEWEERD'S ASPECTS AND KUYPER SPHERES OF SOCIETY] # "In parallel, the social constraints on unbridled capitalism - religion and the social contract - have been steadily eased. The Thatcher-Reagan revolution fundamentally shifted the dividing line between markets and governments. This change in direction was long overdue and their reforms unleashed a new dynamism. With the fall of Communism at the end of the 1980s the spread of the market grew unchecked." [m119] # So by the time I joined the G7 in the early 2000s the conventional wisdom of market efficiency reigned supreme. Policy makers had nothing to tell the market; we only had to listen and learn. The convention then: the market is always right. [m120] [===IDOLATRY] # Faith:: Tomas Skilba: "When we grant an entity infinite wisdom we enter realm of faith." [m121] [=== PISTIC ASPECT] # Faith can guide life but blind policy. Such trust led to the only solution to market failures was to add more markets or reduce regulation further. [m122] (will examine in next lect) ----- 3 RELATED RISKS that the combination of subjective value and market fundamentalism encouraged. # First set of risks: Subjective value theory assumptions: # Assumptions: "Perfect competition, Commodity goods, Complete markets, Rational consumers and financiers." [m123] # "In many cases, when these assumptions don't hold they drive a wedge between private and social value." [m124] e.g. » when one or a few companies control a market, prices are too high and production is too low. [m125] » Or if markets are incomplete small shocks can lead to massive damage. [m126] » When there are externalities, individual actions can drive social disasters like the climate crisis. [m127] # Second set of risks: Human frailties. [m128] [=== HUMAN SIN - but also non-sinful things] # "We are far from perfectly rational when making decisions. We tend to support our past decisions even when wrong. We think of examples that come to mind and think they are more common than they actually are. We are irrationally impatient." e.g. Ice cream more valuable in summer. Water in desert. Ventilators during Covid-19 pandemic. [m129] [=== LIMITED SPHERE OF ANALYTICAL ASPECT] [===MULTI-ASPECTUAL FUNCTIONING] # "If we value the present much more than the future, we're unlikely to make the necessary investments today to reduce risk tomorrow." e.g. Despite a history of financial crises, banks didn't build buffers in advance of the global financial crisis. e.g. "Despite overwhelming scientific evidence society is still under-investing in addressing climate change." Nor did we invest adequately for pandemic. [m130] # These tragedies won't be fixed by fixing market imperfections alone. [m131] # "The third, and most profound, set of risks # Arise from the drift from moral to market sentiments. [m132] They include » the undercutting of the social foundations of the market, [m133] » the corrosion of values arising from pricing of goods, services and civic virtues that have been traditionally outside the market, [m134] and » the flattening of values, by forcing decisions to be made according to utilitarian calculations." [m135] [=== DOOYEWEERD'S ASPECTS, GHU] # "Let's take the first of these drifts, the changing nature of markets. Of course, markets don't exist in a vacuum. [m136] Markets are a social construct whose effectiveness is determined partly by the state and partly by the values of society. Requires the right institutions, a supportive culture, and the maintenance of social license. Values of trust, integrity and fairness are critical to effective market functioning, and these values have increasingly been taken for granted." [m137] [=== MULTI-ASPECTUAL FUNCTIONING] # "Milton Friedman's [m138] classic ====[paeon?] to shareholder value includes the following caveat. 'The corporate executive's responsibility is to make as much money as possible WHILE CONFORMING TO the basic rules of SOCIETY both those embedded in law AND IN ETHICAL CUSTOM.'" [m139] # "Where did these basis rules come from? Economic and political philosophers from Adam Smith to Friedrich Hayek have long recognised that beliefs are part of the inherited social capital which provides the social framework for free markets [m140] . That social capital is the product of both formal institutions and culture, including what the Nobel Laureate Douglas North referred to as 'incentives embodied in belief systems'." [m141] 21.56 # "The question is whether the expansion of the market, an expansion that Friedman helped unleash, is changing the underlying social contract on which it has been based. Could the emphasis on the individual over the community, or on our selfish traits over our altruisic ones, imperil both the market's effectiveness in determining value and ultimately society's values?" [m142] # In short, in moving from a market economy to a market society, are we consuming the social capital necessary to create economic and human capital? [m143] # "The ethical customs that Friedman assumes can change. Indeed, many of those necessary to support market functions are corroded when financial returns become disembodied from their impact on other stakeholders." [m144] [=== GHU, Impact] # "Friedman himself revealingly acknowledged the importance of such moral sentiments when he observed that a company might devote resources to provide amenities for its community, but only in the expectation of attracting employees, and that it could engage in such hypocritical window dressing by calling this social responsibility lest it (I quote) 'harm the foundations of the free market to admit that this /fraud/ is all in the pursuit of profit alone.' /This/ is how the corrosion happens, and did happen, in the ensuing decades." [m145] 23.30 # This brings me to the second drift [seeing civic virtues from economic aspect] "The way the spread of market mechanisms can change and corrode society values. [m146] A traditional concern concern is what happens to our values when we have a hierarchy based only on wealth. [m147]" A "statussphere built on money" Tom Wolff. Value equated by monetary value. Increasingly. [m148] # Logic of market increasingly applies not only to buying and selling goods but increasingly to things like health care and Environmental protection. [m189] # But when everything becomes is anything mutable? # Michael Sandell: market is reaching into realms of life [where it should not] ... [=== SPHERE SOVEREIGHTY KUYPER; DOOYEWEERD ASPECTS]. [m150] # "There is considerable evidence that commodification, putting a good or service up for sale, can corrode the value of the activity being priced." [m151] # The celebrated Study: The group of children motivated only charitable and civic virtue raised most money - more than those who were paid to raise money. [===ethical aspect] [m152] Similarly voluntary blood donation in UK exceeds paid-for blood for sale in the USA. # "In all these cases, money crowds out civic norms." [m153] # "A moral error of many mainstream economists is to treat civic and social virtues as scarce commodities. This ignores extensive evidence that civic virtues atrophy with disuse, but grow like musclles with regular exercise. As Aristotle observed, virtue is something we cultivate with practice. We become just by doing just acts, temperate by doing temperate acts, brave by doing brave acts," [m154] # No government told over one million people to volunteer for nhs. "Solidarity during the first lockdown was - yes - contagious." # "When we outsource civic virtue to paid third-party providers we narrow the scope of society and encourage people to withdraw from it. There is