 I was privileged enough to give the Cain's lecture in London in October and given the nature of the occasion it ended up being an excursion into the history of economic thought which isn't actually my field and in particular I looked at the development of this doctrine of secular stagnation which is a phrase that you may have seen mentioned in newspapers a few times since about November 2013 when Larry Summers revived it. It's an interesting story as it happens how this doctrine came about it involves the collision of a very old fashioned British tradition of economic thinking with a much more dynamic version of economics that was personified in by a Danish American as it happens called Alvin Hansen and being an academic myself I tend to get very interested by this kind of stuff but don't worry that's not what I'm going to be talking about. It turns out that your views on secular stagnation might have an implication for how big you think the state ought to be and that's the angle that Jill and Dan picked up on and that's what I was asked to talk about so I want to talk about secular stagnation and the size of the state because I tend to do what I'm told usually. But I also thought I've brought it out a little bit given the nature of this audience and the fact that we're interested in Europe and so on and that Europe's going through interesting times right now politically and talk about political arguments regarding the role of the state. I'm going to suggest it's not an original point that states and markets should be thought of as complementary not as substitutes for each other as people on both the left and right would sometimes have us believe. So let me begin by here's the pen isn't it by showing you this this graph it's plotting world industrial output during two crises the Great Depression of the 1920s and 30s and our own great recession. In each case the graph is plotted where the major the peak immediately pre crisis is 100. So this is the blue line here this is what happens after June 1929. So world industrial output as you can see really collapses you know falls by almost 40% until about 1933 and then there's a sharp recovery. This is what happened during our own great recession. This is April 2008 following the red line now as you can see the first year the crisis was as bad as the Great Depression which was rather extraordinary. That's the angle that we seized on at the time when we first started drawing these things but then there was a very quick recovery after Gordon Brown saved the world if you remember that my kids thought that was funny when they heard that back in 2009. But anyway we did do better this time around but then what you can see is this is now 2010. The world is going Greek and we're all afraid that we're Greek and so on. Reflation is replaced with austerity and so on the thing starts to Peter out and at this stage we've actually been overtaken by the Great Depression series which is pretty bloody pathetic. And it's not surprising that this secular stagnation view of the world emerges when it does in either the former case or in the latter case. So when Alvin Hansen comes to Harvard from the Midwest he's not at all a Keynesian actually before he goes and he goes to Harvard and all of a sudden things change dramatically intellectually for him. So is it that he's in this you know Moscow on the on the Charles or is it that the world economy goes off a cliff just as he arrives. I think that probably had something to do with the fact that the world economy went off a cliff just as he arrives just as he arrived in Harvard and began to think well maybe there's something to this Keynesian business after after all. And similarly Larry Summers revives Alvin Hansen's old thesis which his uncle by the way Paul Samuelson for those of you who are interested in the history of thought have been very much involved in developing as it happens. So there's an element of filial piety here going on as well he revives it in 2013 late 2013 when it's clear that our own recovery is sort of petering out just a little bit. Now what is Alvin Hansen's argument I'll give it to you in words and then I'll give you some some some some equations but in words it's fine right. So one of the stylized facts about long run growth is that the ratio of the capital stock to output is roughly constant. Now it's not actually constant it does vary but it's roughly constant over the sufficiently long run. So if the ratio of capital to output is roughly constant they must be growing at the same rate and if they're growing at the same rate then the capital stock must be growing at the rate of GDP. And GDP by definition must grow at the sum of the rate of growth of output per capita plus the rate of growth of the number of capitals. So output in the long run grows at G goes right about the capital plus N the population growth rate and in most economic models G the rate of growth of output per capita is somehow related to technological progress. So you can think of that as being a measure of the technological progressivity of the society that you're in. So the capital stock is going to grow at a rate G plus N and since the function of investment is to add to the capital stock it's pretty easy to see that investment will be related to the growth rate of the capital stock and that the level of investment at any point in time will therefore be related to the sum of G plus N which implies that if population growth slows so there aren't as many new people coming on stream each of which has got to be supplied with a certain amount of capital or if the rate of technological progress G slows so that there isn't as many new technologies out there that need to be embodied in new plant and equipment then the rate of investment demand will slow. Now that's not necessarily a problem you know less investment demand well then maybe we consume more that would be the thing. Instead of spending our money investing in new plant and equipment we just we just need more you know or whatever we do you know that'll be fine but Hanson worried that savings propensities are very sticky they're very deeply embedded in human societies. Think about the Germans or the French and the way they save it's very it's a sociological thing. You can't just get the savings rate down and here's the problem