Mark Blyth - So can we have it all?

[Applause] good morning everyone I can't remember why or under what conditions I agreed to do three things in two days let alone to have that tire because I that was you what's up me I must have been high at the time you're clearly so the dog right why the dog because Papa Point now has this feature we can like sort of like party up your slides and I just put in the title to calm me hover all that and it came up with a Labrador I have no idea the significance of that or what I could possibly mean but I'm sure on some level I was meaning to somewhat although it's a by have a five month old golden retriever so I thought I suppose it's something it's the bane of my existence so no no all right so can we have it all whatever but I'm going to do is basically because I really don't have that much to say is to try and summarize what we've been talking about that might actually be a semi useful thing to do and then to a couple of my own thoughts and reflections on it in terms of what I've been thinking about regards to this sort of project I mentioned basically are for everyone the other side of Picardy asset ownership which obvious is less clear affinities to both of the projects that these gentlemen are involved with so without further ado let's go on with thoughts so what been talking about solidarity and I'll run off Stefan at the beginning and his introduction and realizing the value of non domination so I hung out with Alex good ovitch and prior to that I spent 10 years at Johns Hopkins so that meant that I spent a lot of time with William Connelly William Connell is Brian De political theory doesn't give a about republicanism so I was completely unaware of all of this stuff until I met Alex and Alex is interesting because he's a Marxist who takes republicanism seriously and I thought oh I'd never really thought of that before so the Calgary of non domination as a sort of a different way of talking about liberal principles is intuitive it's something that I'd never really thought of until someone told me and then I went oh yeah that does seem to be raw unimportant and a rather useful way of thinking about things particularly in complex work environments were people apropos Elizabeth Anderson's lectures really does show that domination is actually this V perhaps the single more serious problem that we face so that's fine the impediments to having at all we can fill in whatever all is later on but then of course you know you can recognize that dawn domination is an issue but then immediately the first thing comes up was well if people are dominated obviously somebody wants them to be dominated or there are accidents of history that made them dominated so what are those impediments there was a sort of a link to a kind of recognition sympathy angle within the political theory that you were drawing on particularly through rasul-allah and of course I was reminded of Smith etc as well and not sort of sense but then there was the whole issue that was brought only at about fear value etc and the volume political rights above all the rights so it's not all just a smorgasbords right so basically there's a clear link between political rights your ability to be a sovereign and expressive subject on the link to domination and those are kind of a special place right so I'm putting all this together in my head for the first time so you know correct me if I'm wrong or when we have not so much acuity in a conversation I'm just throwing that themes that I think are important and what we ended up with with Stefan with the cities of binaries his academics usually do so the rabble in the wretch then later with Stephanie party members and voters voters and the politicians nations and states global and local so that's the first one now but the strategy is for having at all so that was as I'm just calling them short honda LDS and PUD liberal democratic socialism a property no one in democracies the twin frames so in graduate school had read Roma on had followed some of this stuff one vote for socialism etc Alex good of X again had a recent sort of revision of that proposal in Jacobin which had had a Luca and I've always been a little bit skeptical of those types of things in the sense that when share privatization is a good example though if you give people property in the form of paper and they know they can make an instant gain then they dumper and the whole project is obviated right and that you end up with oligarchy co capitalism not clearly with the Eastern European examples with us the Swedes however show us another interesting version of this back in the nineteen nineties the Swedes basically did Milton Friedman and did vouchers for their public schools but what they did was they made them all of equal weighting in value so there was actually no monetary edge to the to the vouchers so what the voters became was a signalling device to each other on the quality of the schools but didn't give you access because there was no differential pricing so the octa there's a kind of signaling mechanism to the schools to shape up so it's very swedish if you think about it's very ren Meitner and what you're basically doing is saying you're a low product of a forum you're going to go a business unless you shape up because we're raising labor costs and it's it's that kind of how you can take the same tool and use it in a very different way as actually a kind of an interesting thing it shows us that these things are much more flexible than we think means and ends right essentially both of these frameworks and it aimed to make domination impossible under somebody who's a sort of a synthesizer rather land and divider where this is going is to suggest that they actually work better together than apart so that may be heresy and i may be trading on fractures but I don't actually know but I'm gonna go for anyway so that's the issue of compatibility nice elusive early Alan gave us a frame about four floors that I thought was a really useful way of thinking about that I'd read men scared I'd Minsky have taught Minsky but the way that Minsky gets taught and I'm really grateful for Alan for doing this because you read the bets and nobody'll frites right and it's unreadable I mean I don't know how you did it I mean I'd really don't get it it's like reading Hegel in German when you're it German it's that bad but most most people's stuff on Minsky comes from Kendall Berger so Kendall Berger read the whole thing into this book called manias panics and crashes back in 1985 and he took basically half the book and distilled what's called the financial instability hypothesis and everybody reads candle bug and nobody actually reads Minsky because it's unreadable but what Allen did was gave us this version of the four floor so the first floor is essentially a set so let's think of stock markets as assets so when there's a catastrophic collapse in