extensive evidence of a commercialisation effect. When people are engaged in an activity they see as intrinsically valuable, offering them money weakens their motivation by depreciating or even crowding out the intrinsic interests or commitments. [m155] # "In these ways, the spread of the market can undermine community - one of the most imporant determinants of happiness." [m156] [=== c.f. My feeling that shoving western money onto Africa etc. is not always a good idea] 27.20 # Now the final corrosion of the drift from moral to market sentiment is how subjective value flattens values when we make decisions." [m157] # An advantage of the subjective approach to value is that it is neutral (mkt price) # "The disadvantage is that it sets in train a process in which welfare is interpreted simply as the sum of all prices. This flattens values, padding them up with no consideration of their hierarchy or distribution." [m158] [===DOOYEWEERD'S ASPECTS GIVES DIVERSE TYPES OF VALUES AND HENCE COULD OVERCOME THIS] # "As we shall see, it encourages tradeoffs of growth today and crisis tomorrow, tradeoffs of health and economics, tradeoffs of planet and profit." [m159] # "Subjectivism implies that anything not priced is not valuable. This encourages bringing more goods and activities into markets, a process that can affect perceptions of their value." [m160] # "The alternative is to have many assessments of the costs and benefits of new policies that infer prices because there isn't a market." [m161] [=== DOOYEWEERD'S ASPECTS OFFER THIS] 28.40 =====ghere 27 January 2021 # see lecture 3. # How reasonable are estimates of the value of life? [m162] # Our general failure to put a price on social infrastructure and social capital. # In GDP, gov adds nowt except public sector salaries; But what captures performance during the crisis? The pay of the healthcare workers, or their heroic efforts throughout? # Two answers: Bentham utilitarian and the welfarist of JS Mill. # Bentham: utility = "that property in any object whereby it tends to produce benefit, advantage, pleasure, good or happiness, or to prevent the happening of mischief, pain, evil or unhappiness to the party whose interest is concsidered." [m163] "The very idea of happiness needs to be defined. The hedonic measures of welfare, that is pleasure or pain, are inadequate." [m164] # "Mill described what Bentham's calculations missed, including a sense of honour and personal dignity [pis], love of beauty [aes], the passion of the artist [aes], the love of order, of congruity, of consistency in all things [aes], the love of action [fmv] and the love of ease [aes]. Mills' intuition is backed by extensive research into the science of wellbeing, which finds a wide range of determinants of human happiness aren't priced, and these include mental and physical health [bio][psy], human relationships [soc], community [soc], dignity [pis] and the general social climate [soc]. [m165] These can be hard to calculate and, again, efforts to calculate them can be corrosive." [m166] [===DOOYEWEERD'S ASPECTS - see abbreviations inserted above] 30.45 3. Distrbution matters. .. # "Where there are large benefits for disadvantaged groups and small costs for others, a policy may enhance welfare despite what market value may suggest. A Christmas Bonus of £1000 means less to Mark Zuckerberg than £500 does to someone on a minimum wage." [m167] # Season of Goodwill. # "To many economists, all this gift-giving is fraught with inefficiencies. [m168] # "Joel Wallvogel has calculated the loss of utility that results from imperfect gifts in kind rather than efficient gifts in cash. And he attributes the practice of presents over payments to the stigma over cash giving. He calls this the 'deadweight loss of Christmas' Ho Ho Ho. " [m169] # "His article, in the most prestigious economic journal, fails to consider that the stigma against monetary gifts reflects norms worth honouring and encouraging like attentiveness and thoughfulness. [m170] # "And it's this juxtaposition of the Magi and the merchant which captures much of the story of value thus far. Today the subjective approach to value has spread widely. Market value has been taken to represent intrinsic value and if a good or activity is not /in/ the market it is not valued. We're approaching the extremes of commodification as commerce expands deep into the personal and civic realms. The price of everything becomes the value of everything." [m171] # Next 3 lectures. how these dynamics in credit, covid and climate. ------- end lecture. # start with values for market to function ... values cut across . hierarchy of values. [=== ROLE OF NON-XN: society values; DOOYEWEERD'S ASPECTS. ] # Q. Justin A. Reduction of state, you mention as positive. Companies now: profit with purpose. If market is a social construct, why has it taken market so long to take social costs into account? A: we moved into direction into primacy of profit. Now pendulum moving back. Many are pursuing purpose in society -> profitable in long term [=== 100 year-old companies]. # Q. Ed Ball. Diffnce betw financial and society value. Child care. Living longer, care homes. pay carehome and childcare workers much less. Failure of private sectore, state sector, or us as individuals? e.g. we demand degrees of teachers and nurses but not childcarers OR Ccareworkers. A: Take what does happen: services incrasing perform in markets. what we saw with crisis : just how valuabhle they are. we value things on average not on essential;,, [=== GHU]. I think that has gone too far. #i if you want to change things, do you not need interventionist gov? [=== but what about other motivations beside governments, such as religious commitment (mediated by churches etc.), or the innate goodness that we have seen during pandemic?. ] A: ... do we value and regcs pressures # Camilla Cavendish. Q: Tragedies on horison: not enough value on future. e.v. cc. What should democracy do? Short electoral cycles. How take account of future. Authoritarian regimes better change of net zero? A: Be clear about the objective. e.g. net sero by 2050. [=== no: obedience r.t. plans. ] Can do same for carbon crises. Once where we decide where we want to go [=== agreeing where we go] Q: Stop cc becoming political. A: agree. # Mike: difference betw values and value. A: Unilever always shown focus on purpose is good. [=== 100 year-old companies. # Geo Osborne. We know vaue of money £1 = £1. But values under attack, and criticised. How achieve consensus? Don't we end up money becoming lowest common denom we can agree. [=== DOOYEWEERD'S APSECTS] A: ... c Covid-19 diffnt rules for diffnt ppl. Solidarity goes alongside values. Trickling down . making that explicit. #i much easher to be banker than poltiician. # Chandra. Q: what has been lost by repudiation of socialism. A: not sure we've lost a great deal from recent repudiation of socsm. but ... cc .... positve. acceld by Covid-19 crisis. how channel ai etc. to benefit society. A: move towards all benefits # Mariana Mavecado. Confusing price with value, esp. care workers not valued. End up confusing rent with profit. Adam Smith by free market, he meant free from rent not free from state. Financial sectore: hedge fund - all actual treated same; all matters if income and GDP. GDP problem - needing to put happiness. Getting rid of rent. A: You need a value theory toknow how to channel those opportunities. esp at these times. Agriculture to merchant to ... If you just value price you miss lots. Flattening of values; so hedge funds more valuable than caring profession cos they make more £. Not nec right to