 Let's first discuss some of the elements of your speech. The first thing I think is really what I would like to ask each of the three panel members is to go back to this idea of the good life. So we'll start with Wim van Goghberg first. We have a long distinguished career at the Rabobank. You've been retired some time in our chairman of various charities but also chairman of a non-executive board member of various companies. Twelve years ago you retired as chief financial officer of a wonderful Rabobank. Of course you were not paid as much as bankers are paid today, but you were comfortably off. So is there a sense that you could afford to now run the Nexus Institute, your chairman, to fill in your life in a more interesting way? Whereas in the book, is this good life, is it something, is it a fairly elitist thing? It's a question that maybe it's tough to say to somebody who's trying to struggle to make ends meet. And they say, you just work 15 hours or work less hours and they can't even buy the food for the children. So in what sense is this good life talked to you as an economist? Maybe partially collared by your own experience. Is it something for our type of people or is it really something which we can offer to the common man as well? I don't think that is the question whether a small number of people have high income or does that have an effect of the good life of all society. There it comes more to a, let's say, a policy of bringing employment to give people the chance to participate in a society. I know sort of an even distribution of income, but that has some value of course. But I guess you should make a distinction between a personal income and a social policy. So the quick intermezzo, could you just give a yes or no answer, is for you having a relatively equal distribution of income, part of your good life? Yes, because it's the basis of respect. You can't have respect if incomes are too unequally divided. And some of your policies will go in that direction as well, but you have a progressive consumption tax and things like that. More equality. Okay, now we come to your room. Jürgen Kliem is, so again the same question to you as a reaction to the lecture and then we go more details. What's the good life for you? Are banks really contributing to the good life? Well, have a go. I mean, if you ask me that question personally and also reading the book, which by the way I thought was a great book, I think the distinction between leisure and work is not so black and white. And I believe very much in the vein of the other speakers it's really about the quality of work. And so I would seek progress more in terms of making work fulfilling than to say, you know, it's black and white, you know, work is a slog and leisure is great. Personally, I can completely enjoy my leisure. I'm not somebody who works all the time, takes no holidays, etc. But I do think that work also needs to be fulfilling. It's about participation, but also about using your scales, developing, doing new things, being creative, making a contribution to others. That would be my view. So you need a well-functioning economy. And I think banks can contribute to that, can. I mean, there are of course a number of conditions for that which maybe we'll talk about later. What can we do about the current financial crisis? And have you got any views on that? I've got lots of views on that, yeah. If we want to fix this financial crisis properly, I think we should have less fixation with short-term economic growth. Because the economic problems that we are in are extremely deep. And I think, for example, the British government made a major mistake by basically telling the British people, it's going to be tough for a couple of years, but by the end of this government, we should be out of the abyss. I think the true story should have been, it might very well take us two governments, two periods of government. Ten years, ten years. Ten years to get out of this mess. And I think that we are so central bankers and politicians are so extremely worried about there still being an economy tomorrow that we're doing all sorts of things that are extremely risky. Like monetary policies are extremely unorthodox. And never before have central banks increase their balance sheet to such an extent as is happening now. And we do not know what the long-term effects will be, but it is extremely risky. I also think, I just said that I think the basic problem of the financial crisis is the undercapitalization of the financial sector. And I think it does not have to... You said it in a bit normal words. Yes, so banks are working with too much debt. When things go wrong, just a little bit, they go bankrupt and they have to rely on the state. That is basically wrong. It's a state-supported economy. So when they make profits, they have bonuses. And when they make losses, it's for the state. Yes. And that is the moral problem of the financial system, but it's essentially an institutional problem. Do you don't see a problem of lack of aggregate demand? No. Well, of course that is... I mean, do you think the unemployment we have now in the UK, or in Europe, is it voluntary or involuntary? No, that's a big problem, and it has to do with a complete crisis of confidence. But what really should happen in the financial sector is that banks and insurance companies are adequately capitalized. Why are... And I think everybody knows that. The policymakers know that that has to happen. And how do you capitalize them? What does it mean to capitalize? It's happening because in the short run, it might lead to less extension of loans. So in the short run, it might lead to a little bit less economic growth. I think those dangers are exaggerated. I think if you really require banks to have adequate capital, what they will... They cannot give these high salaries anymore. They'll have to moderate their remuneration. That way they can recapitalize much quicker than is happening right now. But the fear of short-term economic downturn, which is in the current circumstances extremely understandable, but prevents us from