the stock market you can bet that the public authority will step in they don't actually put a floor under asset prices what they do is people are shedding equities because they think they're gonna lose value and they don't want to be holding something that's what even less tomorrow so there's an accelerated depreciation in the value so what do they want instead they want to buy a safe asset this is why gold goes up in crises right but there's only a limited amount of gold that has the reverse problem you don't want to be caught in the wrong side of the convexity because if you buy it at 10 it goes to 20 you know it's gonna go a 700 the minute gets real and it can go really fast so you want to buy government debt so in buying government debt what you do is you stabilize the price of equities right second one that they do is with prices prices in general essentially the Federal Reserve's job is a Goldilocks right you don't want things too hot you don't want things too cold so they control it that way profits this is the interesting part of Minsky about tax farming which I never really understood until yesterday which is there essentially guaranteeing a rate of profit and then you talk to them well the thing is romansky wrote in 86 and these days they don't pay any taxes that's the problem so essentially you really are just given them guaranteed super profits and that's kind of ridiculous so the solution to this and I thought this is absolutely fascinating notion of the fourth floor under wages and we were talking this morning about what that looks like in practice and that come to me it's that we are already exists is called active labor market policies it's just that if you say that nobody understands what is so for years the Germans and the skandos in particular have been using these things and then here's how it works rather than having a government office for sort of unemployed labor as a punishment device you basically have it as something that ties the men to either re-skilling and redeployment or straight into things that need to be done so if you can decide on things that need to be done which is the political problem of having a halt just to flog them then essentially you can have people working at let's say five dollars more than the existing federal minimum wage in the US when you do that two things happen everyone who's in a really job has an axle option which puts massive pressure on those employee is that actually shape up now those employers they are not the ones that are actually making super profits they're not tech giants or Big Oil and any of those things their margins are actually quite constrained so if you think about the way the fast-food industry works it works through franchises so each individual franchise isn't actually making that much money either in terms of turnover a profit so their ability to actually generates higher wages extraordinarily constrained so what happens as you either automate that sector or you wipe out right I think the world with a lot less fast-food might be a good thing could be right but nonetheless you will have those effects then what do you do with that labor well you redeploy into things that need to be done but that becomes the political problem of having all and I'll need to read the the paper that we would have been doing today on open labor market operations I think that's a nice way think of it but there's another way of doing it which is active labor market pulses right so an example of this I live in Providence and Boston to New York and New York to DC is the busiest part of an truck and it's the only bet that makes any money and it's crying out for a proper high-speed rail link and the problem is both eminent domain awkward terrain lots of curves in the tracks all that sort of stuff there's a straight shot but that basically is Boston to Providence for most of it but there's a way you could do this and it's given us an example is you don't have any eminent domain problems on the middle of i-95 because it's already owned by the government so basically you could just build a double truck and just send it right across the top and 95 now if you decide to do this and I just posted someone on Twitter of inflation expectations it's like boom right so that means over 10 years the government can borrow negative real rates so investors are paying you to take the money to do whatever you want to do with it now the infrastructure of the Northeast is about 110 million people use it was designed for 50 or 60 million people so it's a disaster Boston as a parking law so if you were to do anything to audit an asset to the public balance sheet hot tip over here right that's actually going to increase real consumption cut by reducing cost and also take a huge amount of stress the rest the transportation sector and people's stress levels going to work and all that sort of good stuff so you know this one you phrase it that way there's nothing that difficult to foresee how this works so the price of destroying Jimmy Jones is real high speed rail I'm up for it I think it's a really good trade-off which should make and then bill as I said give us the case for public assets and I just bit as if my shorthand father is vital and non divisible right that would be a simple way of Poorna all right now let's talk about the politics of all of this right there's a way in which my big critique of stephanie kelton and people like this and the funders it's funny had the funders of mm tea at all hedge fund people do you think there's a hedge fund people have been interested in not paying any taxes ever they might be attracted to that philosophy I think we should be a little bit suspicious but anyway you know the problems not the plumbing particularly through the US is the politics it's basically how do you get people in a federal system who live in Nebraska to give a about high-speed rail in the Northeast that's your problem and what Stephanie gave us is the fact that all is in historically specific and political the contingent set of wants are not constructed by parties and other agents unfortunately the parties forgot that so the way that it to get the stuff that you want and I think that for example you'll see intuitively gets less and more than in two of Leggett's this is basically by not just changing the conversation or being realistic or whatever that means but busting through those conventions so the whole thing about the 70 percent tax right you know what so quickly that got normalized because you know it used to be the case if you wanted to put it up and the Clinton either by 2% right all hell will dogs would be released from hell and all the billionaires would live on Mars and we'd all starve to death right and that just nobody believes this right I mean there's a great little book actually called the myth of millionaire tax fly if you want to look at it they're really to see the associate logical