put price on wellbeing [=== c.f. Gunton et al. 2017, on EcoSystem Valuing rather than EcoSystem Services.] # Anthony Gormley: What keeps you awake at night: Capitalism unable to curb addition to endless growth or find serious response to cc crisis. Is there another system to do what we want? [=== DOOYEWEERD ASPECTS] A: Imrpove functioning of markets that moves the mvn of individual towards responsiblty. e.g. making senior managers responsibil. But bigger point is to organise mkt in pursuit of what society values. what is possible but not assured re cc. [# nme: pay brazil for oxygen?] #i do you keep awake thinking "I should have done more"? A: No. I lay awake trying to ... but cannot move hundreds billions without explaining. # Helen: Unpaid labour. (= unfelled tree in rainforest) women hit hardest. A: This is why I brought it up. Huge services, but not value that's subscribed to them. Peenalises this behaviour. Ensure those decisions made in a way that ... Covid-19 impact most on women. # Prof. Michael Minelli. Worlds first digital map: Money used to exchange value. art versus . etc. but communities change values slowly. [=== BUT REVIVALS?] Misdirected. Focus on short term? A: Discounting. e.g. progress on vaccine. But these swings are too big. General orientation? yes, but market always right? No. -------- end. Next time: financial crash. -------------------- LECTURE 2. 9 December 2020 From Credit Crisis to Resilience [missed the first bit but its about the long period of stability that preceded 2007, 19 years? he told of one case in 2007.] # The 2008 crash [m201] # Why did nobody see it coming? [later he said some did] [m202] # Because they were all [involved] in the [programme] of finishing the economic [system/project] [of stability?]. [m203 pistic: commitment # Newton, after loss cos of investment in south sea bubble,: "I can predict movement of galaxies but not the madenss of people" [m204] # "If something doesn't make sense, it doesn't make sense" applied to financial products. [m205: pistic stupidity] # This was not a technical [problem/mistake]. It was [human stupidity etc?] [m205] # When bankers become disconnected, they do not see the impact of their [errors/mistakes] # Markets built on markets ethically fragile as well as financial. [m206 eth] # Once a decade [something big happens]. # Lessons painfully learned during bust are graudally forgotten during boom time. [m207 pistic forgetting] # 4 words [didnt get that] # early progress [in financial stability?] turning into blind faith. [m208 pistic blind faith] # several thing drove it. # "households had to borrow to increase consumption" [then he said some more; i think a vicious circle kind of thing] [m209 consumption, greed eth] # complacency fed by long period of stability (19 years?) [m210 pistic complacency] # Three lies believed, taken for granted. [m211 pistic false beliefs] # Lie 1. myth that markets regulate themselves spontaneously. [m212] --- # lie 2. blf that market always right. [m213] # .... cannot address their causes [m214 unpredictablity?] # ... dominated indifference of policy makers before the crash. attempts to build new markets on old ones. financiers sought new products. then light touch. [m215 jur] # Arrow and [] calculating. but markets are only clear in textbooks [m216 complexity of real life]. they had assumed perfect rationality. so adding markets make it worse. # depends on who owns them. # panic ensues. possib of # even ... # mkt fundamentalism depends on able to calc odds of every [possibility] [m217 pistic] # not being able to desribe each outcome ... [m214] # swings pessimism, exuberance [m218 aes]. distorted by human behv. kaynes: derivative of derivative of subjective [utility]. ---# lie 3. "markets are moral". [m219] takes for granted the social capital [m220 eth,soc] on which they rely. social license that mkts need to innovate and grow. fraudulent. rogue traders [m221 jur]. how detached the traders were from the households they were cheating. Becamse clubby [m222 soc]. participating online. insstead of competition. # hard and soft infrastructe. soft = culture etc. [m223 soc] # diffct to get it right cos financial mkts serve us all. [m224 asps serve] # transferring risks to those least able to bear them (households) .... [m225 jur] vital that mkts work well. #mkts not always clear and we suffer fromt their amorality. # what do we do? # ... system .... transition to netzero c economy. [m226] # to resist the siren calls of the three lies, policy makers must tie themselves to the mast. [m227 pistic] # need humility [m228 eth]. plan for failure. create an anti-fragile system. banks that can stand on their own. (must hold 10 times capital as in 2007). # privatised profits and socialised the loss. unjust sharing of risk and reward ... [m229 jur] # now g20 bringing back mkt discipline, to ensure banks can fail safely [=== DOOYEWEERD ASPECTS] [m230] # cyber penetration tests. plan for failure. [m231 fmv] # must meet next challenge r.t. what happned before. must think what might happen. counterfactuals hard to sell. [m232 anl] # esp in good times, bias towards .... # in long history of ... scandal, oscillated btw ligh and heavy touch regulaton. too many participants felt irresponsible [m233 jur[. - became the norm [m234 soc,pis]. complying withletter but not spirit of law. # combine public with private standrads. [m235 soc] # lessons of crisis: large bonuses for shortterm returns encgd [m236 pis expecations]. now pay delay for 7 yaers. reinforce responsibility [m237 jur] for longer term consequences. snr managers become more solidarity. many banks done this, but will all traders absorb their meaning? # know what constitues a true market. [m238 econ kernel] # Codes little use if nobody reads them [m239 lng]. Senior managers [] helps this. but integrity must come from within and grounded in values [m240 values] [=== DOOYEWEERD ASPECTS] # conveys responsibilities, whom does finance serve: itself or society [m241 idolatry, one asp]. to whom is the financier responsible, herself or the sytem? [=== RESPONSIBILITY; GHU] [m242 jur] # promotong ethical bz. financiers to be seen as custodians of their institutions, passing them on better. [m243 jur custodians] # but memories fade, complacency set in [m207][m210]. be vilgilant. resist the ... # esp from cyber to crypto. # 3 lies. [m211] # central banks to be lenders not buyers of last resort. # prudence. [=== DOOYEWEERD ECONOMIC ASPECT'S KERNEL] [m244 EconAsp] # while authorities must get mkts work # physics wont save finacce; ... will. ------------- questions Lecture 2 q: g20 reforms. tinkering? [q201] A: disagree. central to our prospetity. challenge: mkts move to extremes. [m245 aes] Q: A: : alastair darling: problem is that collective memory is lost. Q: how close from total collapse A: 3 hours. RBS would collapse this afternoon. Q AD: crucial to our efforts, international cooperation then. but world today more nationalistic? how you see it? A: praised AD. uk came with comprehensive plan that becoame g7 plan. but more difficult now. cos less intl collab [m243 soc]. if there is no prospect of intl coopn, you have to erect big walls. false sense of independence. Q: dierdre mckusky. prof. vocation of the banker [q203 pis vocation]. weber science and politics as vocation, an internal ethical control over ones bhv. if financial arrangements are uncertain and involve occasional e.g. Covid-19, is it plausable to go to smooth economy. A: ... Q: jennifer oneill. what does mc think about sovereign debt [q204] A: a necessary response, but need to emerge with direcion. A: helena [], yes break cycle