LSE Events | Pessimism and the State of the World

the opening night of the LSE festival new which is taking place all week through Saturday my name is Peter true boots I'm the head of the department of international relations and the director of the u.s. Center at the LSE so over the course of the week the festival is bringing together global thinkers to consider the big challenges that society faces today and crucially how the social sciences might help us begin to tackle them we're living in an age of insecurity where the values of liberal democracy liberal economies and a rules-based international system are being challenged and tonight we're going to focus on one important dimension of this phenomena the mounting discontent and deepening pessimism about the future especially but not only among the advanced democracies of the West what explains it and what can be done about it and we have two terrific speakers tonight to help us begin the process of thinking through these very large questions they include the LSE director minutia theek who has spent most of her career straddling the worlds of Public Policy and academia previously working at the World Bank the IMF and the Bank of England and Andres Velasco the Dean of the LLC's new School of Public Policy and a former Minister of Finance in Chile unfortunately Stephanie Flanders who is on the on the schedule on the program is unable to join us tonight but we're in very good hands here I think tonight's panel discussion also is part of a I don't know like a social science experiment we do those here at the LSE to see how a week-long discussion about developments across the globe make you feel about the future more optimistic and bullish more concerned and worried and you can join directly in this debate using the hashtag LSE festival and new world disorders and I know that the numbers are already going up on Facebook and on Twitter as well and that includes those of you who are watching this of course this event live streamed for those of you in the theater you may be wondering why the stewards gave you this keypad on entering it's not so you can kind of like check sports scores while we're going along here the idea is we're going to run a poll or do a survey at the end towards the conclusion of tonight's event - I don't know take your pulse on whether you're feeling more optimistic or pessimistic about about the future and then what's going to happen so this is really like a classic like a pretest and a post-test on Saturday they're going to do the same thing again in the concluding session and so I guess the intervention here are all these academics and global thinkers and so forth who are talking over the course of the week to see whether or not it moves the needle in one direction or the other I'll say a little bit more about this when we get to the towards the end of tonight and when we'll do the the poll and finally I think just one kind of public service message so this event is being recorded and hopefully it'll be available as a podcast that you know kind of depends on the quality of the production which means very few interruptions which means if you haven't already put your phone on silent please do that now and with that please join me in welcoming LSE director [Applause] [Music] [Applause] [Music] good evening everyone but I wanted to ask this evening is why are people in some of the richest and most successful countries in the world so pessimistic when so much of the economic social and political data shows that things are getting better and where did all that anger and anxiety come from that manifests itself in populism terrorism worsening well-being and mental health so I'm gonna ask three questions first his pessimism widespread despite these improvements second what are the causes of pessimism and I'm gonna focus on two the changing nature of the media and fears about the future both economic and political and third I'm gonna ask why is pessimism a problem and what can we do about it I'm not gonna spend a lot of time this evening on the easy part of the story which is that things have gotten hugely better the evidence on the massive improvement in the human state is is widely available probably the two authors who've done the most to compile that evidence are the American psychologist Steven Pinker and the Swedish statistician Hans Rosling and you read their books and you cannot help but feel optimistic about how well we have done we are richer healthier safer and then at any time in human history the historian Ivar Hariri has said in the early 21st century for the first time in human history more people die from eating too much than eating too little and for the first time more people commit suicide than all the people who die from that are killed by war crime and terrorism what an extraordinary state of the world but all those of data and publications that demonstrate this massive human progress in recent decades have done very little to shift public opinion which is characterized in certainly in the advanced economies by what I call a decline narrative now clearly not everyone has benefited from this human progress it's been unevenly distributed but setting aside the issue about relative benefits there is no doubt that over the last century human the human state has massively improved and what I want to focus on this evening is not the objective improvements but on the subjective perceptions of what has happened and what that has done to our societies so let me give you some evidence around why pessimism is rampant so here are just a few examples most people in the UK in fact eighty eight percent of people in the UK if you ask them will tell you that global poverty has increased even though in the last three decades we witnessed the sharpest decline in global poverty ever witnessed in human history when people around the world are asked about what's the murder rate in your country or how many people have died from terrorism or how many teenage girls get pregnant they invariably provide an estimate that is incorrect and is overly pessimistic and some countries are particularly overly pessimistic so South Africa takes the prize followed by Brazil and the Philippines Peru and then India and as always the countries in which are the least overly pessimistic and have the narrowest misperceptions on these kinds of questions are the happy scan Dee's the Sweden Norway and Denmark who are most Clerk get guests the most closely to reality on these kinds of questions in surveys when people are asked whether the next generation will be better off then they are better off than their parents there's a very clear pattern in the advanced economies like the u.s. almost all the European countries and Japan most people think their children will be worse off than their parents in most developing and emerging copy countries the vast majority if you look across Africa Asia Latin America think their children will be better off than their parents and in a recent survey in eight countries which was brought to my attention by a colleague here at the LSC Terry Patterson found that 61% of people felt more insecure as a result of global risks today and climate change was identified as a global catastrophic risk by 48% of people and an additional 36 percent tended to agree with climate change being a catastrophic risk so those are all I think good examples of where pessimism is rampant despite the fact that things have got better what are the causes of this essence but illness is going to talk a lot about the differences between local and individual views and national and global views I'm gonna focus on two things first the changing media landscape and how we get our information and second fears about the future let me start with the media now there is there is no doubt that part of the pessimism is because people get their local information about myself my community through their lived experience and they get their national and global information mediated through the media and if you look at trends in media coverage over time it has clearly got more negative there's an interesting piece of work which uses a technique called sentiment mining and they look at every newspaper article in The New York Times from 1945 to 2005 and then they do a similar