study of this they never move and the reason they never move dead simple right I'll hi honey yeah look they're putting up taxes by 5% I think we should take our kids who have special needs out of the schools that we fought hard to get them into and we should all move to Mozambique right that's just like that's what we should do you know the number one reason American multinationals choose Scotland there's a destiny Jenova Ireland because they can get even better taxes in Ireland golf courses the this my crush it really Mars right so when you do the seventy percent tax thing what you're doing is you're doing the Overton Window play alright we're over here and I'm gonna go over here and then you're gonna go mental about and even I'm surprised by how not mental it was and then we're going to get fifty that that's it but if you're like maybe we could have a bit more you get absolutely nowhere and that's what goods politics is about so I got really frustrated when I listen to people like what are the policies we need no you don't need policies you need that you need to pull it eko imaginary and people who basically make it work that means that it's all a function of framing and it's not about the if you will the production possibility frontier is about pushing like the political possibility frontier what do you think is actually feasible is itself a product of argument rather than reality in that sense and particularly if you are either you know if you were the ECB run by people who are not deflation as you could imagine a wall in which you could get away with that but particularly for the US you can do an to a limited extent with the UK I mean the capacity is much smaller but you can't do it in that way and then when you think about Corbin's biggest thing is like you know nationalizing the trains people forget the forty nine percent of the shares and in deutsche bahn is owned by the state sixty percent of france is owned by the state mean it's hardly a controversial proposition and if you've ever saw it on a french i TGV or a german i seee the note say what the private sector will do it better it's like really have you been on a british train and then you know all is there for a function of power dressed up as technical efficiency which brings us to our conversation about economics yesterday so let's put some content into all so i'm going to divide it into micro meso and micro and see where we go so first one is liberal democratic socialism and property-owning democracy are both institutional hacks and and states so what i mean by that if you take islands proposal seriously what he's saying is I've got one institutional facts and if you do this it shoves the entire equilibrium into a new state and that's very powerful politic so if you can frame not write and sell that and just focus on that just hammer away at that and get that done that changes things and it changes things in a drastic way that many of the forces on the other side will but unable to argue because essentially if you're against things like this you have to take a stance which says no I actually really believe in plutocracy right which is a very tough rhetorical position to actually come back from right so there's that again with the argument with public ownership to crudely put it that way that I'm a real fan of this for a couple of reasons we'll get into in a minute but the first one is public ownership allows great a private consumption and British private consumption in conjunction with the force floor is non domination if you want to put it in those terms those two things can work together very easily so I want to talk about public assets the fourth floor and then everybody's favored lolicon theory mmt and related macro theories so the first one again as I've just suggested Corbin's trains is a great idea of this and I mentioned this yesterday so currently if you factor out financed British salaries peak between twenty nine thousand and thirty three thousand quid and that's not a lot of money a few level like in or unwanted and most people don't live in London sidebar on this I was staying at Elephant & Castle and I mentioned this the other day 25 years ago my girlfriend lived in Elephant and Castle elfin castle was a place where you've run through so you didn't get knifed and now it looks like Buck Rogers I mean it's ridiculous giant five-star hotels and all the share so there's a when you just before you get to wear the old GLC was which is another hotel now of course right there's a little real estate brokers and I was like I gotta have a look at this so I went and I looked at it and I was looking at the prices of the corn doors of all the glass things that the pernot right so it was nine hundred and sixty thousand quid for a two-bedroom that's not the shock the two-bedroom was 650 square feet the first of all Heidi even feta 2-bedroom I mean not not there's got to be health and safety issues there right I mean you know clearly but just the price per square foot or not relative to income it's just I mean it's beyond 12 to 1 is beyond Sydney or Singapore levels I mean they're not the Hong Kong levels completely mad so carbons public assets proposal is I can take the cost of you commuting to work from 13 percent your postdocs and come to five percent so suddenly you have a seven percent real wage gain if you do that at the same time is you'd your wage floor you're making a massive difference in people's lives with two simple fixes it's not that difficult public assets and non domination well you know if anyone's got kids you'll know the domination for them comes in the form of Facebook Instagram and cyberbullying right so there are real public health issues associated with these things right but there's a lot of issues in there right so public assets and non domination Facebook Google Amazon Web Services right think about this that's the only bit of Amazon that makes money 60% of US businesses are throwing all of their IT needs into a cloud controlled by one firm that means they know everything about everyone who's nominally their competitor and like no regulators even looking into this right the other great one you see called on the whole Amazon second headquarters thing right and lots of real estate investors when she's terrible when all the people who live there went thank you and we'll reelect or because of it right but the interesting thing is why did they do this and again nobody quite gets this one so what Amazon did was to say alright we've got the possibility of dumping 30,000 jobs in your neighborhood we wouldn't go into whether any of the people who live there will actually be employed in these jobs or whether this is a boondoggle for real estate brokers which it was but you like it right and everyone like yes what do we have to do and I said you need to tell us everything we don't know about who you are so all of the reports that were compiled