 Thank you gentlemen for these excellent presentations and we try to find some overlaps or even better for the moderators some contradictions and I Think there will be a lot of interesting discussions also after The official sessions with your provocations probably some people would come to to talk to you privately, but let's do some official Looking for for overlaps and I I will use his quite provocative Hypothesis to to check whether you gentlemen can Maybe find an answer kind of he destroyed my whole theory courses at university in economics I mean all the contract you have things you were never there anyway Yes, I was and I thought that the steam machine and you destroyed everything so but maybe these gentlemen can help us to I But maybe you're right so there will be But if Klaus Weller self says forget about technology doesn't matter for growth We have a dean of the ETH here You do nothing else but technology. Would you contradict him that? Technology doesn't matter Should I be turning this on yeah, so I'm not an economist So I have to watch out that I don't go out too far length and ice I did wonder looking at the graph which looked more or less flat And one can't do counterfactual so I don't know how it would have looked if we didn't have these revolutions that That that actually have taken place and maybe there are some sort of a continual process of revolutions I guess one could study that over time and Perhaps there is some accounting for that in the curve But I guess it's a question for economists not for computer scientists. I do I do wonder though I mean of course you're measuring one thing there, right? And that is it's an economic entity and there are many other aspects to our life. No, we live we live longer presumably we Enjoy more of our lifetime or more well We don't work as many strenuous jobs and certainly technology is playing a role there absolutely and there's substitution So I mean without new new technologies What we would probably see is that the old technologies would survive much much longer and we would maybe have a even more flatter Curve or a stable curve at a certain level. I'm absolutely with you The only thing I try to say is don't count on any of these trendy things to pull us out of the slump that we have gotten Ourselves into it's a very natural normal process Which properly in the end also is is very helpful when it comes to sustainable and the development of the world and as with every empirical observation there might be the induction problem as the philosophers call it and That that that's just a past maybe quantum physics will change everything I mean it's interesting Observation if we have for example quantum computers, we can solve many problems that are business relevant Optimization actually in security. There are many things that you could solve quite efficiently with quantum computers That would really be a breakthrough But this is let me tell you a funny story I I sometimes sit on panels like that and also with ETH people and I had the pleasure of Spending some time with mr. Godzilla as I always call him You know the previous president I think was still president of the university And he always has this example that this little thing is like 10 million more Operate can do 10 million more operations than the whole of NASA's computer power had when they sent the man to the moon The problem is this thing still doesn't get me to the moon So this is what I struggle to believe but it can't kill you via the pacemaker. That's a very very nice And then at least many people in the banking industry would say that's probably so I Don't have a pacemaker, but is there a really a big thing around the corner? Maybe with quantum physics, or are we talking about longer? Yes We're referring to I mean there are many different things going on But I guess you mean that there'll be quantum computers which you can factor numbers quickly and solve optimistic Yeah, no security problems left. Well, actually that'll cause huge security problems So so all of our security whenever you have an SSL connection a TLS connection to your bank and things like that It's based on public key cryptography, which will be immediately broken. We have public key when we have quantum computers It might even be that the NSA perhaps GCH Q Has powerful enough quantum computers today that they can break cryptography. We just don't know What is your thinking about quantum computers? Well, I think it's one of those things that in the military We are always looking for the next technology which makes give us some advantage and that's that's a big question for us We're not worried where the money comes from we're saying right We want money to make the next technology work better than the last one And so if your submarine is not working today, how can we make it work, but better or get a new one? Which is simpler which does the job quicker and better than the one before and look at these fighter aircraft? We produce fighter aircraft after fighter aircraft of a fighter aircraft a lot of them never used But it's always been the new technology we've been looking for so I don't think it means anything to growth within the military But what it means we're looking for that new new idea quantum physics. Yes, it's there And I've been involved a little bit in in the states with NSA on this And there's no doubt that they have got some new systems on which they claim are going to change the world But I haven't seen their results as so far Then second