need cultural change. but since then, so many scandals. the woodford debacle, etc. but all lip service [q205]. does not greed still prevail [q206]? A: cultural change takes time [m247 time]. but some signs. the seniormost people are bearing the cost, cos 'you did not train and supervise your colleagues'. Q: but the nature of what we do: we need to get out and explain to the younger. [q207 soc, lng] lord jim oneill. (worked for goldman sacks as chief econ. predicted 5 of the last 3 recessions [q208 unpredictability].) two sides not speak same lg. [economists, bankers?] Q, lrod jo: not physics but a social science. somehow must be driven into the, that there are no definitive outcomes [q209 unpredictability]. [=== DOOYEWEERD ASPECTS] be more humble [q209 eth] about definitive success. A: well said. there are many situations in which there are multiple equilibria. then: could there an intervention, then have some element of trust. humility to not assume determinisitic. --- next: how to calculate value, esp of human life. ----------------------- LECTURE 3 16 December 2020 l1 Moral l2 Credit l3 Covid From Covid Crisis to Renaissance Mark Carney # End of Feb 20 in Riad, last meeting of G20. Heads would warn of risks, but ministers would often appear [uninterested]. Few paid much attention when they not speak. But this day different. Covid-19 [m301]. Few were prepared for lockdown; none would recognise how life would eb transformed. [He Then Seemed To Go Through Various Economic Theories] Hobbes [m302], Leviathan: fundamental duty of state is to protect citizens from violence. Since then, other goals, incl protecting from pandemic. # creeping of the state [m303]. Last yr Jn SUmption: inordinate fear of death. # ... decisions based on human compassion r.t. [economic considerations] [m304] # govt control much greater. # staying at home is part of hobbesian bargain: obedience for protecton. # most people have supported lockdown and massive gov spending. much charity. # eagerness of ppl to help fellow citizens. [m305] [===GOOD in people] # incalculable ... # contagion # this social meme goes back to Adam Smith [m306]: not a finite resource to be conserved [m306] but a value that grows with use. [=== DOOYEWEERD'S ASPECTS: ECONOMIC KERNEL diffent from econ frugality] [m307 EconAsp and eth asp] # in uk, men in low-skilled jobs more likely to die of Covid-19. similarly for BAME [m307] # lockdown decimated hospitality [sector]. [m308] # Impact of Covid-19 [m309 bio] # unemployment affects the young etc. more [m310 soc] # inequalities coming. [m311 jur] # access to broadband; half of 1.5m children out of school had no access to internet. # the young will pay the prices,incl higher taxes later. [m312 soc, jur] # ... fairness and sust. # Black Monday 1987. Gerry x refused to close the market: cos then difficulty when opening it. # Important und relshp between value and values. [m313 Value, Values] # e.g. value of statistical life and CBA. estimated monetary cost of ill health etc. [m314 meas] # Petty [m315]: estimated population times avg national wealth times 20 years. # Insurance [m316]: on lost future earnings. # But shortcomings of that approach seen when approaching death. # Intrinsic v replacement value e.g. pilots # Schelling [m317] shifted from those left behind to those ... Value not of death but of delaying death [m318]. e.g. wage premium for a dangerous job. # Canadian life worth 3.3-3.9 million dollars. uk £1.6m dept of tpt. # Values of statistical life or Adjusted Life Year [m314 meas]. Cost-benefit revolution. # This encgs clarity of decns. but is the clarity justified? [m319] 14.05 [for a bit the following is almost exact transcription] # Is it appropriate to apply it to such a complex issue as Covid-19? [m319] # To Schelling, the intangible qualities of life were not that different from other goods. Now, I disagree, and there are 4 reasons why the value of life is radically different. # 1. Unlike consumer goods, life is what economists term a non positional good; that no part of life's value stems from the ownership of comparable goods by others. [m318] # People support decisions that increase their life expectancy even if it increases life expectancy of others by more [=== SELFISHNESS: HUMAN SIN] Life /is/ different from Pepsi. # 2. Shelling's faith faith in wisdom of crowds questioned [m320 soc, pis]. Estimates on the value of life rely on views of human nature that are seldom if ever realistic. # Can the frailties of human behaviour be overcome by law of large numbers? The cost of pandemic preparedness was less than two days of lost output from the lockdown. What's more likely [rhetorical question]: that we radically increased our valuation of life this year, or that human frailties including present bias and confirmation bias meant that we under-invested in resilience as a society? [=== SIN]. 16.15 # 3. there are moral issues that transcend these methodological flaws [m321] ... [functional] ... all advocates of herd immunity advocated shielding elderly - but what of socioeconomic groups that are more likely to catch the disease? The path to herd immunity runs directly through the inequalities in society. # 4. Monetising life ends up trivialising the very values that make it worth taking the decisions in the first place. [m322 nonmon]. can corrode. # As ... [] into distance. 1 2 3 unequal impact of pandemic [m323 jur,bio] ... non-treatment of other diseases became increasingly apparent. these cannot be answered by CBA. CBA: hidden inequities # We must resist the siren call that "there is a tradeoff between economy and health" [m324] [===ASPECTUAL COHERENCE] [=== GHU] # People reluctant to spend or return to work. # Lesson that we need either control the virus or credibly lessen its impact on people's health. # So, How should we proceed? # Nick Stern and Tim Besley: The ideal is to define our core pps first before finding the most cost-effective interventions to achieve this goal [m325 sol]. Such cost-effectiveness analysis explicitly seeks to achieve society's values; whereas CBA (Cost Benefit Analysis), in the wrong hands, can help determine them. # During pandemic people prioritized solidarity fairness and responsibility [m326 jur, soc aspects]. [=== Covid-19. GHU, DOOYEWEERD'S ASPECTS ] # This suggests that public policy should seek to minimize death etc. and buy time for development of vaccines etc. The costs of social distancing and the benefits of ... should be shared fairly. After these have been achieved, policy makers should seek to maximise benefits of welfare and minimise the threat of resurgence of the disease by selectively opening up. # The R number brings public health and economics together. 