about 60 major metropolitan areas the United States basically contained fine-grained detail much of it basically on a kind of personal need to know the non-disclosure basis which is the type of information that Amazon couldn't get through its own means so it just basically gave them all the information you need and then they also run the web services for all the competitors know just know that simply has to stop right digital platform a really fun thing to do because all it is to download the brochures for initial public offerings for us forums because honestly it's the only time you need to tell the truth about a forum in the United States because there's a firm SEC regulation that says you really need to tell us everything warts and all about this because if it turns out you don't you've come out investor fraud all right so if you download the Amazon the uber prospectus it says this company may never make a profit because the whole thing's based upon self-driving cars which is probably never really gonna happen and exactly the way that they imagined so you're basically taking investors cash to undercut taxes and eventually your honor of invest of cash and that's it so the gig is you do your IPO you make 40 billion you're divvied up amongst your friends you're Mario supermodel you off the New Zealand I mean that's basically the story so these things are inherently disruptive but the platforms themselves are great now there's no reason you can't have uber at various community levels the only thing is what they've got as a lock on one up so all you need is one piece of legislation that says you need to have a local alternative and you just have to write that so if I live in Providence and I download uber I also get another app and not other app gives me the hacked version of the platform so there's genuine competition you can do this as an antitrust issue which brings it to the issue and I've got this under another slide well do it now or off for sure I don't know this is how you regulate these things because the notion that you can break them up doesn't really work this isn't bail Telecom right well you can have regional wires the platform's work because they work either universally or they work at different levels of scale and if you wanted them definitely as a scale then you keep the whole but then you can scale it down and have alternatives that's how you do competition whether you regularly from within think of a Facebook right you can't really have regional Facebook's what what would be the point in that it doesn't even make any sense Facebook what cuz there's Facebook so what you want to do is you want to keep a whole but you want to basically increase the threat to the firm for doing the budget that they do not necessarily by regulation so if you think about sorry for going on about that's but I do know quite a lot research on us the whole note the whole thing about bringing a Libra a klepto and all the rest of it right it's really about bringing the platform private so that you are paying for the privilege of being on it but you're peeing in their currency right this is how they're doing this play so again the news hasn't really caught up to this right they know that they're going to ask you a devalued currency if you're holding this is a store of value you're an idiot but if you're doing it so that basically you get subsidized access to a private platform then it makes perfect sense so they can run their own closed economy devalued currency and then avoid the regulations and continue to exploit the users which means the real way to tackle this is something called dia trusts right so if I put my IP ëhow and forum an international political economy there's another issue that we need to deal with the macro which is the United States provides global liquidity and also provides the Louisville safe asset now this is important because the more you have profit led domestic regimes that rely upon exports the more mercantilist the system gets as a whole and not something Keynes identified in the 1940s and her suggestion was what was called a clearing Union and a currency called the bank or which are the systemic bias against exporters made them rebalance over time we don't have that but what we do have instead is the United States ability it's run unlimited deficits and that adds demand to the global system and also supplies the dollar as the safe asset so it's kind of a bank or that's basically you know what the system is gone if you do mmt which we'll get to in a second the status of that comes into question and so it's not the fact that you can't do this that there actually are costs to doing this that might be quite destabilizing who can't do MMT everyone knows what has we mean me talking about right y'all know you hands up if you have no idea what mmt is right ok good so modern monetary theory is something that goes back to a guy called abalone so a novel Wellner as a guy who didn't fund ABBA that's an entirely different thing no he's an American economist and he was a kind of buddy of Milton free and he was started on the left went to the right and then went back to the left and then died so that was that and he wrote this paper in the late for is called functional finance and the idea is that you don't measure spending by how much it costs you do measure spending by its effects so it's very much wartime thinking about the economy and basically the idea is that the notion that the government taxes and then spends is ludicrous because what you pay your taxes on is the thing that the government prints so you know every year we spend all this time myself no exception scrambling in the United States if you've got a tax liability to em these bits of script that the government prints so you can hand it back to the government itself that literally makes no sense the minute you think about it so what the government actually does particularly in a digital world is it presses a button and it authorizes the Treasury to print money and then not has a corresponding asset which appears in the balance sheet of the bank called the Federal Reserve right liability right but here's the thing is Kasia isn't a liability because it's only exchangeable in terms of other forms of cash so central banks on like commercial banks and unlike U of I Elaine's you eval and anybody in this room 500 bucks right that's my liability I might not get a buck you know have a corresponding asset which is the money that I gave you right if I'm a central bank and is you you or is you a certain amount of money there's no corresponding liability because it's not as if as bucked against or based against anything that's there now what that means is I spend and if I want to if there's inflation in the system I can tux to bring it back that's really all it is it's a very different way of thinking about taxing and spending and this is the philosophy the money if you will