scandalous hypothesis Dr. Wellershoff tells us politics don't matter and I think you spent your life to protect us and to put I think in order to Guarantee free Democratic Lifestyle and things Politics only matter in our world in NATO When we go to what's called the North Atlantic Council where we have all these representatives from the nations and they're all supposed to be tied Into the nations to have the latest thought from the nations But when you look around you find they're making up the policy as they go along around this table And they only afterwards refer back to the nation so as claus says it's all a bit of a false dawn in my view You're not the politics doesn't matter to a degree They will make take the decision in the end but whether it's the right one or not It's going to be a matter of Debate and considerable date both at the council and in the nations and the thing about NATO is it It has worked because we've had the military alongside the politicians And so we've had realism against beside politics and that has worked to a degree to a degree At least you acknowledge that Politics might matter a little bit With regard to war and peace oh and also to the way that we live I mean yeah, just imagine that we would Switzerland would leave the Schengen Treaty we would have Very strange things at the border you have to show your passport and things like that and people wouldn't want that So it's the way we live and this is all of that and I grant you immediately is much more important than economics My hypothesis was on for growth and for income and for financial markets But don't we do we no longer believe in the this idea that best system for good economics is Liberal democracy and we should fight for it and the best system to live in ever There's a very personal statement is probably not something that economists could make but the best system to live in is a liberal democracy But if you look at the growth performance of some of the larger countries in this world You might be persuaded that in terms of growth in terms of Creating income in terms of creating value in investments Something like the Chinese system is the better one and we now have a crazy guy in in Brazil I hope somebody does something before he's elected I'm sure the stock markets go through the roof when he's elected that the RI will will increase in value It will last two or three years and they all will everything will end in shambles and the society will be destroyed So it's it's not that easy I mean that with the if you if you open the FT and you read the newspaper or the Entity said you read the newspaper and they will tell you what this is all the politicians and now Europe will fall apart Nonsense Europe will not fall apart because of Italy's debt or deficits or anything. It will fall apart because of politics as a NATO official did you or would you if you were in charge right now? Care a lot about be worried about these political things like in Italy and the new rulers Brexiteers they're taking power. Maybe I don't think you do the military is is there and it's been established there for the last 50 Years or 60 years in NATO and what these it will be precious from time to time as there are I mean it hungry the Czech Slovakia places like this and I think what we've got to say is we just work through that for a period And as Klaus says these these people are there a liberal democracy what we're looking for and we try and persuade them to live by the ideals Which we've put forward in the basic statements Before Your speech I thought also that maybe blockchain technology could protect the Perfectly a liberal way of living a free way of living because there is no more power central power needed to control everything Not true Well, I'm blockchain it's like a hammer looking for a nail everybody is just screaming this will solve all of your problems It really depends on what the problem is So what what what problem you would like to solve and also depends critically on your trust assumptions And also blockchain is not blockchain. There are many different ways of doing it Let me just give one example to to to make the point about why this may not be the hammer for all nails I've been involved looking at questions of electronic boating and creating new government services and things like this and some people have said wouldn't it be nice if All real estate transactions were on a blockchain So the green book here in the Schweiz. Yeah, if that was on a blockchain Then you wouldn't you wouldn't have to have Governments responsible for this you could just have things under the people be much more efficient or be much more cheap But why do you have a what's the English for green book? I'm a real estate registry registry. Yeah, why do you why do you have a registry? I mean I presume you have a registry because if somebody is squatting on your land You can prove that you own it and the police will come take them off, right? So ultimately you need to have trust in the state for that to be worth anything And once you have trust in the state you can have a state-run registry Just as an example so you need to be very very clear about your underlying trust assumptions to know when this distribution makes sense and also of course if it's algorithmically feasible and all of the other aspects General could one say that trust is still the most important currency in the world and in in that Perspective there our article 5 is kind of the backbone of the of the Western narrative Yeah, I