exercise looking at all articles that have been translated into English in a hundred and thirty countries from 1979 to 2010 and the pattern is very clear and it's sentiment mining the what they look for is how often do these articles use positive words like good or nice and how often do they use negative words like horrific or terrible very clear pattern over the last decades the tone of the media has got more negative and that's true across countries now of course social media with its competition for cliques has only accelerated this trend it has exacerbated the tendency for people to ignore long term trends of improvement and they end up paying much more attention to sudden bad events and when they get Austin surveys about the state of the world these dramatic sudden events loom large in how they answer the question let me turn to the second explanation which is the fear about future prospects now when people feel the future fear of the future they aren't very comforted by the fact that they are living better than their ancestors and so the fact that things have gotten past doesn't provide them much succor and those fears are grounded not just a current experience of things like low wages and precarious work but also on the impact of technology will have on future jobs and the place of their nation in the wider world so let me say something about each of those first economic prospects and then more the kind of political position of your country now on economic prospects we know that automation will mean that about half of jobs that are routine and repetitive will be automated and we know that hundreds of millions of workers are likely to be displaced by this transition there's also a further risk of further bifurcation of labor markets and so if you look for example at the US Bureau of Labor Statistics they predict that for every new highly paid jobs that were job that will appear in software development there will be six new low paid jobs in the care sector and so people are very worried about where they will end up in terms of future employment and compounding that anxiety about technology and what we will do to economic prospects is the rise of precarious work at low wages with minimal benefits and while some find benefits from these flexible arrangements many people experience serious economic insecurity and many young people experience what is now called a stage of prolonged adolescence which means sleeping on the sofa at home having little prospect for actually saving enough to make a deposit and own your own home and almost never having a pension and we know from research that precarious employment reduces both physical and mental health and individuals lose a sense of agency over their own lives so even though we're living in a period of unprecedented wealth many people look to the future with trepidation and fear let me turn to the fear about the political future now this decline is narrative is partly a product of the fact that the West has dominated the world for the last 400 years and people in the West are adjusting to the fact that the future is likely to be dominated by the East now this decline is omission in the UK does a particularly long tradition with the fall of the empire dean Atchinson had that famous quote that Britain that the British have lost an empire and not yet found a role and it has been the kind of dominant theme of UK foreign policy probably for the last century for the u.s. decline ISM is a relatively new thing there were episodes when the US was panicked about Japan dominating the world and dominating the world economy and of course the Soviet Union was a strategic rival for the cult during the period of the Cold War but I think in that respect we look back and given the Soviet Union's economic vulnerabilities it's seen as a little bit of a paper tiger I think the rise of China presents a whole new different strategic challenge to the US and the West focusing much more on technological competition the geopolitical positioning of China and the fact that China represents an alternative economic model let's call it authoritarian state capitalism which presents a real competitor to the prevailing model of liberal democracies and liberal economies the problem though with this decline is narrative is that it focuses on relative progress rather than absolute progress so just because China is getting mean the u.s. is getting poorer in fact as any economist who understands the games from trade will tell you the reason the US continues to get richer is because its trading partners like China are getting wealthier but it's this confusion between absolute and relative that that I think fuels this decline esteem ISM and of course there are very legitimate issues around fair access to markets in China and protection of intellectual property and of course one has to sort those out because they're key for making sure that relative decline is still associated with absolute gains for everyone now let me turn to why is pessimism a problem and what needs to be what can be done about it well pessimism is a problem because it's based on false assumptions it can distort politics and policies people in your country think that terrorism is a huge problem you will spend huge amounts of money on scanners and screening and all sorts of anti terrorism message which which might be actually a complete waste of resources secondly pessimism fuels support for populist leaders who often use nostalgia politics and fear of the future to scare people into supporting them and finally studies have actually found that optimism is good for your health mm-hmm there's been some very interesting piece of work by Bowman kubatski who reviewed over 200 medical research articles which found that a positive psychological outlook reduces your risk of cardiovascular illness by 50% so it's really significant so what can be done to address this pessimism crisis in the advanced economies let me say something about the media and then something about restoring confidence in the future on the media I know the conventional wisdom is good news isn't news it's the the tendency of the media to to focus on bad news is the way they sell is the way they sell I was going to say newspapers but they don't sell newspapers the way they sell they sell clicks attention and coverage I think we have to ask ourselves is there a way to get greater context and balance and I think you know if you if you look at the polling data today coming all the Edelman Trust Barometer the media including social media is now the least trusted institution in our societies less trusted than government politicians less trusted than business less trusted than any other institution in our society and I do think we're at a moment when we need to rethink the role of the media and we might be on the cusp of a position where people all do want to see greater regulation of fake news greater responsibility of platforms for what they post online I for one would strongly support such a shift because I think we've reached a stage where the current state of pessimism and distrust has actually become a huge problem for both our democracies and our economies let me say something about restoring confidence in people's economic prospects and here I think there's a very clear and tractable agenda in order to have a successful transition that technology will force on our societies we need to facilitate the transition of workers to new jobs and for this to be successful workers need to they will be invested in that societies will invest in new skills so that they could cope with the impact of automation and and and machine learning on the job market unfortunately if you look today across the OECD spending on worker retraining has actually fallen steadily and we we must reverse that that is clearly not sensible given the huge change in labor markets that we are about to face we're over giving part-time and temporary workers access to benefits and part-time and temporary workers tend to be lower skilled and lower paid giving them rights to pensions to pay leave to training as has been done in some countries like Germany Denmark and the Netherlands we'll do a huge amount to restore a sense of security and optimism for those people and people need to know that if they