behind the green New Deal you know we can't afford that well you know as Alan said yesterday you know and it's it's amazing that it wasn't made more of a thing and that's the failure of the Obama administration vol 6 chapter 12 item 305 but you know the money for the banks right you know we blew up the global financial system and suddenly shower it with cash right but we have incredible austerity in public spending and Britain to the point they're basically Preston when autarkic in order to survive it's like what if we decide to go ahead and blow up Iran right there's a multi-trillion dollar effort there'll be no question about them where the money comes up right and that's because de facto government's already do this it's just at the right tense to do it in the left is call itself up in this box of well we need to be fiscally sound it's like well why the other guys don't believe this and again that goes back to Stephanie in the technicians in the finance friendly economist and all that stuff so the problem with this is who can really do this and the United States can do it because it has that exorbitant privilege of printing the global reserve asset everybody else has their own dollars in order to conduct basic imports and exports you want to buy fuel of your France you can't pay for it in Euros you have to basically arm dollars not a paper because it's all dominating dollars right so the United States can do this because here's how this would work we're gonna spend like hell and do whatever we want and foreign bondholders will go well okay so that means that your deficits gonna go up your your economy is gonna go off like a rocket there might be some inflation which means that the future value of the saucer I'm holding is gonna go down I should dump it but here's why what's the United States where else you're gonna buy because you could buy Chinese there except they don't nest you right and you could buy euro debt then the Italians might leave and then you're left with wallpaper so we can do this because in a sense we have an exploitative imperial advantage over everybody else so you know the ugly side of the green new deal is saying to everybody else who holds dollars in the world up and deal with it and that's really the cost of mmt so it's not very user friendly if you're not actually the dollar itself China does it because they have three layers of carbonyl controls they do not allow money to leave the country and they like money coming in and then what they do is they sterilize the dollars in the form of either buying t-bills which helps us do our thing or turning out and the belt and road real assets around the world that's basically their model and they do it so they facto if you're one of these two models and you're really beg you can do this can Britain do this right could Canada do this well to a certain extent because inflation expectation is what people think inflation will be in the features on the floor long-term interest rates are negative so in a sense yeah you actually can't do this but it's much more limited I mean if Boris comes in and does 5% of GDP is tax cuts in order when the next election he will create a boom but what will happen is because Britain imports 2 of 2/3 of its food the pound sterling will go down in value and you will get inflation so under a money modern monetary Theory thing you need to stop spending so depending how much mmt boris does if he's a really mm tier he would do that and it would probably end really quickly right so it depends on how much structural capacity you've got to do this type of stuff so it's it's a good thing that's good plumbing it's not good politics and there are serious externalities if you're not gonna do it one way to think about it this is Ryu niversity true I have an ass well I should have no problems because not even the embargo should MA you should just be able to print and go and that clearly doesn't work because nobody believes that the currency is worth a damn and they dump it the minute they get it which is the big problem hence the politics of this come down to the Overton Window and anybody who says magic money tree you need to turn around and say you're an economic illiterate and explain why in very simple terms and do over and over again like training a dog until everybody's got it all right other things I like I like we did a little bit of reading on this but we didn't talk about it I really like the idea of Matthew Lawrence and others about citizens wealth funds the key thing here is what are you trying to do if you make them beg enough you can do something about inequality on the back end and not necessarily its pre distribution because redistribution without relying on taxes so you can do it across time and across generations which is actually really useful and the second thing is the issue of how to fund them right and lots of different ideas like fees user fees scrap taxes levies I really like is funding whenever is a financial crisis is an insatiable desire by government bonds so USU more than you normally would and you use that to buy all the equities that people have dumped but this time you don't give them back so if you think about when Britain did Bank rescues what did they do they were like oh no we're not taking ordinary shares will take preference shares we'll turn them all the preference shares and of course the public like what does that mean what it means is I refuse to have voting rights on the things I've just rescued and basically I won't even take a dividend I'll just basically hold it so let me get this straight I Drive a truck into your house cause unbelievable damage and your solution is to push the truck affects it for me make sure I'm okay rebuild the house on your ticket and never bill me and that's exactly what they did this is completely ridiculous so there's really good ways and encourage people of you're interested in this too to look at this stuff because they can make a very large macro in part if you su twenty percent extra American GDP the next time there's a colossal financial crisis everyone mobile goes Bonds as I said the other day twenty percent of u.s. GDP is two times 1.8 trillion so you're talking nearly four trillion so if you were to compound over 15 years at 6% a standard equity premium you basically get to about two point nine to three point one trillion so margin you could just dump that on the bottom 80% of the population and good libertarian fashion no strings attached do what you want with it use the user abused right I think it would be incredible you would transform hundreds of millions of people's lives and I haven't talked the single person to do that right so therefore if you don't like this again you have to say not only do I like plutocracy I don't want other people to be rich only me so it creates again a very powerful politics if you're right green new deals great it's a wonderful way of restoring