because savings is taking money out of the system taking spending out of the system. That's not a problem if those savings are then transferred to the businessman who are going to invest it. The issue arises if there's too much savings out there and not enough investment demand then you get purchasing power being withdrawn from the economy and you might get unemployment arising as a result because of a lack of aggregate demand and the secular bit of this secular stagnation argument is that because this shortfall investment demand is being driven by the movement in long run variables like the rate of technological progress or demographic change you might actually end up with an employment problem in the long run that that was the worry. Now what does the long run mean I think it varies depending on whether you're British or American I think that the Brits because they lived on a small crowded island always had in their heads the vision of the world where there was sharply diminishing returns to everything because there's only so much land to go around and so there's sharply diminishing returns to labour to capital and everything else so when they thought secular they really meant secular. I think Hanson thought more in terms of long swings so there'd be times when there'd be a technological upswing you know the railways or invent the internal combustion engine or the internet maybe who knows you know but then there are troughs as well so Hanson you know didn't have a view that we would be stagnating forever actually if you read him carefully but he thought that there might be longish periods of time 10, 20, 30 years where there might be a shortfall of aggregate demand because it wouldn't be the investment demand to sustain full employment and then the question is what should we do about it and he thought that government should get involved and that's what his conversion was in 1937 when he sees the world economy going off a cliff again which shouldn't have happened according to his old way of thinking things maybe government fiscal policy should step in that's where he sort of meets Keynes briefly I mean if you want the same argument in letters that's how it works so investment as a share of GDP is equal to if it's net investment the change in the capital stock divided by GDP divide above and below the line by the capital stock so investment as a share of GDP is equal to the growth rate of the capital stock times the capital output ratio and if the ratio of capital to Q is constant then capital will grow at the same rate as output which by definition is growing at N plus G that's just saying the same thing as I said before for those of you who like that sort of thing so there's a claim here there's an empirical claim the empirical claim is that when demographic change happens so the population is growing more slowly and when technological progress is also slower then you might have unemployment emerging over longish periods of time you know over maybe a decade that's a claim that you can test it's an odd thing it's saying if you have fewer children being born if you have fewer people coming into the labour force you might end up with more unemployment it seems very counterintuitive but it's happening because if those extra people are generating a demand for capital that generates a demand for investment and so on that's how the logic works well this isn't very scientific it's just a scatter plot here I have the sum of population growth plus the rate of technological progress plotted against the unemployment rate for various periods sort of medium run periods you might say so there's the golden age of 1950 to 73 there's the interwar period and you know the claim is that when N plus G is higher unemployment should be lower and that there's clearly a negative slope if you look at the British data points the blues and actually there's a negative slope as well it's flatter but there is a clear negative slope if you look at the American data points with one obvious exception here that doesn't fit the story at all and actually we know why this is the case the interwar period is an incredibly technologically progressive period in American history just think about newsreels of world war one compare it with newsreels of world war two you know jet planes landing on aircraft carriers and all of that you know and think about all the white goods all of the electricity related things that were already consuming in the 1930s very very technologically progressive so this was just they just screwed up here this is just bad monetary policy you know that's that's the exception the way that proves the rule otherwise the correlation between both of those lines is about negative 0.8 so maybe there's something to it maybe there's something to it that's all I'm kind of going to suggest for now so then you want to think about well what should we expect going forward and actually what I'm going to say is I don't know I don't think economists can predict the future but it's still not you know useful to think about these things there are things that are more predictable there are things that are less predictable the things that are more predictable are probably demography we have some notion of where population change is going to go in the future now mind you they taught that in the 1930s as well demographic change you know population was at almost ground to a halt in Britain and it was sharply slowing in America in the interwar period and Cains and Hanson would talk about this and then what should we get we got the baby boom you know so actually after World War two so even something as relatively predictable as demographic change you know you can get wrong but most estimates think the population growth is going to slow I suppose most of us hope that at the global level population growth does slow now where is it going to be most of a problem well we know where it's going to be most of a problem it's going to be a problem in especially in Europe and Japan so in Japan population growth is already negative as you know and it's a very interesting question to ask in this kind of context how do the Japanese manage to sustain such low unemployment rates you know investment demand should be low in Japan it probably is low and yet they're doing something right with their labour markets that