fall on hard times there will be a social safety net to catch them policymakers also needs to make well-being that more central to the way we think about our priorities at the LSE we have quite a few people working on issues about how well-being can shape economic priorities people like Richard Laird and Paul Dolan and not surprisingly mental health is at the core of that agenda but so is fostering a sense of community and sustaining relationships finally let me say something about politics and giving people more of a sense of control psychological research by settlement points to a link between a sense of control and optimism and I think we can all relate to that finding when we feel that our lives are out of control we feel stressed and sad and when we have a greater sense of control we feel happy healthier and more optimistic about the future that's why the slogan the brexit slogan take back control was so clever because it appealed to that to that fear and it provided people a sense if there's a solution to the fact that I feel my life is out of control it also helps explain why we can be individually optimistic and naturally pessimistic because we're more likely to have a sense of control over our individual lives but it feels very hard especially these days to feel any sense of control of what's happening in the country or in the world I'm increasingly of the view that decentralization is part of the solution to give people a sense of more local control more local power gives people more a sense of control and autonomy of things that directly affect their lives it's where people experience democracy most closely it's where they have a better perception of local services like schools and local politicians if you ask people how's your local MP otherís pretty good Gaston what do you think of Parliament as rubbish how's your local teacher this is pretty good my kids are happy how would you think what do you think about education this country is rubbish so that bringing things more local I think is part of the solution it also provides you a way to potentially accommodate more local preferences just as an example that we've been debating recently if different parts of a country have very different views about immigrants why not give them different powers over how many immigrant workers they can have in their locality have geographically specific work permits so if London wants to have lots of immigrants that's okay if some other bit of the country doesn't well okay they can decide that if they want but that doesn't then that gives them a greater sense of local control just hypothesis I think the problem with decentralization to be honest is it's not a panacea it doesn't solve the problems that I think unrest is going to talk about now and it doesn't solve the fact that we have a democratic deficit at the supranational level many of the problems we need to solve are global and require global solutions and it's hard to see how decentralization is going to help us with that but perhaps that's something we can discuss [Applause] so chondros was too optimistic there are a few things more intellectually fashionable and pessimism if you're an academic you can build a career being a pessimist if you're a politician you can build several careers being a pessimist I used to be a politician I wasn't a pessimist now I'm here so I could be I could be a pessimist but I will not be and I want to begin with exactly the same emphasis as manoosh began the world is getting much better all the time think of the first fact Manoj quoted we are in the first decade in human history in which more people are having to die because of eaten too much than from having eaten too little that's an extraordinary fact obesity is in fact in the world today a bigger problem than starvation and there are million domains along which one can cite number after number and statistic after statistic to suggest that we're healthier we live longer and overall our quality of life has gone up and up and up if you don't believe me well you can believe somebody who has just written a marvelous book about it and that guy is my former colleague Steven Pinker leave this room log on go online and buy that book because you will feel much better Pinker is not only a great academic he's also an extraordinarily persuasive and skillful writer and he makes a very very strong case and that in fact the world is getting better now before we get too optimistic we should note that things may be getting better but they're not getting better at the same speed for everyone and forgive me if I quote another hybrid researcher guy called Raj Chetty from the Economics Department who's been doing amazing work with hard data trying to figure out how the fortunes of children fare compared to the fortunes of their parents we have lots of survey data in which people report oh yeah I'm doing better than my parents were worse than my parents but that's a self-reported data Chetty has actually compiled a pretty large data set in which he looks at objectively whether American children and this is only a data set for the US are doing better or worse than their parents and whether this mobility has gone up or down over time and when he finally finds is actually not that optimistic in the 1940s in fact his data goes back at the 1940s 90% of children were living better than their parents had lived a generation ago today that number is 50% so you can say from 90 to 50 that's a big drop on the other hand 50 is not so bad 50% of people even in this context of pessimism even in this context of recession even in a context of growing inequality are in fact not self reporting in fact living better than their parents why did we go according to charity from 90 to 50 some of it has to do with simply slower economic growth the u.s. is a rich country doesn't grow very much much less than it used to but some of the change also has to do with increasing inequality in fact he finds that you could go back not to 90 but to 70% if we had in the u.s. today the same distribution of income the US had back in 1940 so yes the world is getting better but not everybody's life is getting better and not everybody's life is getting better at the same time now there's a risk in this debate and the is that we could be guilty of angle centrism meaning a lot of the data and a lot of the papers and a lot of the studies come basically from the US or the UK and the US and the UK are two countries well in fact the income distribution has gone down economic growth is lower than it used to be and median wages are not doing quite as well as we're doing 10 20 and especially 40 or 50 years ago but it is very risky and I would argue completely wrong to extrapolate from the experience of these two countries to a globe to a more global phenomenon because if you're looking for the causes of populism you might be tempted to conclude that in all the other countries of the world where today we're seeing populism think of Brazil think of Italy Turkey the Philippines Hungary Poland just to name a few you might be tempted to say well they must be undergoing exactly the same economic problems as the US or the UK and therefore that is the cause of the problem well if you made that conjecture that conjecture would be plain wrong because what may be true of the very advanced economies in particular the economies of the North Atlantic is not at all true of emerging markets because emerging markets over the last 25 years have grown and grown and grown let me mention data for two of the countries that have recently gone populist one is Turkey and one the other one is the Philippines if you begin measuring at the time of the financial crisis a decade ago all the way until last year on average economic growth in Turkey was 6.9 percent per year and in the Philippines the number was 6.8% it wasn't quite as high in Hungary or Poland you would expect it to be the richer countries but on the whole many of the countries which in fact have gone populist where the politics is turned sour are countries in which economic performance unemployment performance waste performance has been very good indeed so it is very hard to conclude and in fact there is empirically wrong to conclude that there are a bunch of objective facts out there particularly