inflation which reduces people's debt and also we'd led growth which is the whole thing that we're after and you can't fund it if you're the u.s. 3m MT but there's lots of other things you can do too and you don't have to be funding a lot way all right the Meisel Aesop's and co-ops and employee ownership and other forms of ownership I think these things are important but quickly you've got some problems the first one is the issue of scope this doesn't work in some sectors all right how do you have employee ownership of ornaments that's a tough one right and very very large vertically integrated entities that demand that you have hierarchies that becomes problematic in terms of corporate governance and that's not to say you can't have it but there are sort of scope limitations scalability is another issue as well yes you've thought you brought up yes the bit right capitalization let's say that you're a major airline how do you go around leasing or buying ten a380s when they cost how much each alright that's a tough one for a co-op to organize because essentially a co-op generates rep generates the ability to take on loans or debt through it's basically its emitter its income and interest before taxes so if you're limited by scale you just can't go up the scale to do this now how is it the airlines are able to do this because basically the issue shares to the general public not just everybody in the Corps so you can go much bigger in terms of skill so you want to keep that there's a real limitation on the size again another one I'll and highlight did yesterday competition between units everybody loves John Lewis but John Lewis does well when they moderate ESCO so it becomes rather zero-sum and not a god there's a couple of other let's use exit once you've bought n do you get to cash out when you leave or do you not get to kasha when you leave or should you cash out when you leave all of which should open questions and then the last one is these things are like into partnership and partnerships are good because you have skin in the game you're responsible for your losses as well as your gains but to use an example of a law firm if you bring in six times as much business as someone else and you're all partners you actually keep the asymmetric game what happens if you're the person that really really makes this thing hum and you're all basically 100 pound a week socialist wage then basically end up with demotivated labor and people exit so you do have a sort of some it's with these things as well I like them but there's some people like deck marking and others in the US who really think this is the panacea that can transform the economy I'm just not convinced wonder people don't talk about the digital dividends and here's what I mean by this when we have mobile phones or other things or radio we auction off the spectrum to the highest bidder and we give them licenses for certain periods we give away our data that makes no sense I mean the only reason that these digital monoliths make all the money that they do it's because we give them data and Amazon's now got to the point it's not even reliant giving us the data they're extorting it from local governments and they were creaming it from the fact that they run all your bit all your business through their servers so this is just crazy so if you think about it you could do it's private property but then you've got a scalability problem average revenue per user for Facebook and Google is about between nine dollars and twelve dollars a year you're not going to go to the problem of license and your data to lots of different platforms so you can get forty five cents it's just not gonna work so what do you actually need to do then you need to do public trusts so basically you can opt in or out to an NGO or quango or something that's independent from the state that nonetheless is not dependent on private 501c3 chari or whatever you want and then you can sign your rights to them and then say I want my data to be used by the following firms or types of firms or not and that's it and then you will get whatever we get back is that when we sell it all as a block rather than just give it away because if you price it as our proof average 11 you per user that's just the limit cost that they're extracting the data but that's why they have unbelievable profits so if you want to basically change that then you sell them the data and blocks or you don't get it at all in which case you can't do anything in the UK or in Canada for example at which point you'll suddenly find that the selling price of that jumps up dramatically and yes that reduces their profitability and that's exactly what you want to do so there's way to do it through that way and that's more public assets which is good and again as a mention on it was work with Facebook's so basically nationalization is utilities or multi-platform and as I mentioned earlier is the way to go with that stuff all right down to the Meisel so a property-owning democracy doesn't equal more corpse and Aesop's and then what does it mean between the institution beyond the institution of a wage floor what do you actually own and how do we communicate that to parties other than ourselves and that's what I've kind of been talking about right I think that's the kind of Meisel level issue I've got macro solutions but I need to make them talk at that level so that parties can use it and activists can use it and all the rest of it and second one if more public assets are the route to having at all what happens when it's this state that's accruing most of the assets and the state chefs a call over them because as always if the problem with the left is we have a naive faith in the state we believe that when it's run by people like us things are fine it's not always run by people like us and by the way sometimes we can be even shittier than the other side so there is a political risk angle to having too much on the public asset side so again it's about that strategic blend between the two things I have zero problem with owning railways I think that's not a problem at all I don't think we should run Airlines I mean if you've ever been on Air Canada it's run by the Canadian government and it's called maple floor for a reason they don't give a they're horrible and they're overpriced and they do suffer no competition it cost me 500 bucks to fly back and forward to Providence and a tiny shitty jet has Springs coming out of the seats that would probably crush from overuse not good not everything is good cause it's run by the state right so I think we need to calibrate carefully want to do and my line on this is if the state owning this reduces cost to the people who use it so that they can spend more in the private sector or alternatively reduce their debt that's what you do if owning it doesn't do that you need to have another really good reason such as vital that you would