they managed to keep unemployment down to 34% in a way that we're not managing in Europe but Europe is not far behind you know and where is the demand for capital going to be driven by demography it's going to be sub-Saharan Africa pretty obviously and so anything that we could do to make it easier for people to invest in sub-Saharan Africa would be good because that would provide a productive outlook for our capital I'm thinking in global terms now because there's a world capital market these days may not go on forever like that but that's the way you should think about it for the moment I think when it comes to technological progress it's very hard to foresee the future I think it's impossible to foresee the future there's a big debate right now about whether the low rates of measured technological progress be careful about the words I use these are rough guesstimates of technological progress there's a lot of other stuff bundled up in these numbers as you can see they're lower now relative to where they were during the internet boom and so on the technology boom of the late 90s what you also see is that it's very volatile but that there was a clear slow down after the oil crisis this is American technological progress we're talking about here so there was a well-known technological slow down and the question is did we recover during the 90s or is that a blip or is it this that's a blip well we don't know you know we don't know if you're optimistic I guess you would say that hopefully we will get a wave of innovations in technologies involving new energy involving transportation and this kind of thing if we don't get those waves of innovations probably we have worse things to be worrying about than secular stagnation but we can also think about robotics we can think about innovations in the biological sciences and so I don't know what's going to happen one of the best known economic historians ever Simon Kosnots used to tell his students that if you want to predict the technological future go read science fiction so we don't know but we do know I think that population growth is slowing and that is something worth bearing in mind those are all factors that are lowering the demand for investment but they make secular stagnation more likely but there are other things working in the other direction that are lowering saving supplies we think they will lower saving supplies in particular we have aging populations so this is just a graph showing the ratio of working age to non-working age population and it's the working age people who are saving you know the people who are no longer working are dissaving so as this ratio falls savings rates ought to decline and they're declining even in East Asia which is important because East Asia accounts for a huge share of the world savings rate on the other hand another thing that I think is fairly predictable is that the developing world hopefully will continue to catch up on the rich world but the developing world's share of world GDP will increase and that matters because the developing world has a much higher propensity to save than the rich economies so as we move income towards the poorer countries that will tend to increase savings rates so it will work in the opposite direction from that factor which is lowering savings rates everywhere it's very hard to know what the balance is going to be that's the future what about the present here I think you're on maybe safer ground if secular stagnation is a problem one way to conceptualise this is to think in terms of what the level of interest rates ought to be so you could think about the demand for savings if you like investment demand that's driven by population growth and technological progress it's driven by n plus g and there's a supply of savings you know and people will save more let's say if the interest rates are higher in real terms and investment demand will fall off if real interest rates are lower so there's just a demand curve and a supply curve and the secular stagnation argument is that the demand curve is falling the demand curve for loanable funds is falling because population growth is slowing technological change is falling well in that case the interest rate will be negative and in particular the way that people conceptualise this nowadays is they say demand could fall so low that the real interest rate that would maintain full employment effectively will become negative as well and that might be a problem because negative interest rates are difficult to achieve now they're easier to achieve than we thought five years ago because we have negative interest rates in a few Scandinavian countries and yet don't forget that there's a wedge between the interest rate that the central bank charges and the wedge that businesses have to pay so it actually isn't clear that actually the interest rate that we really care about in terms of sparing investment demand will be negative as well well this is what's happened to interest rates I just put in this one for fun because it's you know it's so we have very low interest rates and they are historically low and we know they're negative in many places and there's no sign that they're going up anytime soon and that is a symptom of secular stagnation that's kind of what you would expect to see in a world where secular stagnation was an issue where there just wasn't enough investment demand and there are other symptoms of a world of secular stagnation that we can see around as we've had a series of bubbles financial bubbles as we all know and that's maybe what you would expect to see happen in this kind of environment you have not enough real investment activity driving driving the economy forward and so you know what are you going to do with your money there's not enough real investment opportunities so I invest in real estate or I invest in financial markets of various sorts and you get a series of bubbles and busts and as Larry Summers points out the bubbles can sustain economic activity by sustaining consumption for a while but it's not sustainable and you end up in trouble down the line so it's not mad to think that this might be an issue today whatever your views about where we're heading in the future I honestly don't know now if this is a problem then what should government do about it? Ever since about