economic facts that are driving people to this pessimism and if that is mostly and true for the UK's the UK and the US it is entirely untrue for the emerging markets so the narrative there has to be different now as you listen to me you could be thinking okay this guy's telling it that the world is doing fine so the world is doing fine why are we apparently so depressed and I want to take a different tack in answering than that question that manoosh did I agree with most of what she said but let me emphasize a slightly different bit when we say we're being pessimistic the question is pessimistic about what because I could be very pessimistic or optimistic about my own life and my family's prospects and I could be pessimistic about my neighborhood my city my region my country or the world and what is very striking about data all across the globe and this is truly not just a rich country phenomenon is that what people report about their own lives is almost always much more optimistic than what they report about the wider world in which they live let me give you three examples there's something called the euro barometer which measures sentiment across countries in the European Union the US people how is your own family economic situation and doing 60% of people saying is doing okay I expected to remain the same 20% say it is going up it isn't getting much better however if you ask people how is your countries or Europe's economic situation doing 60 percent report that is getting worse so if you're a statistician we have a problem here because presumably the country is nothing but the sum of all people and it turns out individuals are doing fine but the country is doing terrible this reminds me if you're any of you ever lived in the u.s. used to be a radio program by a guy called Tayler about a town in the Midwest it's idyllic beautiful pastoral community in which all children are always above average it seems that in Europe people's fortunes are in fact always above average now this is not just a European phenomenon I come from Chile in Chile there's a fairly serious poll at four times a year ask people how are you doing and then asks how is the country doing year after year after year while you're talking about income or wages or employment people always say oh my life my life is fine the country over the country is going to the dogs and not only is that gap persistent the gap has been getting much larger with time third example there's plenty of data mostly for Europe about what people perceive is going on with the environment and yes of course we have serious environmental problems but again you ask people what about the environment in your immediate community oh it's fine what about the nation terrible the world again going to the dogs which may or may not be true but it is puzzling it calls for explanation that what we feel about our own lives is very different than what we feel about the world at large and in fact this phenomenon has been studied it is not new and the hands Rose I'm sorry max Rosa whom a new site already Swedish economist who used to be at Oxford I gave it a name he talks about local optimism and national pessimism why this gap I'm not sure I have the answer so let me try a few hypotheses first hypothesis is simply that this did not begin yesterday there's a pretty broad academic literature in psychology that says our brains are hard-wired for optimism and this is a course of food of evolution back in the day when we were running around trying not to be eaten by large animals we had to be optimists you know if I felt that I was going to be eaten by a lion eight hours and I probably wouldn't have a pleasurable lives so your chances of survival are higher if you're an optimist I get up in the morning and I think I will not be consumed by a lion now what's the catch that this hardwiring for optimism operates at the local level at the individual level I will not be eaten by a lion as opposed to my fellow beings they could be so there could be something in our mental structure in our psychological structure that in fact account for this gap however that cannot be the full explanation because if the gap is getting larger you need to explain it by means of a variable that is also getting larger and our psychological makeup may change over millennia but it doesn't change over decades therefore that alone cannot be it so what are plausible explanations why is the gap not only there why is the gap getting large and here I think the two can there is one manoosh already mentioned the other one he mentioned in passing and I want to expand upon it the first potential villain in the room is of course the media and I say this with great hesitation because I'm a married to a journalist and every time I bring this up at dinner time I am on the losing side of the conversation so I will be careful with my words here but there is evidence that if you go and in fact try to correlate this gap in perceptions with people's exposure to the media that correlation is in fact in the data and quite strong that is the more you're exposed to the news media and in addition the more you're exposed to social media the more you think oh my life is fine however the world is not doing well so this is not just a conjecture there is some data to back this up and as men you said the very definition of the media is to be pessimistic Pinker has a wonderful line in his book he says you have never turned the television set and found the reporter in a faraway land who says I am reporting from a country where war has not broken out nice ah you never say that if a wall is not broken out that's no news I say this was surprising my wife tells me it's absolutely obvious and she quotes the old adage at me if it bleeds it leads clearly good news I used to be a minister in the government in Chile I learned that whenever you had good news nobody paid attention if you had a crisis believe me the press were here they were there listening to you so yes there's some element of media influence I was going to say distortion but I will reclaim some media influence in fact in explaining this gap what it is that you do about it what is the policy implication of our observation I will confess I am Not sure yes there are issues of fake news no question about it there are issues of misrepresentation no question about it to what extent public policy can affect that I will be perfectly honest with you I am not completely sure at all and I'll be glad to engage in that question in the Q&A session but before I stop I want to bring up one other issue which in my mind is absolutely key and that is politics the other striking fact when you ask people about their perceptions of the world is how their esteem of politics has come down massively the issue of lack of trust in politicians and lack of trust in government and most worryingly of lack of trust in democracy is absolutely widespread a few weeks ago in this very same room we had a visitor a guy called Yasha monk who wrote a very good book called the people against democracy again a good leading recommendation for the weekend this book is filled with survey data of you know reporting simply that I don't trust my politicians the parties in my country the Congress and my party the cabinet the president I don't really trust anybody that is true of rich countries of poor countries of developed countries of emerging countries and it is particularly striking the degree to which the valuation of democracy has gone down in countries which only recovered or in some cases game democracy are very short while ago 20-25 years ago if you were polish or Hungarian or Czech or a viewer Brazilian Argentina Chilean you were just in the process of regaining democracy and democracy as a no professor of mine put it was the only game in town it was the thing that we were all very proud of today you are resilient do you trust your democracy 9 percent of Brazilians report trusting their democracy if you ask Mexicans the numbers 16 the two largest country in Latin America neither one of them has one person out of five reporting that they trust democracy how is this connected to the issue of local versus national pessimism well I think quite simple if I know my circumstances are okay but I don't trust the government