mean it has been and it continues to be trust We that's what we have to build ourselves on if we don't have the trust we go nowhere And we've had to say to people look you are now getting to the state where you're let's say Behavior, and I would take Turkey for example is unacceptable What we don't trust you anymore to do what you said you are going to do what are you going to do to put that right and We've had Deputations going to Turkey to try and persuade them. It's having some Some success, but it's not being totally successful at the moment, but trust is the is the Karee And it's the the paradigm of Western culture so far, but Donald Trump You don't have to Say something about him, but you may I I mean I think even a very Consciously very strategically is trying to destroy the idea of what you say should Should be the same today as tomorrow is he's introducing another system Well, I had some friends come and stay from Albuquerque last week, and they were they lived in Let's say businessmen they were all Trump supporters It surprised me and they said he's doing what's right for us because he said he was going to do it And he's doing it. I said what about the moral compass? What about the things about trust? We're not interested in that we're interested in ourselves, and it's really selfish There's a selfish element to people and that's what I was surprised about That's for an economist is not a surprise But I would I would I would caution us not to put all the blame on Trump I mean we have the same Developments in European countries in Germany and they're less powerful Switzerland was a was a I would say a trendsetter in that populist right-wing movement or but it's different. It was not as radical Yeah, yeah, even the way you get the children when the Germans says we're different. You don't like it It's it's so radical But any anyway anyway It started earlier actually when I lived in the States that was in the early 90s We had this election campaign between Mr. Bush and Mr. Clinton was a Clinton. Yes. Yeah, I know he's not the first liar in American politics You know what the two words were that that that were central there was trust versus change and the Americans voted for change Yeah, but still I at university those times I learned that Adam Smith was a moral philosopher at the same time So no not at the same time in the first place all in the first place So my question is would you still say that? These moral questions about values you talked about our values that are in danger are still Fundamental for also the our economic system. Well, this is where economics comes from, right? I mean Economics has been a normative social whatever. I don't not really sure whether it's a science but social endeavor Since its beginnings and we trace them back to antiquity And it's only in since tonight it's late 19th century that there was a stronger force that tried to Push normative questions out of economics In my world who was absolutely essential that we have that we gain The moral high ground back into the argument Otherwise we lose the credibility. That's one might the main fear I expressed there, right? We we should force ourselves not to make promises that we can't hold and the financial services industry is still doing it And that even louder so since the financial crisis So with Switzerland still being a real democracy in my eyes, I will have the participation of the people here by voting With this car given the cyber security threat matrix. Why should Switzerland introduce? This new e-voting mechanisms, are you skeptical about about this It would require a longer answer, so I'm not sure how much time I'm generous you have a minute. I'm actually okay. I'm actually very familiar with it and actually the Many people have the wrong impression about how e-voting works. They think you do something on your server It goes on to a computer something something on your client It goes to a server somewhere and of course if your client is corrupted or the server is corrupted You can change the results of elections Modern protocols are much much more sophisticated the ones that are currently being considered in Switzerland have extremely high requirements They have requirements like universal verifiability So everybody can check that the tally is properly computed. So even if the server is completely corrupted, I could find that They have the property of individual verifiability even if the adversary completely controls my platform I can still check that my vote was recorded as cast And it is possible to design protocols with all these properties Nevertheless, of course, it's very difficult to know that the implementation ultimately achieves what's being promised In Switzerland there are actually very high standards for doing this where one has to do it I mean talking about trust a paper one paper one man one woman It's a good thing because that's somewhere in a cellar. We do still have the papers We can't we can't it wasn't good so you can get the equivalent of the paper There still is a question. Why would you do it? Maybe this is a question for economists Maybe people like to take part in the democratic process where they go to their commander and they physically cast their vote But this is a different question and security quite a lot can be done There's an economic answer to it You want to lower the transaction cost of a vote and by that you hope that you can increase participation in votes and That's one of the major projects problems of