 Professor Matsukata is the author of three books. The first was the entrepreneurial state, debunking the private versus the public sector myths which was published in 2013 and investigated the critical role the state plays in driving growth. Her second in 2018 was the value of everything making and taking in the global economy which looked at how value creation needs to be rewarded over value extraction. Both of these books were highly acclaimed and to give one a recent example of the way that she's regarded the high profile Rease Lectures in December 2020, the recent series of them which was given by Mark Carney, the former governor of Bank of England. He and his lecturer acknowledged his debt to Professor Matsukata when he made his assertion that society gives insufficient attention to the moral value of goods and services and too much on their financial worth. I could go on at many others but that was a fairly recent one from somebody that we'd agree has been quite important in the economic of the UK over the last many years. Anyway her latest book published at the end of January has the same title as tonight's talk and having read this book which is somewhere on my desk here, this blue rather interesting book, I reckon that we're in for a very stimulating evening. She's got some fairly plain speaking in her book and this sentence on page 137 I'm able to quote to being an accountant one has to be very precise. This sentence on page 137 is aim straight at me and a vital aspect of a mission orientated approach is to represent different people and perspectives and not just those of the elite experts often quite males in their 60s. I need say no more Professor Matsukata welcome. Oh wow that was hard hitting thank you Richard thanks so much and it's especially wonderful to be talking about this theme of course in the you know homeland of Adam Smith where there's so much misunderstanding of what even the market means out there people stupidly think that you know the free market means free from the state actually Adam Smith when he talked about the free market it was it was free from rent, free from rent seeking you know all these things that today we know you know leading to a rising level of inequality and problematic distribution of wealth which is actually collectively created but often privately owned and so what I'd like to do is to kind of have two sides of this talk one is about all the problems we're currently facing and of course we're facing immense problems not just a COVID pandemic but also the climate crisis and so on. I want to look at the underlying structural features of these problems not just the symptoms of which these crises are just symptoms and I want to actually spend most of the time and I've been given an extraordinary amount of minutes to speak to you 50 much more than we often get in lectures I'll try to keep it less than that so we have even more time for Q&A but I want to spend most of that time actually on the solutions and that's what the book actually tries to focus on I've been working with governments globally including the Scottish government I'm one of the advisors of Nicola Sturgeon and the Council of Economic Advisors we're actually meeting tomorrow for three hours so great that this is the aperitivo I'm Italian so I think of it as an aperitivo to the China, aperitivo to the dinner about these issues about how do we bring purpose public purpose and public value to the center of how we actually think about our economy but especially the center of how we design a public policy so the political economy so on that let me just begin given that my screen share is already on which is useful first just a bit about the context I've already mentioned a bit about it you know the COVID moment the COVID crisis the tragedy that globally people are living through in different ways because we know that it's also distributed in different ways has really thrown an immense amount of problem solving to countries you know whether it's the test and trace system which in the UK we decided to roll out through a consulting company Deloitte and others whether it's the vaccine rollout which again in the UK we've luckily decided to roll out through the public health system whether it's the digital divide I've got four children and I know that their ability currently to access their human right to education is very different from many children and students globally but also in the UK even in London that are you know much less lucky than they are in terms of the social economic kind of background that they come from so these are all problems that need to be solved and it's it's quite extraordinary just how badly let's just use you know really simple words you know we've confronted this crisis globally and at the same time differences between countries and how they've confronted it I was very interested in how even developing countries like Vietnam or Kerala a particular state in India have actually succeeded more than some very rich developed countries precisely because they've been investing actually within their state institutions or what we might call the public administration anyway there's differences let's just put it that way and you know this is a real learning moment what can we learn about the strength or the lack of strength of global health systems that is absolutely required in order to govern a crisis of this size and you know in the end it's not going to be solved by any one actor whether it's business investing in vaccines or public sectors investing vaccines or the public sector governing problems of the rollout of test and trace or you know it's not one actor business or government or philanthropies are going to solve it it really requires a new thinking about partnership but partnership that's concrete in terms of delivering the things we actually need you know on a daily basis and yet again a real waking up moment of just how badly prepared we've been you know we call them essential workers but most essential workers are not deemed essential at all in terms of how we value them in GDP and I'll come back to that later and before this crisis hit us and during and after of course we've had the climate crisis and you know February of last year so February 2020 the TV screens and the newspapers were not of frontline workers in hospitals but frontline workers fighting fires and you'll remember in both Australia and California or where I'm from which is the Vanito part of Italy Venice was you know had that huge problem around the floods and all these are kind of symptoms of climate change and yet we're not getting any closer to solving that Greta Thornberg when she was 16 now she's 18 said you know if your house is on fire what do you do you don't just sit there and debate what should I do what's the fear you're going to tell me of what to do you get the hell out and we're simply not getting out of this crisis fast enough I've got some numbers here that are you know bewildering and just last year 55 billion dollars worth or euros worth I'm not