20.40 # A Strategic approach to cv is a combined approach to ... infection control etc. # paying attention to the impact of measures on fairness, social returns on education, intergenerational equity and economic dynamism. etc. ... [m327 jur] 21.12 [The following is exact wording, transcribed 14 January 2021] # In deciding which sectors of the economy to open and close policy makers must weigh up externaltiies [m328], in other words, the spillovers from one activity to another. There are classic economic externalities, such as when car production increases the demand for steel; there are also infection externalities, such as when the opening of one sector of the economy like hospitality increases the spread of the disease. [=== someone has pointed out that UK has a larger hospitality sector than other European countries and higher Covid-19 incidence. BLOATED economy [ab===]]. Policy-makers should restrict economic activities that have weak economic externalities but high infection externalities, and open, or even subsidise, those with low infection externalities and high and positive economic externalities. [m329] Obviously, the biggest challenges are in those areas that are essential economically but also highly risky from an infection perspective, like health care, essential travel and education [m330]. Legitimacy and fairness demand that we should take into account how the disease and the economic shocks hit different parts of society [m331]. As I have said, Covid affects the old more than the young [m332], it hammers industries prone to spreading the disease, like hospitality, while reinforcing the competitive advantages of those that do not, such as e-commerce, e-learning and e-health. This means that, alongside broad-based support programmes, we need ones targeted at specific sectors of the economy and segments of the population. This isn't about picking winners; it's a reaction to Covid choosing losers. In the same vein, fair access to healthcare is essential. If it's compromised, the bonds between the state and citizen will be undermined, and the consequence of that lower compliance, worse health and economic outcomes. And the same goes for perceived fairness in the privations experienced during lockdowns and social distancing. It cannot be one rule for the powerful and another for the rest [m333]. # Managing Covid is a dynamic process. Decisions taken early on when information was limited and fear, rampant, shouldn't be set in stone. Policies must be recalibrated with new developments, such as better testing, new therapeutics and the possibility of a vaccine change the risk profile of the disease. [m334] 09:25? # skills of workers ... technological change [m335 fmv] increasingly support workers jobs. # spend public money wisely [m336]. limited. more effective. move from redistribution to regeneration. [=== GHU]. [m337] # g20 will meet on zoom. # people rose to the occasion [m338 === GOOD in people]. solidarity. but deep strains in our society. # those deep inequalities # after decades of risks downloaded onto those invidituals. the bill has arrived. # deeper issue though these lects: moving from mkt econ to mkt society [m339 pis way of seeing things; idol]. this pandemic could reverse that, returning private values [m340]. # independent community not independent indivs. # when the war ... # how we address cc will be The test of these values. cos cc is global. we can only do so if we act in advance # if we come together re Covid-19, we can do so re cc. ----- questions Q. Steve Baker, mp. Mark reminded. It's become the norm to issue debt and money out of nothing,. engc 'free lunch'. how will this create moral hazard of 'there is a free lunch'. [q301] A: Independent committees that make these decisions. QE Quantitative Easing [m341] they think is right thing to do. but depending on outlook ... e.g. take rental car - with insce I might be less careful. AA: is SB's worry that we cannot undiscover magic money tree? Q. Sophie Harman, prof intl politics. cv exposed care crisis in uk. how we build an econ that values care? [q302] A: ... nonpersonal way on elder generation. people started to respond to it [m342 === GOOD in people]. taking care of others even though not directly affected. so challenge: what do we do to [increase] care? tough issues around care have been dodged over last 10 ys. we have a window here: to address sust and care. [m343] Q> Cas. putting econ before health in USA [q303]. international repercussions. MC: (a) US econ will be weaker in 6 months than it would have been [m343 inter-asp] (b) global response has not been up to task, because of indifference by USA, so weaker econs. there is a human element and disease element. The longer Covid-19 roams the world, the more likely it is to evolve. [Is that what we are seeing in 15 January 2021 with the Kent, South Afica and Brazilian versions of Covid-19?] Q: How do we get businesses not only to survive but thrive? How do we help businesses invest at this time when uncertainty is so great? [q304] MC: ... What is the economy; broad online jobs; sust. Hydrogen economy and low carbon. [m344 green jobs] # Now is the time when these decisions need to be taken - and they are not all spending decisions, they are regulatory decisions. [m345 kairos] AA: Talk about individuals now: Q Chris Naylor, Chief Exec of BmCityCcl. Structural inequalities revealed by cv. driving demand for sevices. appetite for public service reform ... fiscal restraint. frustration in being (un?)able to innovate services. we working in old models of public services [q305]. but not build from first principles. ... [q305 rethink] 44.13 MC: this crisis: an opportunity to reset [m346 rethink]. what do we value? How do we go about achieving it? [=== Covid-19: see my page ] # Given the solidarity that has been shown by citizens [=== Good in people]; how do we bring that in to the system and how do we maximize? Pull forward change that would happen anyway [m347]. elements of '4th industrial revolution' [m348]. [=== I have critiqued the Fourth Industrial Revolution. It is not 'the way ahead'] Whenever you have big technological shifts there are big impacts and they tend to exacerbate inequalities and you have to do massive retaining and retooling. [m349] AA: does this play out in Bm. CN: We need to think from first principles of root causes of why they are coming into our services, rather than dealing with the presenting need. That is the big service reform challenge. Kings Fund say that 60% are preventable conditions for which there is no cure. We cannot continue to operate in that way. Must invest in those preventative measures - requires solidarity and proximity with people. Requires reform. That agenda has been brought into sharper relief and needs to be speeded up in years to come. What I don't see is the political imperative from the top, recognising that's the context we are in. [=== RETHINK, REWIRE]. need new models of public services. [q305 rethink] AA: NICE depends on measuring. If we don't measure, then surely the saddest face on the poster is the one that gets the investment. [q306] MC: Yes, everything does have its place. It works for specific decisions about marginal treatments, esp. with scarce resources. But at the societal-wide level it is inappropriate. [m350] # And I don't think it works, because there is no evidence of a economy-health tradeoff [m351]. Once you let the disease get out of control, citizens react, because you have sold a false promise [m352] on economic performance. # Not particularly impressed by the methodology of NICE. [m353] 49.00 Q> Paul Krugman, Prof econ City Univ, NY. argue me out of the pessimism I'm feeling right now. Beyond Covid-19 to climate change. For climate change we need to get beyond individual self-nterest to collective interest [q307: ethical asp]. Climate change (cc), the effects of individual actions are very diffuse, widespread, and the time-horizon is very long. [q308]. But now Covid-19 is everything climate is not. Can link effects to specific events; timescale is weeks not decades; short term and focus on individual [q309]. If we can't respond properly to this short-term crisis, what hope is that we will be able to do the right thing for the even bigger crisis that is climate change? [q310] [=== CC, ==== REVIVALS?] MC: 1. countries that had SARS etc. ... the Recency Effect. Pandemic preparedness (Asian). they were better prepared; their citizens more []. [m354] But we're not going to be able to self-isolate from climate. 