the system direct democracy as you know is the water turnout is very low So if you have a control of 25 percent of the voting population you win the other 75 agree I always said if you want to stay home, you're welcome, but okay We have a lot of questions. So another proof that you didn't follow the your economics Just another kind of professor, I guess Peter chop That that was a politician in Switzerland And did NATO not provoke Russia by taking in the Baltic States Yeah, I mean that has been a question for a long time, but at the time that We took them all in from Eastern Europe in the Baltic States a great secretary general called Manfred Werner Who's a German was very far-sighted these states were going nowhere They were lost and he offered them a democratic Chance to join the democratic societies Russia saw that as a provocation, but I don't think we were wrong to do it I think it was right at the time to do it, but Russia of course is using that as propaganda now to Let's say push their particular cause and that's what's happened in Ukraine Easter and and the Crimea etc etc, but that's not only a question of taking in I mean we shouldn't Forget that the people wanted to go in NATO. Yes, they wanted us. Yeah in my world view It's the right of a people to actually choose their destiny But they didn't vote for it really we took them in that's what mantra I remember going with Manfred Werner to to Estonia and it was the people there said yes We want you but we were talking to the hierarchy of the country. We weren't talking to the people out on the borders What would be the reaction of NATO if two NATO countries are at war for example Greece and Turkey How do I answer that we've watched this for years and years and years little little islands have become Problems there's been incursions by aircraft etc We have experts in all the military headquarters on how to deal with this and it's such a big subject I will even want to touch it What I would say to you is Greece and Turkey is a particular case and we've managed it for the last 50 years And I think we can still manage it, but if we did come to that situation I think NATO would find it extremely difficult and we would we would really it would test the alliance to the To the limit it really would What model should we use for asset management for asset allocation? I think we know more than nothing. I mean this naive allocation assumes we know very little and we don't have no clue about the future That's not true But as the starting point the naive model is better than what we do at the moment So if you add to it the little things where you have Reason to believe that you have knowledge that you can forecast for example Be it correlations or or returns you might want to change away from skew away from equally weighted portfolio But otherwise I think the only Solid and an in line with your ethical standards the cfa is the only way that you can provide that service to clients Is to do a naive allocation? Otherwise you have to leave the organization I have a problem with the handwriting here isn't the issue Or this can oh, it's about the it's about the soccer game tonight. I think Or the upper. Sorry. Can you read it? I should have asked for iPhone communication Maybe because this why I'm really sorry Let's invent some questions Or find somebody Can we go back and reduce complexity? To be more secure in in the digital world As individuals you can but you may not want to so throw away your smart phone and use a dumb phone Throw away your computer and use a notepad go back to faxes Or use the new internet because I had the pleasure to moderate another conference and there was a colleague of yours Adrian Peric Yes, and he told us I don't know if that's right They are inventing a new internet No, that's so I can say something about that too that I didn't want to kind of toot my own horn But that was the little teaser I had at the end of the slide so together with two colleagues at eth We're working on a new internet that you can run alongside the old internet and get substantially higher security properties such as freedom from denial of service attacks Freedom from kill switches ability to isolate what's happening within particular countries or regions The protocols are orders of magnitude based on simpler than existing protocols on the internet And it works and it's being used by by the swiss administration and some swiss companies today Well nato should be desperately interested in that Okay, so they might eat money Is it very expensive? No, the professor peric told us it's just for a few thousand francs Exactly, exactly. In fact, we could have the most secure put up a network in the world in switzerland We worked out the price for the price of about 200 meters of autobahn That's worth it depending on the 200 meters if it's in the content. So my last round would just be Following questions might we have forgotten some hidden black swans completely tonight or some hidden stabilizers But might there be something that we didn't talk about and we should have or not And from the technology standpoint There are the possibility for breakthroughs So I mentioned one possibility networking and also that the engineering methods mature But that won't be enough. I mean there's a question of who will pay for security And who wants security and not all parties want it and most aren't yet willing to pay for it Hidden black swan or stabilizer? I think it's funding funding is our I mentioned it, but it's our