sure why I have dollars here for the EU but anyway 55 billion in subsidies were given to fossil fuel companies in the EU and also 56% of the COVID-19 recovery funds in the G20 countries given to energy companies have gone to energy to a fossil fuel project so you know the truth is we simply are not getting out of that house that's burning we're simply burning it with different types of materials and transforming you know just kind of redistributing where the problems are and so really what I want to do in the next part of this talk is to say you know these are just symptoms these are symptoms of how unprepared we've been in terms of our public institutions are symptoms of how our corporate governance systems are extremely problematic focusing on short-term returns and really demolishing really biodiversity in our planet along the way but why do we need deep change we need to understand the structural foundations of these problems and let me just spend a bit of time on this and then I promise most of the lectures on the positive side and the solutions and what to do about all this so in terms of what's wrong I've broken this down into three or four points the first is finance right you know there's all sorts of different actors in the economy markets are outcomes of how we shape finance how we shape business how we shape government how their interrelationships are structured and on the finance bit we simply have a huge problem which is that finance has been financing finance so this graph here is from the bank of england showing just how much finance insurance in real estate fire is the acronym coming back to the previous images of our forest burning but in the sense that it's financialized fire in the UK something like 80% of our finance goes back to the financial sector only 20% of it goes into the real economy and this is very much seen in this graph here from the bank of england which shows you the rise of financial intermediation compared to the rest of the economy and this has been also galvanized or how do you say catalyzed and wrongfully come into being from how we have also structured in some cases our responses to different types of crises even now with these help to buy schemes you know why would you want to help people buy homes when they can't afford those homes because their incomes have not been rising for the last 30 years so really the problem should be more on the supply side getting more affordable homes out there not getting people to think they can through help to buy schemes and you know financializing that their their ability to buy and never pay it back and you know what's interesting is we often misunderstand public debts and think that it's the same thing as a household income saying you know can you actually afford to pay it back and I can come to that if you want in the q&a but it is true for households if you're going to be buying stuff like homes you better over the next kind of five ten twenty years at least be able to pay that back instead if your real incomes aren't rising that's a problem and in fact private debt not public private debt to disposable income is at record levels in the UK and then in the US as well and this is part of the financialized characteristic of our economy and the second problem is what's happening to the real economy right I was saying there's not enough finance even going to the real economy well that that does go to the real economy and how we have our businesses structured globally is incredibly extractive my previous book called the value of everything which yeah Mark Carney thank you Richard for mentioning that very much based his first lecture on distinguishing objective versus subjective theories of value and looking at what happens when we confuse price with value you know this is this is very much a symptom of that that when you have a real economy by that I mean companies that have factories that have you know production that are producing and hire workers when those companies are not focused on the long run and are not reinvesting their profits back into production but are actually extracting it to practices like share buybacks we've got an even greater problem this figure here is from the work of Bill Azanik who's shown that over the last 10 years over four trillion dollars have been used by the top 500 companies globally just to buy back their shares to boost their stock prices to boost their stock options to boost surprise surprise executive pay and this is a deep structural problem which has also been rewarded you know the fact that we actually have a tax system an incentive system that has allowed that is very much part of the problem and this is why you know in in illuminated circles now and then you hear a business saying they need to change away from this short term maximization of shares towards a broader maximization of stakeholder values so investing back into workers training programs communities and planet the problem is this isn't really leading to much change I mean you can look at all the different metrics we're not actually getting this kind of new type of business model it's sometimes there but more in terms of corporate social responsibility or ESG environment and sustainability kind of a targets inside companies but it hasn't gone to the center of how we actually create wealth in the first place so we don't have to you know just redistribute and pick up the mess afterwards and this brings me to the third problem which is government it's not just corporate governance that's a problem it's government governance that's a problem governments have at the best you know at the worst bought into Reagan's point which is get the hell out of the way at the best bought into the more progressive notion that yes of course you're important but you're only important to fix market failures so you actually have to wait for things to screw up until you come in and by definition you will always be too little too late so with climate change is seen as a negative externality that requires a patch on the system like a carbon tax okay fine we would very much welcome more carbon taxes but is it really just a patch in the system that we need or if great things like basic research and you know clean water are seen as public goods that are confronting the opposite problem which is positive externalities where you don't have enough government investment so pollution is maybe too much bad investment these public goods are too little investment in them if they're seen as simply fixing a positive externality problem again important but can you really patch your way bandage your way you know out of the current system which has just these real kind of structural flaws and the answer is no i've been arguing we need a market shaping in a market creating framework not a market fixing one and you know recently there was a Tory Lord Agnew this is his face here who said something that i found so interesting because i've been arguing it for a long time but i didn't have that vocabulary that he used or that word he used