2. Solidarity: Qn of where we going together. now 126 countries with net zero as target [m355 cc]. This is the direction we want to go as a society, not trading off climate against econ? what are the policies AA: has that made you more optimistic? PK: Funny thing about cc, the economics look more favourable than they ever have been, but the problems of special interest and politics [q311]. We see this in face of pandemic. Especially USA. [=== USA XNS; CC]. But some hope: Epicentre was ground zero was NY but NY is now safest because people took it seriously. Q. Luigi Sigales, prof, economist: Love your lectures and share your criticism of CBA. But in cv we face tradeoffs. With precautionary measures, we are trading off lives with either pleasure (e.g. arriving faster at a place), or money. How do you resolve these tradeoff in absence of CBA? [q312] MC: At high level. In some circumstances, we place one objective above others; c.f. flattening of values in Lect 1. e.g. in Covid-19 health is the highest value. in climate (Paul's pessimism) net zero is not a tradeoff; single paramount objective. Hard to do; goes against our instinct as economists, where we are used to monetising value, have values assigned and then calculating optimal outcomes as opposed to having a primary weighting on one element of that outcome. [m356] # Next lecture: climate change. ------------------ LECTURE 4 23 December 2020 From Climate Crisis To Real Prosperity AA: We need to re-prioritise [a401], from money to values [a402]. Out collective failure has led to a series of crises [a403]. Crisis of Values [a404]. Dr. Mark Carney: # These lectures began in the Glasgow of Adam Smith, ind revn, eclipse of moral sentiment [m401]. Will end in Glasgow in a years time - launch revolution of sust. # Holocene. Shattered. Anthropocene. Driven by frenzied activity of humans. [=== Human funtioning] [m402]. # Last 5 ys warmest on record. oceans 30 pc more acidic since ind rev. ... ice loss tripled inlast decade. extreme events. biblical is now commonplace. destroying entire habitats. human activity drivintg the 6th extinction. 100 times higher than natural ext\incton. [m403] # nature loss not financially valued [m404]. do initially downplayed. # now with cv crisis and ignoreing systemic risk, society placing more on sust. # must und first causes of crisis. [m405] # carbon budget [m406]. amount that can still be released before disastrous====. # net zero if not a slogan but an imperative of phsyics. # paris 2015. 1.5% [m403] # emissions must fall fall by 8% per year [m406]. end up 1 / 8 of grandparents carbon. # so far ... # urgency [m407] to reorient [m408] finacnial system to ... econ to achieve net zero. 09.08 # ... human frailties and flattening of values [m409]. # will fall on future generations [m410] # the sooner we act the lest costly it will be [m411] # wh have to value the future [m412]. # Market failures create The Tragedy of the Commons [m413]: undermine common good by ... e.g. depradations of common grazing lands, ... deforestation of the Amazon Rainforest # 2 solutions to ToC: property rights and pollution pricing. # The first is impossible on a global scale unless we enclose the whole world in the hands of a few landlords. [=== But we could see God as the landlord! ab36] # The second is essential. But carbon taxes have been applied only sparingly. only $3 per tonne . needed to be $75 per tonne. [m414] # While effective to assign a price to a scarce resource, we might well ask, "Why does somebody have to be paid not be a jerk?". # Companies knowingly on the path ininconsistent with netzero are like tek companies who say they pay all taxes due while employing complex offshore tax shelters to avoid any taxes due at all. [m415] # 3rd issue: Flattening of values [m409]: we've been trading off planet against profit living for today and leaving it to others to pay tomorrow. [m416] # Nobel Economist Elenor åstrom. Communities cooperate to manage scarce resource [m417]. cop26 is about bringing companies, countries together [m418] to manage our global ecosys # if society sets a clear goal it will be profitable to be part of the solution and costly to be part of the problem. [m419] # society's values being redefined. commitment can replace complacency [m419]; urgency can become opportunity [m420] # enormous opportunity. involve every company in every sector. # Will be capital intensive. # will be job-heavy when unemploy soaring. # what the world needs for the future. 12.27 # 3 challenges » engineering (and technological innovation) [m421] » political. [m422] » financial [m423] # engineering: # turn everying green (transport, housing, etc.). - with time, scale and massive investment [m424] # however we don't have commerciall technology to .. emisions. sust aviation fuels. # technology innov. hydrogen. ccs, sustainable aviation fuels. # But to some calling for further technological breakthroughs is a counsel of despair. [m425] # But to innovators these challenges give opportunity. [m426] # speed and scale will be critical. e.g. Bill Gates technological investment into Breakthrough Energy Fund. # the more govs commitment to net zero, the more investment # politics. [m422] # over 126 contries set net zero tgts. momentum is building but even more is required [m427] # just over a year ago, sat in UN assembly. entered room feeling good about ourselves. then the following words: "you've stolen my dreams ... we are in the benginning of a mass extinction [m428] but all you can talk about is money [m429] ... how dare you". Greta Thunberg. clarity of youth. # social movements that she started. # plans for 2.8 4 that they dont even meet # financial system. 09.16. national commitments to net zero. reinforcing the hierarcy of values with net zero at its apex. [m430] # gained tracton. # views once on fringe become mainstream. [m431] # tim besley: similar could be at work over cc. can drive self-reinforcing cycles. [m434] [=== CAN but not will; too much optimism. HUMAN SIN]. 3. Finance [m423] # in this cx, finance can play a ... role. # the more ... focus on net zero, ... if not the easier it will be for investments and savings to shift. [m435] # this is how values drive value. [m436] # CC is as much of a determinant of a company's ... so that value reflects values. # To bring climate risk and opportunities into the heart of decision-making requires 3 Rs. # 1. Reporting: how we measure value [=== MEDIA]. [m437] # A common cause to the three crists [m438]: credit, covid and climate is how we measure value. # Past crises have usually forced improvements on how companies measure the risk we face. So, following wall st crash, 1929 standardised accounting practices / reporting rates. [m439] Similarly ten years ago ... # Since what gets measured gets managed [m440], every major company should disclose how cc affects its current bz and could affect its strategies. [m441] 19.28 # TCFD [m442] is the gold standard for such reporting, 150 trillion dollars assets. time for G20 to make TCFD mandatory. UK announced it would lead the way. # 2. Risk Management must be transformed. [m443] # Past not good predictor of the future; tipping points: suddenly get lot worse in a lot of places at same time ... [m444] # As climate risks will affect every sector of the economy, the financial system cannot diversify out of them [m445] # Must undertand the cce they are managing ... developing strategies for managing them down. # ... down to net zero # 3. Returns. [m446] # Addressing cc is about delivering what society values. [m447] # So the transition to green economy could be the greatest commercial opportunity [m448] of all time. # ... increasingly through the lens of climate [m449]. # Which companies are on right and wrong side of history? Which companies have green momentum? "climate roadkill". [m450] # Need to mobilise mainstream finance to help all companies get onstream to net zero. [m451] # Today investors had a say on pay; they should also have a say on transition; specifically a vote on whether companies are taking necessary steps. [m452] # This will embed a critical link between accountability and responsibility. [=== responsibility] [m453] ... financial system as a whole is funding 3.0 degrees up [m453]. exposing this gap should help==== 22.46 # signs that increased focus on sustainably is already shifting market values. e.g. renewable energy exceed fossil fuel incombents [m454] # the more they do, they will change the engineering, and the more this happens, this doesn't just make the weather but changes the climate. [m455] # need 50 shades of green [not just one thing, not just pure green]. [m456] # to conserve their carbon budgets companies will seek to meet their targets through a combination of carbon reduction and carbon offsetting, including switch from brown to green power # to unlock that market (100 bn$ / year) we need infrastructure [m457] [=== INFRASTRUCTURE: we need to better understand the proper role of infrastructure and what it makes possible and what it does not.] # ... infrastructure to connect demand from companies with netzero goals with supply of offsets from around the world. New private sector task force on this led by Bill Winters is working to get this ready for cop26 summit [m458] # Ultimately, private sector action needs effective public policies, including taxes, targeted investments in emerging sectors, and also needs new rules include new mandates for cleaner energy and energy efficiency. [m459] # The more credible and predictable climate policies are, companies will increasingly anticipate future measures and start adjusting today. [=== MUTUAL TRUST AND RESPECT BETWEEN PUBLIC AND PRIVATE SECTORS] # solutions to c.crisis are tied to fiscal economic and social wellbeing. [=== DOOYEWEERD'S ASPECTS] 25.05 # We need to leverage social coalitions that formed for climate action. [m460] # but those coalitions wont hold if we don't have a just transition. Cannot achieve environmental sustainability if we sacrifice our economy and with it people's livelihoods. [m461] # We devise all the necessary solutions or implement them with sufficient speed without market forces 25.30 # Suggestions: # 1. if you work for a company, find out if it has a plan for transition to net zero; [m462] # if so, great - How can it be made better # if it doesnt have a plan, ask why not. # 2. wherever you put savings and investment. Find out if it is being invested towards netzero and, if not, why not. Make your money matter. [m463] # 3. ask not what the climate is doing to your country but what your country can do for the climate. Does your country have a netzero plan? Does your government require large companies to disclose the climate impact of their operations? [m464] # do shareholders have automatic vote on these plans # Are banks planning for climate failure? And do they know how they can contribute to climate success? --- MC's SUMMARY - OVERVIEW [The following transcribes exactly what Mark Carney said] "The power of Greta Thunberg's message is how she drives home the remoreseless logic of climate physics and the fundamental unfairness of the climate crisis. And like many I'm persuaded by the force of her arguments and her demands for inter-generational justice [m465]. We do diverge however on how to solve this immense problem. As these lectures have argued, the market is not /the/ answer to everything but it can play a critical role in solving many of humanity's greatest challenges. [m466] We won't get to net zero without innovation, investment and profit. Continued growth isn't a fairy tale; it's a necessity [m467]. But not just any growth. The power of the market must be directed to achieving what society wants. That requires measures of income and welfare that reflect our values. We need a world where we're no longer solely guided by measures like GDP, that were devised a century ago when the earth seemed immortal and the social norms of the market felt immutable. [=== GDP, gunton Valuing without measuring, etc.] [m468] A market in the transition to netzero [m469] is now being built on these foundations of reporting, risk management and returns. It's funding initiatives and innovations of the private sector, and it can amplify the effectiveness of climate policies of governments, and accelerate the transition to that low-carbon economy. It's turning an existential risk into one of the greatest commercial opptunities of our time. [=== climate and environmental responsibility as OPPORTUNITY for bz] And it's now within our grasp to create a virtuous cycle [m470] of innovation and investment for the netzero world that people are demanding and that future generations deserve [m471]. In this way private finance can bend the arc of history towards climate justice [m472]. Value can serve values. Moral sentiments can rebalance market sentiments. And the glasgow of COP26 can be reunited with the glasgow of Adam Smith. Thank you very much. " [AB: It seems to me that yes he was over-optimistic about what could happen. But I find his lectures useful, in that they spell out quite thoughtfully and authoritatively how business and governments could work together to reach netzero targets - the How not just the Ought. After his lecture, businesses, financiers and investors especially have no excuse that they did not know what to do. ] ----- questions AA: people want to save planet but they want to fly. [q404] MC: political consensus has formed [m473]. legislative objv is net zerr. more general understanding of whats reqd. there will be inidividual decisions not consistent with netzero but not climate versus econ but econ organised to climate. [m474] AA: yes but, short term election cycle. green window dressing? [q405] MC: no. GWD devalue views of millions of people. [=== the GOOD IN PEOPLE] [m475] [=== ROLE OF BUSINESS: bz people want to act; they want govs to set ambitious goals, rather than to pander to bzs that fear to act like aviation and the car industry. ] [=== our whole approach to the RELATIONSHIP BETWEEN POLITICS/GOVERNMENT AND BUSINESS/ECONOMY IS WRONG.] # Gail Bradbrook XR. absolute emergency. frankly already too late [q406] for some world. been told repeatedly that econ can supply answers . is it not time to include other voices. would you support in principel a global citizens assembly [q407] to ... [=== her IDOL, her sole solution; HUMAN SIN will make that ineffective]. MC: my view is that in order to shift the econ ... make the necessary innovation. transparency ... In don't think a GCA will ... though it will have a ... [m476] MC: growth is determined by our values. [=== DOOYEWEERD'S ASPECTS, VALUES] [m477] Neil Fergusson, Historian: ... L/Momberg 'False Alarm' book. Greta called for immediate but that wreck the econ [q408]. China built more coal burning power stations this year than all in USA. If China not constrained, ... [q409] MC: I havent read his book, his book is a classic econ approach [m478] which i reject. China: you could have mentioned china biggest NF: china the big one. until china changes [there's little point in us doing anything] [=== IRRESPONSIBILITY of Neil Fergusson; he seems fixated on China and in resisting calls to take responsibility] ! xx: world emissions sitll rising. How do we get the reducion [q410] MC: realign the financial sector [m479]. keep asking [m480] companies whether they have a plan. its ultimately peopls savings: asking whether their savings .. xx nigeria: climate change affect Nigeria [q411]. G20 countries responsible for 80%, so Responsibility to change [q412]. How can financial industry help. MC: agree that there is a responsibility [m481]. 