and I am told by the media that country circumstances are terrible well I'm going to believe that because my prior my starting point is the government is no good the politicians are no good and therefore I am perfectly predisposed to believe anything that is bad about the country even though I know that in my life things are not quite as bad as people are reporting out there what's the policy implication of this and I will finish well as James Carville famously put it it is the politics stupid and let me leave you with two suggestions the first one is simply political reform one reason why people don't trust politicians is that in many countries they turn on the TV and it's been the same guys and I say guys because it's mostly men on the tube for the last 20 30 or 40 years and therefore the renewal of the elites having a more transparent politics and more competitive politics a politics that is less captured by special interest and money is a first step not the end of the road but the beginning of the road in regaining trust the other thing that seems really essential to me is for liberal politicians and democratic politicians and model politicians to construct a narrative to rival the nerve of the populace for saying the world is terrible vote for me if you you know remember Trump's speech at the Democratic sorry what am I saying the Republican convention when he was nominated he described when I quote a nation plagued by poverty violence war and destruction wasn't quite something like the United States where I used to live and when confronted with that narrative of war and pestilence and destruction liberal politicians do not have a comparable narrative to oppose to that and I emphasize narrative because politicians are policymakers but are also explainers and the president is not simply the commander in chief a president is also an explainer in chief and a good politician or a good political movement is one which provides a coherent account of why we go through things that we go through and what the future will look like I think populist today are doing an admirable job of weaving together such a narrative Liberal Democratic politicians are not as long as they continue we continue to fail at that tax task the world will continue maybe to get better touchwood however the perceptions that we have of the world will continue to get worse and worse thank you very much [Applause] so I'm not feeling very optimistic so here I am I'm with two economists I'm a political scientist sports I have a question that before I open it up about causes I think you could probably get any a lot of questions about what are the remedies and and and and that is what we we should talk a lot about but on the causes I was struck you both mentioned the media and I think in different ways you both mentioned politics under as you directly in the form of kind of declining political trust that you see across the west and manoosh I think maybe on the issue of restoring confidence in the economy it's part of that is management of the economy and I wonder if some of this has to do with something that neither be focused on directly but I think maybe in some ways helps connect the story here and that's political parties and the decline of political parties I don't you know there's um there was a time I mean traditionally political parties right are seen as kind of transmission belts for aggregating up kind of local concerns and interests to the national level and generating a sense of I don't know collective purpose shared prosperity and you know it seems to me I mean I'm more familiar with the u.s. side of this but political parties for some time now have not been performing that function very well and there's been an erosion and in fact there's a very high correlation just separately the kind of Meza between political trust in partisanship an inverse relationship in the u.s. between those two things so as partisanship goes up political trust in like government doing the right thing goes down and so I wonder if some of this has to do with the failure of mainstream political parties to just do their job and I don't know I mean some thoughts reflections on that I feel a little shy about answering that question because again we're two economists and Peter's a political scientist so what do we know about political parties but you know I used to when I first enter politics there it was you know a technocrat I back then I did not belong to a political party so I often asked myself what are they for what function do political parties perform and I'm not sure I have the answer but I did learn two things one is [Music] it's connected to the last thing I said up there they provide an account or a narrative of what our country and our politics are about and an identity a word that we didn't use but which of course is very fashionable nowadays if you're a Democrat in the American Midwest and you belong to a union there was an account of what your life was like what your values were like and what were the things that you were fighting for maybe that account became obsolete the world changed but parties did provide that frame of reference with the decline of parties that frame of reference is gone the second thing parties to and Peter's not going to like this because I'm going to use the economist jargon to refer to a political phenomenon parties internalize the externalities every policy has a nice aspect that voters like but not so nice I think that voters may not like you know it has a bit of Sweden a bit of Spanish spinach and what political parties do is they say okay we realize that this bill or this law has you know a little sweet a little spinach well we will advertise the sweet and we will be emphasized the spinach because overall we think it's good for the country today because parties are so weak and politics is so fragmented everybody's keen to emphasize the spinach to the detriment of the swedes and you get the phenomenon we've been talking about so I think that's the analysis can we reconstitute political parties to play those roles I'm not sure I think political parties were strong when you had electoral systems that that forced people into parties increasingly that is not necessarily the case so where do we go from here I will defer to you I think we're a very interesting moment where traditionally political parties I mean I was thought of them as sort of intermediaries of public views but there's sort of two versions of that one is that I choose people to represent me whose values I share and then I trust their judgment on the policies they choose that is sort of you represent my values as opposed to you represent the aggregation of the views of the people who've joined this party in which case you really are a cipher you know you're you're not you're not being chosen to exercise your judgement and part of the problem we have at the moment and again this is probably the product of the huge rise in the use of polling by political parties to form their policies where they have become near aggregators of polls and you know one group pulls its members and they aggregate up the views and then another group pulls its members and aggregates up the views and this has all been facilitated by the rise of the Internet and the fact that aggregating up views has become very very easy and the role of values and judgment has disappeared and I can't help but believe that that's part of that's feeling part of this cynicism you know we've had some little experiments like the pirates party in Germany where they said we're going to crowdsource our policies we're going to go to our members and we're gonna basically say what kind of policies do you want and that's gonna be our platform and of course that failed miserably and in theory the rise of social media and the Internet should facilitate that kind of process and I think I think that tells us that that's not what people want actually what they want are leaders whose values they identify with and then have those leaders actually use their judgment to agree on a set of policies so I think what we'll do is we'll we'll open it up now we've got about well I've got to build in the poll so I think we have about a half an hour to work with here so what I'm going to do is I'll group questions