which he's you know he said when governments don't understand their role they end up outsourcing everything and look at both brexit and covid massive outsourcing and the billions of government capacity and then they kind of get it wrong and he said this has been infantilizing the public sector and i thought it was such a interesting way to frame the problem that if you don't even get your role as going beyond market fixing putting words in his mouth but that's okay then you you actually don't make the investments within government institutions to create the kind of value that you need but you also lose the ability to do so you lose what in the business literature they call absorptive capacity sounds very fancy but it really literally means kind of that strategic ability to understand your environment to have the capabilities and capacity to help kind of govern it um so in one part of the book which um thank you richard for showing this is the uk version the us version which is orange just it's coming out in a couple weeks i go through all the different myths actually which are assumptions they're theoretical assumptions that have led to this problematic understanding of what government is for and you know i i went through the kind of initial problems that we're facing as symptoms you know the covid crisis climate change massive kind of symptoms of these problems but they're symptoms of a problem where all the different actors in the system from finance business government are not only governed problematically but especially relate to each other in problematic ways and in that chapter in the book where i go through these myths i look at value markets concepts of efficiency problematic concepts of efficiency uh you know capabilities where do we really think they reside and directionality of the economy um and i look at them as myths in terms of the underlying problematic ways that we think about these so if we think of value as just being created in business and then being facilitated and enabled by say government that already sets up the kind of confidence of these actors in a very different way and actually value is co-created it's created by workers it's created by trade unions which by the way got us something really great which is the weekend in the eight hour workday markets are outcomes of how all these different organizations in the public private and civil society sector are governed and interrelate markets you know the idea i already mentioned this the purpose of governments is simply to fix markets that's a complete myth what actually um you know we've required to even get us things like the internet which was government finance was um by doing that i now no longer see what what have i done anyway just wanna um we no longer uh um sorry just by having you know this idea that markets are there to be fixed and we wouldn't have had the internet which was government finance which created markets or the bbc really important you know public institution which in the uk has been an active market co-creator so seeing markets as outcomes efficiency this idea that governments at best should be um you know run as uh uh the private sector become more efficient and precisely in that way perhaps be outsourced this next point in order to run it more efficiently these are all based on problematic underlying assumptions of how we understand the role of these actors and if you're not seen as an active creator of value why bother investing in your own knowledge creation your absorptive capacity your ability to co-create as opposed to just fix so you end up not actually having the capabilities to do things so it becomes almost like a self-fulfilling prophecy that then you need to be privatized um and you know the last point there in directionality the fact that the economy has not just a rate but a direction growth has not just a rate but a direction even financialization is a direction of the kind of growth we've had the fact we don't talk about that and have words like the role of policies to level the playing field as opposed to tilt it towards directions of greater inclusion and sustainability means that we end up having all these kind of you know problematic and kind of bogus ways that we think of the role of government again is leveling and it shouldn't pick winners it should just kind of sit in the background and you know facilitate and then step away to allow business to to direct the show and you know what I often have talked about is yes we shouldn't pick winners in terms of particular types of technologies and you know sectors and types of firms but surely we need to pick a direction at least right you pick a direction towards where we want to go and then you pick the willing who's actually willing to move with you in that direction but you still need to make that choice that's the directional choice and this is why I wrote the book you know we simply would not have 51 years ago almost 51 years ago gone to the moon and back which was extremely hard had we bought into all those assumptions and actually the problems we're facing today the social problems around inequality around weak health systems around climate change or even harder than going to the moon a colleague of mine at Columbia University Dick Nelson wrote a book back in 1977 called the moon and the ghetto precisely on that problem you know how come we still have ghettos and yet we went to the moon well what is it that we've done wrong on earth that we somehow got right when it was all kind of you know really clear of how to beat the Russians so what I want to do in the next part is to kind of remember what actually happened when we went to the moon it's not a cut and paste job I will repeat as I do in the book constantly that the social problems that we have today are more difficult than going to the moon but actually what was really interesting was what it required you know in terms of public sector leadership not micromanaging this is not about you know the Soviet Union or as one review which you know I'm going to be frank I don't think the reviewer read it talked about as oh this is about you know the great leap forward it's not about that it's about how do you have government leading and really crowding in as much bottom up interaction around you know different sectors but also public private and really interacting in an ambitious way but with that government setting the direction of what we're trying to do what it means for risk taking and innovation agility and flexibility of the organizations involved the ability to kind of aim big but to allow lots of spillovers to happen along the way like everything that came out of this you know that makes our iphone smart today and not stupid frankly came from these kinds of investments that i'll be speaking about how to think about budgets focus on outcomes instead of thinking oh where's the money going to come from well what are you even trying to do and then back up and ask yourself what kind of budget you need and the really dynamic partnerships that are