2. african development bank [m482]. 3. there are ways of making sure companies global have to sort out cc, invst in these countries [m483]. David King: I am extremely worried [q413]. optimism rapidly melting away. melting of poles passed tipping point. look ahead to 2050. Countries like vietnam so frequently flooded, and bangladesh, mumbai, that they will become [unlivable in]. so we also have to learn how to remove carbon at scale. MC: 1. ... buying time [m484]. 2. direct air capture will be necessary [m485]. XX.: what are we going to do with MC? your end destination will have to be poltiics. [q414] MC: ... many solutions. hopefully i'll still be involved. focus on doing what we can for COP. [MC refused to rule anything in or out] [=== DOOYEWEERD'S ASPECTS might help us understand the role of the many solutions] [m486] ----------- end. ------------------ COLLECTED COMMENTS BY AB The following collects together the comments I have made. 1. Concerning need to Rethink: === RETHINK, REWIRE. The need to rethink wealth, economy, etc. and even attitudes, aspirations, and rewire the structures of society. === BLOATED: Our (western) economies are bloated, and it would be good to shrink them rather than seeking to restore GDP growth to what it was. But what do we shrink? This is answered by GHU: === GHU: "Good, Harmful, Useless": GDP and money flow as not things in themselves but as expressing and enabling and encouraging part of human human functioning, which may be good, harmful or useless. Implication: it would be good to shrink the GDP/economy that encourages Harmful, and it could be useful to shrink that which is Useless. c.f. HUMAN FUNCTIONING. === GDP. GDP as bad measure and even worse as a goal (as governments make it). Other better indicators. Or maybe even quantitative indicators are a wrong approach; c.g. Gunton et al. Ecosystem Valuing without measuring, etc. === About WESTERN MONEY AND DEVELOPING COUNTRIES. And how do we really reimburse Africa for the damage that we Europeans and Americans and Arabs have done over past centuries? === 100 year-old companies: Hypothesis that companies that began at start with an ethical motivation rather than just self-centred money-making tend to be those that lasted 100 yaers. Links to Dooyeweerd's aspects, that all aspects harmonise to yield Shalom, so ethical aspect actually helps economic aspect in long term and it is false that "being ethical jeopardises company success". === Covid-19. Things we learned from the pandemic. === CC. About climate change; climate and environmental responsibility. === MEDIA. The role of the media in promoting and spreading certain views, values, etc. and not just information. === HOW GOVERNMENTS SEE THEMSELVES (their pistic functioning). Many current governments see themselves as in competition with other governments w.r.t. GDP and other measures. So they pander to those long-established market sectors that want to protect themselves and have easy lives. e.g. aviation, roads. Our whole approach to the RELATIONSHIP BETWEEN POLITICS/GOVERNMENT AND BUSINESS/ECONOMY IS WRONG. 2. Concerning Dooyeweerd and Reformational thought: === Dooyeweerd's aspects: the relevance of Dooyeweerd's aspects to understanding and maybe guiding the field and practice. Helps us separate out those things that are irreducible to each other and can make distinct contributions that ought not to be overlooked. === ECONOMIC KERNEL: Dooyeweerd believes the kernel meaning and norm of the economic aspect is not profit-making, nor maximising production, consumption or money, nor even production and consumption, but is it: FRUGALITY - careful management of that which is limited. And that reducing economics, finance or banking to any of the former is ultimately counterproductive and evil. Throughout these talks, bear this in mind. === HUMAN FUNTIONING. Money flow and GDP are only measures of a proportion of human functioning. It is human functioning that is important, not GDP or even the economy as such. The role of the economy in magnifying human functioning through resourcing it carefully. Human functioning is Good, Harmful and/or Useless; c.f. GHU. 3. Concerning Christian things === ROLE OF NON-CHRISTIANS in God's plan. More than just potential for salvation; have some other role to play within Creational order, and which Christians can work with. === OBEDIENCE rather than plans. This is something I picked up from Paul Marshall 'Thine is the Kingdon'. or Walsh and Middleton, Transforming Vision, or maybe some other book, that the way to a successful future is not only or even to formulate plans and goals, but is obedience to Law, where Law is the fundamental principles that God has woven into Creation. === REVIVALS. This refers to the idea that spiritual revivals change people's hearts and because they are widespread they change the way society operates. My favourite examples are the Wesleyan, the abolition of the the slave trade, and the Welsh revival. The latter changed people's behaviour within 2 months, thought he others took longer. I see this as the only answer to despair. And it is one answer. We need to plead with God. === HUMAN SIN. The importance of taking human sin into account. Helps us understand better why things failed, and especially why we went and go wrong. Helps prevent going up dead ends based on ungrounded optimism. e.g. relying solely on government, businesses or on individual action or anything else; all are infected with human sin. Including SELFISHNESS (dysfunction in the ethical aspect) === the GOOD IN PEOPLE. There is a tendency to demonize certain groups or types of people. But even they have some good. This needs to be recognised, alongside human sin. Beware demonizing. === IDOLATRY. When we treat something as of overriding importance, to which other things may be sacrificed. e.g. GDP and 'the economy' or national place in league tables, or personal convenience or pleasure. Or we latch onto something as our sole solution; c.f. HUMAN SIN will make that ineffective. === USA XNS. Many (vocal) evangelical Christians in the USA are, it seems to me, following things other than Christ, and are misrepresenting Christ in and to the world. I wonder whether God is removing the special status of the USA, because of this, in the way he exiled Israel and Judah 2500 years ago. 4. Charting the Way Forward === INFRASTRUCTURE: we need to better understand the proper role of infrastructure and what it makes possible and what it does not. === RESPONSIBILITY: the importance of responsibility in the financial system. And in politicians. And especially in individuals. And especially in opinion-forming individuals and other leaders and voices. e.g. Neil Fergusson, who seems fixated on China and in resisting calls for us to take responsibility. === OPPORTUNITY: climate and environmental responsibility as OPPORTUNITY for business (bz) === ROLE OF BUSINESS bz people want to act; they want govs to set ambitious goals, rather than to pander to business that fear to act like aviation and the car industry. This has to do with how GOVERNMENTS SEE THEMSELVES (their pistic functioning). === MUTUAL TRUST AND RESPECT BETWEEN PUBLIC AND PRIVATE SECTORS This is pistic and ethical functioning: beliefs and attitudes.