the 1980s, 1990s thinking about economic policy has sort of shifted we used to think about fiscal policy and monetary policy being roughly equal having to do equal jobs if there's unemployment you lower interest rates but you might also spend more money or lower taxes I think it's fair to say that since the 80s or 90s we tend to think that monetary policy is really what ought to take care of all of this stuff and particularly you ought to set interest rates sufficiently low that you can have full employment but as I showed you earlier it may be a problem to do that because the interest rate that you would need to get back to full employment might be negative and that's a difficult thing to achieve. Well what are the options? One option would be to engineer a higher inflation rate because if you engineer a higher inflation rate then a zero nominal interest rate can translate into a negative real interest rate and there are lots of respectable people actually who think that we should for example be thinking about raising inflation targets from 2% to 4% and I think that economic historians of the 22nd century if they were to look back at today and say God that was a terrible mess they got themselves into and can you imagine they had to have 4% inflation for a couple of decades well you might think we got away with it reasonably cheaply but there are people who doubt whether it's as easy to engineer higher inflation as is sometimes claimed and if you take that view then you might actually need fiscal policy and here's the problem which is fiscal policy typically means running deficits, it means spending more money or lowering taxes, you're adding to the deficit, you're adding to debt, there are issues of financial sustainability that come into play there unless of course you choose to finance the extra expenditure with helicopter drops of money you know by printing money you know give the European investment bank a banking license and allow them to create liquidity and spend it on things you know some people argue that's a good idea but if you think of traditional fiscal policy being an appropriate response in this context well then there is this issue about financial sustainability which is worrying which is where another Dane comes in a guy called Jörn Gelting from Orhus he pointed out that if you not borrow and spend but if you tax and spend that can also help to maintain aggregate demand and even if you've never done economics it's easy enough to see how that works if you tax and spend you're taking money away from people some of that money that they would have had otherwise would have been saved and so that savings is no longer going to happen and the government is going to spend it instead and this is where you get the famous balance budget multiplier and there's a very nice discussion by Paul Samuelson where he says if you're the sort of person who really worries about small government you know you're an old fashioned classical libra you really want small government and you find yourself in a world like this you know be aware that you may end up having to run big fiscal deficits and that might have a financial stability consequence and he says if on the other hand you're the sort of person who really worries about large scale government borrowing you really care about financial stability well then maybe the cost that you have to pay is to have a government that's gobbling up a larger share of GDP than you would otherwise want to be the case in other words just government on its own can be a stabilizing element in the economy and you know you could argue that if you think about the crisis in 2009-10 compare Dublin with some of the provincial cities you know there was money coming into civil servants pockets and being spent in Dublin and Dublin was never as complete the awful as some of the towns down the country where there was no income left being generated that's just a way of visualizing it but you can make an argument more scientifically that government expenditure is itself a stabilizing element in the economy and of course one of the things that has changed since the interwar period is that government has indeed become bigger as we know you know and what's interesting about these interwar theorists is they were very clear about the ideological implications of their arguments it wasn't they were upfront about it in a way that I think economists today aren't you know we tend to say that's not anything to do with us but we speak I think sometimes out of both sides of our mouths so that was what Dan wanted me to talk about but I also wanted to talk about a political economy argument for why you might want a state and this has to do with maintaining the political support for free markets a lot of my work has looked at globalization and anti-globalization backlashes there have been many points in history where globalization has gone into reverse and this has often happened because globalization doesn't help everybody it actually creates winners and losers that's what standard trade theory says and if the losers you know have a chance they may vote in politicians who will put up tariff barriers or put on restrictions on immigration or what have you so this is looking at the ratio of builders wages to basically the returns to holding land you know the price of an acre of land that sort of thing in America and in Australia and over the late 19th century it goes from 1870 to 1913 and you can see that this ratio is falling everywhere and it's falling because globalization what's it doing is connecting the frontiers which are empty with crowded little Europe and the frontiers are exporting food to Europe and the Europeans are exporting manufacturing goods to the frontiers so who are the big winners in America it's going to be the people who own the land because the demand for land increases price of land is bid up as they sell ever more food to us and who are the big losers in Europe well it's the land owners isn't it because cheap food is going to drive down land rents so this is a terrible time to be an aristocrat in Britain for example so in Britain or Ireland or Denmark or Sweden or any other country in Europe that you can think of you find that the workers it's the opposite workers are increasing seeing their incomes increase relative to the incomes