Real problem if you're going to have defense you're going to have to pay for it And you have to look at what you want Because at the present moment we've we've learned to look at the model that's available tanks missiles aircraft Whatever are we going to change that paradigm and go somewhere else? And that's I think is a black swan. We've got to ask ourselves Where do we want to spend in the future? Your favorite black swan or hope my favorite black swan is the media. We didn't talk about the role of the media Happy about that because No, it's interesting. You're completely right. I would probably agree. Yeah, it's a strike We have a structural problem there. I think with the good journalists are leaving and starting to moderate Houston's panel sessions um Yeah information management as well Russian's law in in the media right bad journalism drives out good journalism to a very large extent that that makes us Still media like new york times washington post trying to Set a counter But it's a real niche right and if you live in a country that where most people don't really speak english and use english media That's very difficult and you look at the swiss media lens. Can I just add one propaganda? We are tuffling today for a great deal from propaganda, which we listen from all over the world And whatever situation it's very difficult the real facts on a on a something that's happening And I think that's from the defense point of view Your action depends on knowing those facts And in the in the in the media really getting lazy. I mean, we have a very strange situation in this country One national institution has just or recently launched the biggest state intervention ever Of around 600 billion swiss francs. That's one one one time gbdp And nobody is criticizing that this is swiss national bank Who is completely over marched its its its mandate and there's no And media is absolutely silent, but that's the black swan. We didn't talk about that Not the national bank, okay But there's but fundamentally I think I would disagree with what you said The the the first picture I've shown In my my interpretation shows how resilient the world is or A system like the u.s economy is and I think the swiss economy is the same europe is the same The problem is a lack of redundancy. I think that's just the cyber security problem put in another Phrasing right if we all use the same system the same ip protocol to put it onto the internet We have a problem But as long as we remain redundant as long as europe remains 27 countries 26 For sure, I think We don't need to worry that much and and finally i'm i'm not a swiss. I mean i live here since 34 years or something Um, you can see how how how appealing your society is to foreigners that I didn't get a passport One thing I think that that That we shouldn't lose out of sight is and this is what the swiss direct democracy system is built on that people are not stupid I think we might be tempted to Be swayed in one direction at the moment as the western societies But I I have absolute absolute faith in intellect and intelligence and And new technologies actually will help us to get rid of the propaganda As well as not only a threat, but it's also a strength Let us conclude on this positive note and before handing over back to our host I I will corroborate what you say with winston churchill mentioned already But uh, let's also quote him one more time because he said of course I'm an optimist that doesn't seem to be much use in being a pessimist Thank you gentlemen appalled for my I'd like to thank our panel very much. I'd like to thank you the audience But we have some small gifts for our panelists before they leave and I think I'll start with our Our star pessimist Claws Maybe you have to work on your message I don't have to work on the message that on the delivery The audience Claws, uh, I think one of the things we've learned from you is that we can rely on the long-term Uh trends and fashions to continue Despite rationality and I want to give you this package of tulip bulbs So that you can sit in your garden and remember that all these fashions have come and gone since the time of the, uh, dutch tulip, uh, And now uh for nato as we know from uh from tim's chart Switzerland is not part of nato, but we'd still like to make a small contribution of a swiss army knife Thank you, tim And then uh for david, um With all the cyber security apparently there's no security anywhere But we've noticed that there's a small little gadget that will protect your credit cards from being scanned I'm sure that david will tell me that this is absolutely, uh useless, but just in case we give him And now for uh, stephan and isabel The journalist Always looking for truth And bringing out the truth and for which obviously we rely heavily But ultimately in these days it might be, uh In vino veritas So we give a bottle to stephan and to isabel with our thanks Thank you so much But our biggest thanks is really to you the audience and uh, thank you very much for coming out. I think that For my from my side, it's been very enlightening. We get passed the sound bites past the tweets And I think that that's the important issue that the uh, uh, well-informed adults Making up our society is what we really have to rely on and so thank you very much for, uh, coming out to be Perhaps a bit better informed as a result. Thank you very much I'd like to invite you now to enjoy, uh, apro riche outside, uh, provided by the barrel lock. Thank you very much