take a few questions at a time and I would just ask you to make it a question very short to the point briefly introduced yourself and let's see I saw a hand over there we'll go right we'll start right there the gentleman and the set of black sweaters Yeah right there midway up my name is Malcolm Dean I'm a journalist it is on the Guardian though for the last 40 years I've been retired for 10 I agree with you about the negative approach of the media it's no wonder the public I think politicians are hopeless because of the way we treat politicians in the media but the pop to the other side is it's very important that politicians have able to hold them to account and the best papers do do that New York Times I've been in America and Washington Post we've been twinned with two other put quick points one is there are now seven teach analysts in Turkey in prison that's one third of all the other prisoners journalists that have been in prison and two both have it all in the West newspapers are being rocked where there isn't the paper in the UK that hasn't lost almost half its circulation and even worse lost a huge amounts of advertising to the Amazons and Google's so in terms of in history I don't think it will be seen to be as powerful today as it once was okay there was a hand right back here this woman halfway right my name's Meg I am a brexit voter just to get everybody on my side so I wanted to mention two people I wanted to mention Henry Ford and Margaret Thatcher Henry Ford boosted productivity and turned human beings into cogs in the machine in the name of productivity Margaret Thatcher says you want everyone to be you know you want everyone to be as long as everyone's poorer it's something like that you know what she said and but Margaret both of them didn't take into account that well Margaret didn't take into account that wealth is relative to your neighbor and wealth is not just about figures like GDP and statistics like health or happiness wealth is about control it's about status it's about relativity to your labor and so I would ask isn't your I guess the premise of the talk is that we should be happier because the figures show that we should be but isn't that ignoring the human side of life okay let's take a hand and how about the two-thirds of what women work two-thirds of the way up there oh god sorry I can't the woman right there yes I've got a related question I'm in there 50% of people who's going to be less wealthy than my parents is that anything policy can do to make people happier nonetheless in that circumstance I'd like to know the answer I have two sons okay so we have like three questions here let me start with the poverty wealthy relative I mean you're absolutely right all the research shows is that people care about relative poverty no opposite there was a remember after the collapse of communism there's a famous Ukrainian joke which was they asked Ukrainian villager I'll give you anything you want but whatever I give you I'll give your neighbor twice as much of and that this sort of Ukrainian farmer looked at this guy thought about it one and said take out an eye human nature what can you say right I wanted to respond a little bit to the future of the media question which i think was if you'd asked the question but that's implicit what - what you were saying there there's we've just completed a commission on truth trust and technology at the LSE where we have big public consultations a lot of faculty looking at these issues as as to how do we restore trust in the media and then I mean it's a very good piece of work which you might want to read which is on the web it's called the three T's Commission but the bottom line of what they suggest is that we need an agreed code of conduct among all media providers including the Facebook's and Inter you know all the Internet platforms and then regulators need to be able to hold them to account for compliance with that code of conduct so you don't have the government directly regulating the media in order to protect freedom of speech but you force everyone who's providing information to the public to agree to a code of conduct about fact-checking and etc etc and then you hold them to account and so it's a little bit of reversing what you said you just as the media holds the politicians to account the politicians also the political process also holds the media to account to a set of agreed ethics and rules that the media itself decides and I think that's actually quite a an interesting solution and maybe I'll give Andres the question and what do you do for the 50 percent who are gonna be poor other than bequests right you have to hope that the requests were in your favor let's see I want to say one thing about the connection between fake news aggressive journalism on the one hand and the quality of politics on the other [Music] the quality of people who go into politics is not god-given and one consequence of the current state of affairs is that a lot of people who might have gone into politics and done some good for the country's well not when I decided to run for office the first time in my life I rang up my grandmother and said you know grandmother I'm running for office it was a long silence at the other end of the phone and she said darling your grandfather was a surgeon your father was a lawyer couldn't you get a decent job please you know and I could see why my grandmother said that clearly if politics is not viewed as a decent calling you're going to get a lot of in decent people in politics and that's exactly what is happening and I think that that back channel is something we don't always appreciate mrs. Thatcher when you brought up mrs. Thatcher I thought you were going to quote her first famous line of quote there is no such thing as a society and whether such as economics were right or wrong we'll say for a different discussion but I think on that point she has been revealed abundantly to have been wrong because it is very hard to understand the subject matter at hand tonight without the interplay between the individual and society in fact when you said and I I reaffirmed this perhaps we're doing okay nonetheless we have a shared perception that we're not doing okay and we cannot understand that without resorting to issues such as confidence identity which are very much part of what a society is all about so as a way of thinking about the world I think that way has been revealed in sufficient and that it's not only an academic point it is also a political point if you don't understand that believe me you're not going to get anywhere in politics our children parents money I also have children so I I guess the economists in me and forgive me for for saying this 50% of people are going to be not as wealthy as the parents were it also had to be the case it's 50% of people will that's one of the few things that economists can assert with full confidence and given that over the course of human history that was not often the case that is in many books on ghosts Eaton's books I won the Nobel Prize a few years back also in Pinker's book is is a chart of per-capita GDP over human history it is if you begin with the Greeks and go all the way to the present it is flat flat flat flat flat but 1800 begins to rise and it continues rising and rising and rising a little deeper ten years ago a little bit with the Great Depression but in the big scheme of things we human beings are unbelievably much wealthier than any generation before us ever was and that we should not forget another round of questions how about the woman right there in the white sweater I think it is right Anita Hamilton I want to ask the panel please about trusts and corporations business companies the those brands that we engage with every day the fact that we have leaders of big companies like Stephen Phillip Green and many others who are now distrusted and that even a shiny lovely companies that we thought they're going to be like Facebook and Google are not what they seem very good I'll go to my left then I'll come to my right it's gentleman over here in that black switcher yeah hi my name is Alicia I'm a graduate student at LSE it seems hard to me to make the claim that the world has gone better over all without defining what you mean by better so sure famine