of land owners so it's good for workers they get to eat cheap food bad for farmers or peasant farmers, Prussian yonkers, British aristocrats whoever what happens in France, in Germany, in Italy, in Sweden all around the continent with one or two exceptions only they move from having gone in a free trade direction for about two decades to slamming on the brakes and they put on tariff barriers and you can relate it very well to these income distribution effects of globalization so globalization is undermining itself migration, same story, this is taken from one of my books but what do I want to show you, for example Ireland here between 1870 and 1913 in Ireland the emigration lowered our labour force by 36% if you lower the labour supply by 36% what's that going to do to your wages it's going to increase them a lot, we think by about a third so we got a lot more prosperous before World War I it's largely because of emigration lowering the ratio of workers to land and increasing real wages the problem is it's the opposite effect on the other side of the Atlantic if you look at Argentina here for example emigration is increasing their labour force by 86% and that's going to lower their wages emigration is helping workers in Europe during the late 19th century it's hurting workers in the new world it's making Europe more equal because workers are at the bottom of the scale it's making America more unequal because workers are at the bottom of the scale this is what happens to immigration policy in a bunch of countries in the new world during this period basically this is an index of how open you are to emigration so completely open, completely closed and what you can see there's differences in timing but on average they're becoming more restrictive so in America a big change is 1917 when they imposed the Literacy Act he's going to exclude a whole bunch of Europeans you have to be able to read or write in 1924 and that's the end of their open door policy now the point is that if you plot those policy evolutions against measures of income inequality so the other graph there it's the ratio of wages to average incomes what you find is that there's a pretty clear correlation that emerges in the data these countries workers are seeing their relative position in the pecking order decline and guess what happens? these countries start putting on barriers to immigration there's another dimension of globalisation that undermines itself because of its effect on income distribution now are there analogies today well let's leave migration aside for the moment you can obviously that's an obvious one that comes to mind in terms of trade the big thing that's changed since the 1970s but really only since 1980 is that the north is importing manufactured goods from the south rather than primary products so we used to import primary products food, raw materials of all sorts they were essentially complementary to our own economic activities but now they're competing with us head on in manufacturing now head on so what's happening is we're shifting out of various lines like televisions which we no longer produce and so on but still there's more competition than there would have been back in the 1950s or the 1850s so this is a major shift so who are the equivalents of today's of the European landowners of the late 19th century those unskilled workers is who most of us would think of and in fact it's the case as you know that the unskilled in rich countries today are hostile to trade and they're hostile to immigration now there's two ways to read this the self congratulatory view is to say well they are just less sophisticated than people like us they haven't gone to college and they just don't understand right in that case you'd expect I think to see that unskilled workers everywhere across the world are hostile to globalization that's not in fact what you observe what you observe this is the correlation between being high skilled and being protectionist so this number here is saying that in the US the correlation is negative so in the US the high skilled are less protectionist but you move to poorer countries and the correlation becomes negative and then eventually reverses you get to poorer countries the high skilled are more protectionist and it's the low skilled who are in favour of free trade and if you were to widen the sample out further to such China and so on you'd find that coming out even more clearly in a graph so this is suggesting that maybe these people do sort of ensure at some level what globalization has been doing to them now what can governments do about this if anything oh yeah by the way I always show this because I was in France at the time I was in a little mountain village writing that book as it happens and all of the young people in the village in 2005 all the young people were voting no of course and I go up to Paris in Sciences Po and of course all the young people there were voting yes so it was very obvious to me what was going on but the anecdote generalises we know that there was a big class divide and we know there was a big class divide and Lisbon won in Ireland as well it was the working class areas that voted no and Dunleirian places that voted yes now and I think in both cases there was a globalization thing going on I know that the Constitution Treaty was actually about rules and so on but it became a vote about the market about delocalisation as they call it about the Polish plumber and so on and polling suggested that in the west of Dublin and so on during Lisbon one immigration was an issue at the door and we certainly found a big correlation between hostility towards immigration and voting no myself and Richard Sinett when we looked at that so it's beginning to influence politics now and it clearly is influencing politics more generally now if we look at the national front and various other similar parties so what can government do? I think the government can do something it's not just a question of you stay open and you say to hell with the losers or you give in to the losers and you go closed governments can maybe do things to maintain enough political support for markets that markets stay generally open so again I'll take you back to my period the late 19th century governments can do two things there's a regulatory state and there's a