do four informant not but I think that could be sort of some of the decision laws or not and then my last slide on this one is the micro what's on the micros lots of cool stuff on the micro there may not be scalable but if do the marker ooh you you get the Meisel problem sorted out and then you you get these in place you're doing lots of things that are not dramatic but the collective our impact could be utterly transformed of and I don't use that as hyper hyperbole so a good example is I was hanging around in Scotland recently they suddenly become interesting to me because post brags they're off so there's a chance that you've got a government that might actually try and do a lot of this stuff so it could become a good sort of lob for trying places so I basically want to get this close to them as possible so I went out to a little village I said of Adhan but I called Balinor and an example of what happens when you change the land law so a lot of this henry james stuff about land has been read again and i was called this the Lex Luthor problem so Lex Luthor and Superman his famous line to my dad told me to buy land because son making any more of it and that's the Lex Luthor problem land is the one thing you can't manufacture and I don't tell that to the Dutch right or alternatively you know Boston because half of that is line but there are limits to it and the key thing is it just is so you know you're taxing regimes what it should be very different so the Scots looked at this when you consider that the royal family and like a Dutch billionaire or like uncredible large parts of Scotland and I said a hang on a minute so they started to look at tweaking the landlord's land laws and when you do you can do some really interesting stuff so one of them has to do with the problem of orphan assets or dead assets so what happens when the RAF gave up a base what depends on is so there's one called can La Roche which is by the Isle of Skye and it's on this unbelievably beautiful and let an Iowa sky straight across there and you've got these runways lying off there and the land is above where the sea level is and you could just walk I mean it's just beyond gorgeous right well it's just crying out to stick it but big luxury hotel on there and then you've got small local communities that now have something that they can anchor and build on whatever there's another one up in the Shetlands where they basically took all and no hundred used to have another big bomb or base up there for the USAF so it's got all these big structures and all the rest of it so lot of them have fallen down whatever but a lot of the buttocks basically get turned into community workshops theater spaces play rooms childcare crash all that sort of stuff so you can do that sort of stuff the one I liked I said a bad number the part of the law change was if the community itself now his legal standing if it makes a claim of an assets been abandoned so there was a hydroelectric dam there hadn't been used for 60 years in the village it was above and I saw and if all I wonder if we could get this going and can't we sell it to the grid so they went into headin but I got finance to do it up didn't actually cost that much got it back on they no sale to the grid and there's 70,000 a year coming into this village which pays for all the good stuff that kids like there now why do I my interest in these things because they're not scalable or nor not that high impact one of the biggest problems of an equality spatial inequality that happens because small space is simply don't attract capital but if you can have assets that uncle those communities like this is a huge thing for the American Midwest right that's a really really great thing you can do other thing you can do there's a 2015 or 14 United States Small Business Administration report about the problem of stranded assets in the baby boomers so here's here's what that means you wanna print shop in Illinois it's a successful business because in this town in Illinois at that time it's a prosperous community right it's still doing okay it's relatively closed in Chicago is not what it once was but you made a better cash and you sent your door to oh I don't know Brown University she's not coming back to Illinois she's just not so what happens to that print shop as an asset and attend people to work for it well one thing is you can turn it into an esop that's exactly the type of thing you can do but then you've also got a much bigger problem as you have heavily in dead Millennials many of whom are actually willing to move if you check millennial migration part of the United States it's absolutely fascinating it's all second tier cities there's like a pipeline an underground railroad that goes from basically prata from Pittsburgh two Baltimore Baltimore to Cleveland all these likes places where you can set up a brewery for like very not much money right and these are actually quite fast-growing cities those are the ones that are coming back because the course this has been what we priced out so you have an opportunity whereby you've got a bunch of people that are young that want our sets that have got too much debt and you've got a bunch of people who are all that need to get rid of their assets but basically outside of Aesop's are selling for 10 percent 10 cents on the dollar they don't have much going on so if you can imagine a public equity fund whereby they buy the 50 cents on the dollar and then you get a bunch of people to essentially work for equity and then you do ownership transfer over time you could see you can you transfer a trillion dollars in assets to a generation that badly needs a set formation now all of those are micro it's it's very complex many of them will fail but guess what many businesses fail why would we be surprised by law right you just need to leave what you're worried about is the successes and then finishing this up the problem of this one the problem of young debt and all the assets usually it's a tough one to say this but your grandmothers are right I mean the boomers are horrible horrible people I hate to say sorry I know there are exceptions right but basically they they live through the golden years and had high real wage gains and then they bought if they bought property they bought it in a period of inflation will buy the bank ate half the mortgage they then voted for right-wing parties that produce really high real interest rates which meant that sticking just the money in a savings account and Citibank give them six percent for eight years and then four percent for another eight years they all put their money in the stock market as it went on the longest here in human history and when all blew up in 2008 the government socialized the cost so they'd hardly lost the panic 60% 70% of all medical care happens in the last six weeks of life people used to die of one catastrophic illness usually it is