taking the measures that are truly necessary and true reform of the country. So summarizing you, perhaps a little bit, making a bit of a caricature of you. You say there may be an effective aggregate amount, there may be a change in unemployment, but that's not my concern. I'm a bit like Dr. Panglos. We have to seek it out, to really solve the financial problem of the banks. They have to be recapitalized. That means that they have to build up their balance sheets. That means that they're not lending out enough money to the economy, and the economy is a bit slow. We just have to wait it out in 10 years. Some problems you just need to sit out. I hear it very clearly, and it's a very strong view. You don't claim the word of a real banker. My view is... Hans has been a banker in his young days. I work for a government-owned bank, but anyway... So my view is that a lot of what was said is I don't disagree with. Also, like you were saying earlier, that also the IMF is learning lessons from this crisis. So I think the crisis, in part, is learning technical lessons. Bad economics, good economics. But what I must say, I do like very much about Professor Scalelsi's book is that I think there is also a moral element to it all. Because the technique will not bring us to the perfect understanding. There are things we don't understand. It has to do with behavior. It has to do with behavior that is not always something you can steer with economic incentives. It has to do with personal responsibility. And I think it is interesting then to look at the crisis in Canada. Canada is a country that has exactly our economic model. Capitalism, markets, modern economics. But went through the crisis very well, and that is because there, in policy, in the banks, there is just a bit more conservatism. People are just a little bit more prudent, a little bit more careful. Some modesty, some moderation. And these are words I see in the book, and I think that they are part of the story. As the panel proceeds, I start calling you in. That's okay, thank you, Sam. I agree also that the part of the financial crisis is that our financial system, especially the banks are very well undercapitalized. So that should be restored in one way or another. And I tend to agree with Hans that if the price for that will be in the coming period a lower rate of growth that would be acceptable. But it is hard to manage that, to manage expectations. And what you see at the very moment in time, since the, well, our institutions, and especially, of course, the European politicians are not able to define a sort of path that leads into a new situation, it's hard to get trust for that. If you see the opposite in the United States, for instance, there they also recognize that the banks were very well undercapitalized after the Christ, and restored it in a very short period of time. And that is important that you do that. So that's one remark. The second is that if you don't do that, it's very hard to handle the lack of demands because as long as you have not a trustful path to a new situation, governments are more or less restricted in their doing because everybody is uncertain about it. But I think the main thing, and that adds to what June has said, is that we should make this not a sort of technical debate about 10% of capital ratio of banks or whatever, but we should have some kind of an idea what kind of banks there will be in five or seven years' time, not only from a safety point of view, I mean that you bring back then the probability of default because they are better capitalized at that moment in time, but what is their asset side? What kind of activities do they give credit on? How is their connection with the real economy? And I think it is very important that you define that because only talking about a reduction in budget to 3% of national income or capitalizing banks on a higher level is a too abstract approach to the system and you never can get public support for that kind of idea because you only see the negatives of it. So what you really should try to define is what I would call a new social contract between the financial sector on the one hand and society on the other hand, that you define what kind of social problems you can expect that the financial sector will be helpful to solve them. Maybe you talk about, let's say, alternative sources of energy. You can talk about all kind of things, but as long as there is not a sort of common goal for why you do all these things to bring banks in a better position in relation with society, I guess it will help you with that. How could banks be reformed in a way that they would contribute in some way in order to do good life? The first step in reform is to make them much more customer friendly. That's probably the most important thing for most people that they actually get a service from their banks which satisfies them. Of course it's very important to have a banking system that doesn't collapse every 10 years. For that you do need a lot of restructuring. I'd have more competitive banks that separate out various things. All these are well discussed, but I'm not actually that interested in them. I'm afraid not being a banker. If I were a banker I'd be immensely interested in that regard this is the core of the problem. Banks must be allowed to heal and they must be encouraged to heal and there are lots of ways this can be done and it's very, very useful, but that is not the way to get out of the present hole. The banks are not part of the solution for the present problem. They're too damaged to do that. And as for the idea that we wait 10 years, 10 years, that's 20 to 30 in the life of a young person. And what's more, I would quote Keynes, in the long run we're all dead. If you say, well look, it's all very much now, it's all very difficult because the banks have to be given time. They've got to be recapitalized where they're going to get the capital from. This is a very serious problem. Let's have a new social contract and all blah, blah, blah, blah, blah. Meanwhile, there are a lot of people whose lives are being completely