plague and war have declined but why is it bad to be realistically pessimistic about ecological collapse and technological disruption are these issues less severe than ones confronted in the past and how should we think about them in the context of pessimism I'll let you think about that one for a second and we and then in the front the black and white thank you guys for being here this evening by the way my name is Max Schneider I'm a general course student from Brandeis University in the States my question is kind of about how the media has kind of the narrative that the media has presented and the rise of populism has been primarily negative and that there's been a backlash following the financial crisis an increasing world and urban divide and increasing inequality disparity to what extent do you think that's a correct depiction of of the rise of populism and its causes yes on the environment first and then populism I am NOT an environmental expert but I've hung around a sufficient numbers to have a view on this yes some aspects of the global Commons are a big source of concern global warming being of course a big obvious elephant in the room however it is not correct to say that every environmental problem is much worse today than it used to be and again Pinker has a whole chapter on this which is very very persuasive I never visited London in the 1950s but I'm told you know you couldn't see across the square clearly in in many places of the world the quality of life and the environmental aspects that determined that quality of life are hugely better than they used to be so even there I think one wants to be a little careful in being too pessimistic the same is true of technological disruption yes I'm sure technological disruption as manoosh pointed out it's an issue for those people whose jobs are about to be automated out of existence but the fact that I can do work when I'm in the train coming from my house to my job in the morning it's also technological disruption and it's pretty good and I don't want to be a Pollyanna I don't want to say that every job where that is destroyed will be replaced by another job will be higher paying I'm aware that there will be some pain and some suffering and some dislocation along the way but over the big sweep of human history things I've been a great creator of jobs and not a great destroyer of jobs we have just spent half an hour saying that the media is not doing its job so I don't want to say that immediately pick the picture of populism is one thing they're doing right that would be thank you inconsistent but I do want to say that the fairly negative depiction of the rise of populism is in my opinion largely correct or let me put it the other way around there is an intellectual fashion in some circles that says well democracy has become ossified and closed elite driven all of which is true and as a result of that first observation populist is a useful corrective to this ossify democracy I think the second statement is not true you can say yes in fact there lots of problems with our democracy and we should fix them without concluding that the answer to the Democratic problems of the world is Vladimir Putin or mr. Maduro in Venezuela far from it I think I might take the corporate question and I think any of you think about it the role of business and corporations let's just take a couple of hundred year perspective I am pretty confident that working conditions have improved dramatically over the last couple of hundred years conditions sexual harassment in the workplace I am pretty willing to bet that even though we have no data that was collected a hundred years ago I'm pretty willing to bet that women in the workplace were treated much worse in the past than they are now and so I do think we have to kind of again not to be too Pollyannish but but corporations have probably had to improve their behavior enormous Lee in in in recent periods I think one of the areas though that has probably got worse is and again I'm not going back hundreds of years but I'm talking in decades is the precariousness of the relationship between employers and employees and that has become less strong people turn over much more quickly than in the past employers feel less obligation to their workers than they did in the past and I do think that fuels a sense of insecurity that we didn't have before the decline of defined benefit pension schemes the fact that people have been able to hire on much more temporary contracts and that sort of thing and I do think that has changed I think that has fuelled pessimism I would just add one other thing which I think is interesting if you look at this Edelman Trust Barometer which does polling across I think 35 countries on who people trust in the last version you know everybody most people do badly most people don't trust obviously government's media etc and there has been a secular decline in trust over time but the one group that people tend to trust more in the recent data are their employers not business in the abstract but the pers the cut the organization that employs them they tend to trust the leadership more than in the past and the argument that comes out of that then is that people are now expecting bit more of business leaders and I think you start to see that now where think about the recent period where a whole series of business leaders have come up to very vocal on issues around LGBT rights for example or the environment that the bar has gone up for what we expect and I think that's really the next stage of progress in terms of people's expectations of corporate behavior very good let's well open it back up to questions we'll take this woman right down here hi I'm Constance Amma graduate well know I'm an alumni now of the Masters of Public Administration of the LSE and my question was related to your point about decentralization about how potentially to bring that optimism that we have about our lives closer to the way in which policies is implemented but as you also mentioned as has been addressed a lot of the issues that we are facing today and because of the ways in which policy issues are structure now go beyond even the national level how do we design policy in a way that is reflective of the way in which people perceive their lives and the way in which the problems are effaced hands in the back there how about that gentleman right in the center there yeah hi my name is Andre I'm from Brazil and so that's the reality that I kind of come from and talk from so I would like to hear your thoughts if may or may be in the correlation between this that is being said here about the relative relativity of wealth and this pessimism and maybe a possible relation towards a with privilege because as our colleague said I also come from they may be 50% impress you I don't know how to how's the percentage of people that are going to be less wealth hidden my parents but to me that's not necessarily a problem and I think just to make a dialogue with her questions like maybe on one way we can feel happy about this is that if we only see this not only through our like relative wealthy wealth lens but an overall so I think I would like to hear your thoughts about how these saints of pessimism what does it helps maybe to do with the exposure of like global diversity and maybe they need to to see yourself in relation to others and then people perceive themselves like in a more less comfortable like not hegemonic or narrative about the world right thanks and we'll take question down here the woman you know denim jacket I can't I can't really see it from here but yeah hi I'm Jelena I work in one of the social media companies um so I wanted to follow up on the first question actually and the answer how do you entangle the fact that even though media obviously has brought more exposure to bad facts or pessimistic facts that brought a also exposure to corruption and to like fake fake degrees from politicians and all that and if we agree that maybe the politicians should regulate this media then we have an issue which is if they give the optimistic facts then nobody gets attracted by optimistic thoughts that's why we do have populist in place and the other thing is that the previous media exposure exposure affected their credibility