fiscal state what you find in the late 19th century is that they make all sorts of moves towards providing better worker protection so night children night work for children, prohibited factory inspection acts all that kind of stuff and they come in right across the board during this very globalised period and even more sort of significantly for the future is they start bringing in various sorts of social insurance protections so not just injury compensation so on the unemployment insurance old age insurance so your homework for today is to go back to the censuses of 1901 and 1911 and see if in your family also it is the case that your ancestors added more than 10 years to their age between 1901 and 1911 because that certainly was true in the Oerorks I'm afraid and it was true I think generally it's not just an Irish thing so they brought in the pension we aged by more than 10 years but the point is this is the sort of thing that might possibly maintain support for open markets insurance markets are risky insurance reduces risk that's kind of the point and yeah if you look at who the countries are that are going to the fore in this it's the smaller more open countries it's the Belgians, it's the Denmarks it's the Swedens and so on those are the ones who are bringing in into being the really heavy social insurance programs and so on so there's no sign of a race to the bottom here because that's something that you often hear globalisation we'd like to do all these things but globalisation means things are so tough and competitive that we just can't tax so as to provide these sorts of services well that's not how it worked back then actually it was the smallest and most open economies that did the most in the way of taxation and sometimes there was actually a race to the top so there's a nice example of a treaty between France and Italy in 1904 the issue was that Italian workers were coming to France to get social welfare benefits so what do you do and you know because the French could have just kicked them all out that would be a perfectly reasonable thing to do instead what they did is they said we will allow you to continue to migrate here but you will put in place the same soldier welfare protections in Italy that we have in France so there won't be welfare shopping so that's a nice example where actually competitive forces and globalisation led to a race to the top it's a bit normative the language bottom and top but you know what I mean and it's not just a 19th century story it's the point it's a late 20th century story as well this is a famous graph taken from Danny Roderick it's a partial correlation so it's correcting for things like size of country that are more open have bigger governments so no sign of a race to the bottom there as well so what's going on so he thinks that what's going on is that in more open countries workers and other people are exposed to more risks and so the state steps in and provides various welfare nets and safety nets social insurance and so on and that's what's going on it's demand for insurance so think about Denmark it's very globalised for 150 years and they have this black security that we all talk about and so on so markets and social insurance often times go together because of the demand effect now the people who are worried about or who look forward to a race to the bottom I guess emphasise that the cost of providing social insurance right that it may be more difficult to sustain high tax rates because you lose mobile capital or whatever but that graph shows us at least through the 1990s the demand side effect was was outweighing this cost of providing insurance effect but that's no reason to think that this will necessarily continue to be the case in the future however what I would just point out ok you can't see those numbers I'm sorry but has there ever been a group of countries more closely integrated economically in world history than the member states of the European Union probably not completely single market single capital market common labour market in many ways there's never been more globalisation than the globalisation that unites these countries and yet there are countries like ourselves that tax about 30% a little bit more of our income there are countries like the Danes that tax 50% and we all seem to manage to cohabit so I think that the notion that states are are handicapped that they can no longer act in a globalised world because the globalisation is overdone actually you just look at the different choices European countries are making and that proves the point or if you think about Cyprus putting on capital controls if you want to do it you can do it it's just a question of whether you want to do it or not whether the costs of the benefits are greater so it's time for me I think to sum up and I think what I want to say is that there is a tendency on both the right and the left to view states and markets as opposites you know you have more state you have more market and I think that's the wrong way to view it if you think about Keynes himself he was actually deeply conservative we think of him as a lefty now but he was actually deeply conservative he was writing in a world where communism was a real alternative politically where the expression of private property was a real alternative where governments getting involved in the minutiae and his view was no you get one thing right, just maintain aggregate demand at a level consistent with full employment and you can have private property and you can lead things to the market as best you can it was an essentially conservative project and similarly the people who set up the welfare states in Europe after World War II they were not revolutionaries that's the whole point, they were not revolutionaries they were essentially conservative the social democratic project was all about maintaining support for markets ultimately and so that's the line I think I would like to push that if we go too far in the direction of the market and at the same time suppress all of the things that can help maintain political support for market you risk having a backlash and maybe a question is what is Europe's role in all of this is Europe as keen on maintaining social protections as it is on extending the market I guess that's the thought I'd like to leave you with