wasted. Not only people who are actually unemployed, but people who are much less fully employed than they'd like to be. So that's where my moral, I get very angry when I hear a lot of this stuff about the dangers of the technicality behind it. I have a great respect for that. But it seems to be missing the point. But currently, the British government is being heavily criticized along these lines for not doing enough to support the economy. It is already, perhaps people will find this very abstract, but they already have a debt of over 90% of GDP, it's growing at 10% per year. But why? Approximately. But why? Well, not because they are not spending enough. I mean, to me it is beyond belief that the British economy can get out of these problems by the government creating even a bigger deficit of over 10%. That is going to be paid by those young people that are waiting for opportunity on a job market, they will have to pay that debt in 10 years' time. And so it's very easy to say this is at the expense of the young generation who are now jobless. Well, first of all, the British economy is still doing relatively well in terms of jobs. It's shrinking. Shrinking. But these people, yes. And all the forecasts say that it's shrinking. And it's shrinking because of the tightening of the fiscal policy of the government. If the British economy would grow more by increasing deficit spending of the British government, it would be one of the best-performing economies in Europe because it has a very high deficit already. The problem is not fun. The problem is not fun and there are no fun solutions. Okay. Sir. Everyone who tells you that there is a fun solution can please speak in British and English. So having heard what some members of the public are saying, I think they've got a point. And I'm going to... So what they're saying I will translate is a kind of certain anger with the kind of saying saying that look, there is no solution. We have to stick it out. Because I think if I know you well enough, you have a solution. And let me put it. So monetary policy is kind of run its course because you can't lower interest rates anymore. We see Europe, the Netherlands and Germany in particularly suffering from some budgetary anorexia that the kind of... The more we stick within 3% the better. And I think... And you get angry. So what would you... You're the Chancellor of the Exchequer, the UK, but for all of Europe? The world, maybe. Well, let's not go too far. What would you do? See, I think I'm not only morally angry but quite intellectually angry. I understand. I think with respect, I think you've got the story the wrong way round. Governments are trying to cut their deficits. They are trying to cut their deficits and their deficits are growing. Why are they not successful in cutting their deficits? They are cutting spending. They are cutting spending and their economy is shrinking. Now, one of my position is that is not the way to reduce your deficit and it's going to fail. Let's go back to some of these general questions and maybe the panel members don't mind, but let me also rephrase. Have you got a particular question? Because I have many questions to ask on these general issues because now I have to put it back to you and ask an inspiring question for Mr... Well, I also got the impression that we have somebody from the Anglo-Saxon world coming over to the Rhineland world and telling us about how the Anglo-Saxon world is not working well and how they should strive for less work. Here in the Rhineland world, we are actually doing that to more extent. Is it not so that the Anglo-Saxon world should simply use our more Rhinelandic models and use our Rhinelandic models? So we had some debate on this earlier on, but let's go back to that. So we noted before that in the US and the UK they work many more hours than in the Netherlands and the rest of Europe. Is really part of your book be read to say that British readers be a bit more like the Rhinelandic models? Well, the answer is yes. Yes, is my answer to your question. And in fact, in various bits of the world in various bits of the book, I didn't have time to go into it this morning. We do draw on the Rhineland model and also on Scandinavian social democracy. We also draw on Catholic social theory which has been very influential in the creation of the European and the German social market economy. We say there are different models of how a capitalist system works. And we ask a particular question about how the Dutch have managed to do that. So it's not a question of... You're right. I mean, in a way, we're complaining about our own conditions in Britain and the United States and how they're fallen short of what other countries have been able to do. But we still think, having said all that, there's a bit of a lag. I think you could do more along the lines of economic possibilities for our grandchildren. But certainly, the Netherlands would be very high up in... Keynes would be more favourable to what's happened in the Netherlands than it would to what's been happening in the UK. You didn't have a Thatcher or Reagan and that was your great benefit. I'm a philosopher who's interested in economics and it seems to me that in your definition of leisure there is quite a lot of work because in fact you call it work freely, joyfully undertaken. You call it purposefulness without purpose. So would I be right to think that in fact what you're saying is that the good life consists of having a purpose and doing things and creating things and making things and enjoying that life. But only some of those hours should be spent in paid work and we should liberate the rest of the time to do that with our lives. Having your own purpose. The crucial distinction between the work is that it's not working or a creative project. We've tried to distinguish between extrinsic and intrinsic reasons for activity. We're in problems with semantics and they're quite difficult because we attach rather precise meanings to work and leisure and we're trying to overcome that polarity. But I'm not sure if I'm exactly the right language.