so right now there are no one to say well this is actually wrong because we're not so bad we wouldn't believe them and because we first of all we have that bias national view and then because we don't believe them because they've been exposed before so how do you entangle this what we need we couldn't need a third party but we don't see any third party powerful enough thank you maybe I'll start with the question on decentralization I mean you're quite right it's a huge dilemma because yeah I spent a huge part of my career in the international organizations which try and solve these global collective action problems and the way the democratic legitimacy of those organizations came about was because they had boards and on those boards were representatives of all the Member States I used to chair I shared 167 meetings at the board of the IMF with 26 people around the table each representing different countries or different groupings of countries and they had to approve every decision we made and that was why it was considered democratically legitimate same with you know the UN system the World Bank and all these international bodies but to be honest that is so far away from most people's lived experience I mean the Democratic link between my vote from my local representative who goes to my Parliament who then might be in the cabinet who then selects the person who represents me on the board of the I now yeah it's just way way way too far away I think one of the ways the international organizations have tried to restore some democratic legitimacy is by operating these so what they call multi-stakeholder processes whereby they can they include civil society organizations if they're developing say a new policy on climate change for example they involve lots of NGOs and they include non-governmental actors to try and legitimate but to be honest that is also not very democratic because those activists in the NGOs have their own agendas don't necessarily represent all the citizens of the world I think it's a really difficult subject look at the European Union and how they have struggled to have a democratic legitimacy and the European Parliament now people vote directly but let's face it participation in those elections is very very low so I don't really have an answer for you as to how do we do it I think most people are not aware of the existing democratic link I do think it's too far and I think it's I think it's a big problem for figuring out how to solve big global problems where you need multinational cooperation I think I'm gonna leave the other two to you know that Munoz had chaired 167 a meetings of the IMF board there must be a a tremendous reward for that eternal salvation suddenly I don't know what it is but but you know no wonder she seems to think that faculty meetings are brief compared to that I want to say something about the global local link and something about Brazil I am one of those rare birds who happens to believe that globalization is actually a pretty good thing however I can see why not everybody gets the point and something that is very disconcerting for most human beings is the notion that my welfare is dependent very heavily on things that happen very far away and over which I have very little control let me you two very practical examples I come from a country that produces zero oil every oil every bit of oil we consume is imported so the Chilean middle class is very proud of the fact that you know everybody now can afford a car and the price of fuels fluctuates widely because it moves for the price of oil and with the price of a local currency so you know one month a litre of gasoline is 200 pesos the next month a litre of gasoline is four or five or six or seven hundred pesos so my job was to explain to people that this is perfectly normal because there was a workings of the market and in fact there was you know a storm in the Gulf of Mexico which interrupted supplies and I was a disruption in Saudi Arabia and people look at you as though you're from Mars you know what what what is my livelihood have to do with something that happened in the Gulf of Mexico or Saudi Arabia but it does of course another example is this some countries have pension systems in which you save over your lifetime you earn the interest rate and your pension is whatever you earned over that lifetime when interest rates in the world collapse 10-15 years ago the return on those accumulated pension savings also collapsed so many people today worked very hard all their lives they saved to put money aside and today they realize that they accumulator no interest because the interest rate has been a zero in much of the world for fifteen years and when you explain to that which actually were a lecture to deliver on a subject tomorrow morning that this is the result of something called the global savings glut and it has to do with democrat tendencies in Japan and a drop in the relative price of equipment in the u.s. people say again my life my pension is going to be terrible don't tell me about Japan I'm that link which is very real but very hard to sort out is a permanent source of distrust because if you happen to be the person doing the explaining chances are the person doing the listening will think rubbish excuses technocratic mumbo-jumbo it happens to be true but it is very hard to convey that message Brazil Brazil is in fact one of the most unequal countries in the world we all know that the distribution of income is very unequal additional wealth is even more unequal the distribution of political power historically was very unequal etc now that every everybody knows that what a lot of people don't know is that in fact this region of income and Brazil has got an actually quite a bit better in the last fifteen years or so to some extent because of commodity prices to some extent because of redistribute of policies etc etc and big paradox is that the collapse in people's trust of politics comes at a time when distribution is in fact getting better not worse so the mechanical link that says oh people are very upset because the distribution of income is getting worse is wrong in most countries Brazil being so exhibit one of that paradox and that takes me to my observation early it's a politic stupid I think one cannot understand Brazil without understanding simply the collapse and credibility of the political class for things that have nothing to do with where the decision of income and which have everything to do with corruption scandals and payoffs and a bunch of other things and a very weak party system still has four political parties in the parliament 42 and I think that drives your point home there's hope for economists so so we have we've reached the point we've run out of time for questions because we have to do the experiment so your reward for doing the poll is there's a reception outside afterwards which we invite everybody for a drink afterwards but if you could they're going to put up the question I think right now yes and so do you feel more pessimistic or optimistic about the future click one a for mostly optimistic and to be for mostly pessimist on your let me just you know on Twitter right now it's running about 57% optimistic somebody's in Facebook's only around 50 are you voting frequently [Music] for a couple of minutes but I think were it's not that hard right okay so that's great so I suppose we should given these results we should give the two of you an opportunity to comment on these decisive returns recount recount I guess my following up on what we said earlier I would want to throw the question back at the audience are you pessimistic got your own prospects or what I'm sorry I think you have to attend the rest of the LSE festival so you know it looks like I mean people are kind of undecided and so you have the rest of the week to kind of work this out a terrific schedule of events and one of the things I think if maybe this didn't turn you one direction or the other but I think please join me in thanking both Manisha [Applause]

Channel: LSE

Views: 3,657

Rating: 4.6363635 out of 5

Keywords: LSE, London School of Economics and Political Science, London School of Economics, University, College

Id: o1JOUwomvo4

Length: 81min 37sec (4897 seconds)

Published: Wed Feb 27 2019