smoking so basically you would spend fifty sixty thousand dollars on health care and check out quickly no people are living longer they're healthier so they're getting Alzheimer's and progressive degenerative nerve diseases etcetera require long term care and are nice spending 300 or 400 thousand dollars in health care so how do you pay for that you create student loans so that you lot pay for the health care because they refused to pay any taxes on the retirement income that has to change but they bought twice as much as Millennials so even though Millennials are no pneumatically more of them than there are boomers you just don't vote so that sort of laund apathy you got from reading Nietzsche is really you up right you really need to stop doing that and just get out and vote that's the main thing some societies a figured out that you're not going to do that Japan is at the forefront of this mainly because men under 4 in Japan love in tiny apartments with their parents and spend their whole life playing video games which is weird but they do so this guy could order is the guy who runs the Japanese central bar and he's figured out a really really nice way to how to get around this problem so his problem is in Japan it's a really good thing it's not a problem but basically government debt is regarded as an asset so where does anything United States with the clock and all the sorts that people have been taught to think as the Germans do debt is shoeld sure this guilt it's all bad right they go it's a savings bond so Japanese people tend to buy lots of government there as their savings bond so to get them to not do that what they've been doing is basically buying all the government that direct to the central bank now this is meant to be the end of times when you do this or I ask any mainstream economist then it's like oh my god this is what brought Vimal right and in a sense that we're trying to do about that they were trying to raise the rate of inflation because they've been in deflation forever but here's your problem you're the oldest Society in the world average Japanese 47 years old all right and you don't really do well on immigration so that's not going to be a solution so your population shrinking so as the nominee are shrinks the numerator gets bigger so your 200% of debt is going to become 300% at there and you've got less people appear because they don't work is they stay at home playing video games so you do have a structural problem so what you do is you buy it to try and create inflation to reduce the real value of the debt over time but here's the trick is why it's called solving the Pocari problem you're giving assess to young people in a different way usually you have to wait for these old Japanese to die so that they hand the savings bonds to the kids right but then there are none so little an interest it really doesn't make a difference what about if I crush to the yield just now so that it's Negev what that means is no longer an interest-bearing asset but with bonds prices and yields move inversely the more that you buy them the more the demand goes up to the more the interest rate you have to pay goes done so if the central bank buys every bond that karma harms is the bond value goes up you're then transferring very valuable cash assets to young people that don't actually pay interest so you're only incentive is what seller immediately what have you got you got cash that means you're gonna buy things and that's sort of their way of doing this now it hasn't been not successful because they just don't buy stuff but you can see that there's a huge amount of leeway and what central banks and things like I can actually do through this example but the problem of young debt and old assets is a really problem again Green Investment I've got my father-in-law staying with me and my mother-in-law they're just perfect examples of this she was the CDU for Merkel's party oh no sir she was the SPD volar right this putative Left Party he was the SPD of a CDU party Merkel's party and my brother was a fascist right I know they're all fascist now they all vote for the FD right and why is this well they live in Berlin which is the most one of the most cosmopolitan parts of Germany but if you watch the German news there's four channels they all do the news at the same time and it also the same thing and for 18 months they talked about develop the Auslander the wave of immigrants and you know these imagine what this is doing to all people psychology right and deep down inside one third of every population is racist right there's nothing unusual about the Germans everybody's just a wee bit racist right so this gets amped up and up top so first it was a llama phobia now it's climate change denial so I'm gonna go back and I lose my with these people right but their new thing is now yeah we know it's warming but we don't know we are doing it which is a bit like saying well we know that there's more people getting lung cancer but we don't know that tobacco is doing it's like we do know we really do right and there's a huge amount of denial that's concentrated in old people now is this well because they don't want to pay any taxes and they hate change in their old right but also there's a deep psychological problem no one wants to think that everything they thought the whole life is wrong and is going to their grandkids right that's just a huge psychic cost for these people a bear and alone but it's like no it's not true I have to think about I'm just gonna convince myself it's not true and then I'm gonna die and then everything will be fine you'll see right I mean basically my father a lot was attitude to life and so we need to stop them voting pass suddenly that's basically don't get said the other one is what I call the three martinis a day health policy so we should have bring compulsory smoking in three martinis a day for the over 65s right first of all they'll all be much more pleasant right they'll be much happier overall and we'll be back to the one catastrophic illness much lower healthcare costs everybody wins right turning the finally thing is bad to Stephanie it's all in the framing right these are real issues the good sides that are bad sides but as I've suggested with the stuff that we've been discussing at the macro on the mark that means a little lot there's so much that can be done and if you just get these things in place the effects are massively transformative so I remain the most curious of creatures a Scottish optimist and I'll leave it there [Applause] [Music] you

Channel: McMaster Humanities

Views: 91,767

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Id: cOGc6XZwVxA

Length: 52min 56sec (3176 seconds)

Published: Tue Jul 16 2019

Reddit Comments

[u/al-saqr]

Mark Blyth depressingly and cuttingly on point as always

[u/_Macho_Madness_]

i don't follow the connection between their healthcare and student loans