required to make that happen you know and so what's really interesting just kind of backing up a bit here when kennedy made the speech in 1962 in rice stadium they had no clue how to get to the moon i mean it was really an act of confidence and in fact he he said it he said you know this can be hard and we're going to do it not because it's easy because but because it's hard you know imagine if people said that today or leaders today said we're going to fight climate change not because it's easy but it's hard we're going to also waste a lot of money along the way we're going to make mistakes but it's okay because the you know the ambition is great and so they had even all these different ideas of how to get there they finally decided on that lunar orbit rendezvous way but you know it took huge amounts of risk taking and experimentation and willingness to make mistakes today if you're a civil servant you make a mistake bang you're in the front page of the daily mail right so what does it mean to really welcome that risk taking and experimentation within public institutions that are ambitious they also realize very soon that they had to change their structure it was way too kind of vertical this is a figure here from George Mueller who had come from Bell Labs to help you know with the Apollo program and realize that we they needed much more horizontal communication that kind of flexibility and agility and what was quite striking was in 1967 when the Apollo one fire occurred where the three astronauts died Gus Grissom you know literally minutes before or probably an hour before dying it just kind of yelled Jesus Christ how the hell are we going to get to the moon if we can't even talk between our own units right within NASA right we're trying to get up there and our earthly structures within our public institutions are so kind of siloed and badly communicating which is such an important point for you know many civil servants who as as good as they are and as much as they'd love to be creating change will often complain about the siloed structure of government but the other thing was because actually it fostered so much innovation across many different sectors it wasn't just aeronautics it was also innovation in materials and electronics and nutrition the whole software industry in some ways came out of that it really created lots of earthly if you want to innovations that were spillovers from that from camera phones to home insulation to baby formula and so on and one of the things I found the most interesting and I actually focus on this quite a bit in the book is what it meant for the way that business and government actually interactive because this word partnership or ecosystems if you're a kind of a policy wonk are often used but we never ask ourselves what kind of partnership do we actually have you know is it a symbiotic mutualistic partnership or do we have kind of predator prey parasitic partnerships for example in the health sector you know the pfi schemes this is way pre covid they were problematic there was a partnership why did it go wrong so what's interesting when I looked into this is you know nasa was very confident they were like of course we have to partner with business there's going to be lots of innovation inside business as we need inside the public sector but we need capabilities to do that and we need to make sure that the contracts literally the procurement contracts so government to purchase in you know things that it needs in order to go to the moon the contracts themselves need to be goal oriented but also not just inflating the costs for the government and so they moved away from the cost plus contracts to fixed price contracts with incentives towards innovation and they included in the contracts no excess profits which was so interesting because in this amazing mission that was you know co-created invested in by lots of different actors the idea is you don't just socialize the risks you socialize the rewards you know something we're completely getting wrong and I'll come back to this later today in the digital world in the health sector and so on but and nasa paid attention to that it's part of that Apollo story that no one's really kind of gone into and and also they realized that in order to interact with business which they have to of course you need both actors as part of that solution they themselves needed to be dynamic and there's this wonderful quote from Ernest Brackett at the time the head of procurement from nasa saying we need to be aware to not just be conned into brochuremanship you know today that would be the PowerPoints of consulting companies like Deloitte and PwC and so on but basically the idea was we need to know what the hell we're doing what we want to do and even if the private sector is going to do part of it with us we need to understand that landscape and we're not going to do that unless we ourselves are smart we can't just outsource our brain we need to be investing inside public administration the point I made about Vietnam and Kerala just getting this to be a bit less euro and US centric for a minute and you know it cost a lot of money but you know he was also clear it would cost a lot of money and yet less than we pay for cigarettes and cigars every year he took note to to say but even without that comparison the point really is not so much that it costs a lot of money but how it was structured it landed it wasn't extracted it wasn't just money flown in through helicopters helicopter money money trees it was money that was landing on particular structures and relationships and this is a big lesson because in the financial crisis there was a lot of stimulus that went back into the economy most of that as I mentioned in the beginning ended up back in the financial sector didn't land on new structures that actually strengthened the economy so the Apollo you know program cost a lot of money but it went into different types of activities services and goods that were required and relationships and collaborations and if we ask what does that mean to to really focus on that for the social again problems that we have again not only come back to it but just to say now that's incredibly important a country like Italy where I'm from our debt to GDP is very high but the deficit is not high the deficit in fact has been lower than Germany's for many years and yet if you're not investing through public and private investment over in the long run and actually innovative structures you don't have enough kind of ambitious mission oriented investments you can have a mild deficit but a high debt to GDP because that denominator is not growing it's it's amazing how even now right with the budget in the UK there's all this talk of how are we going to pay you know this debt back when actually as long as the focus is on the long run and investing in critical structures social infrastructure physical infrastructure but especially the kind of innovations of the future that can solve our societal challenges like the digital divide I mentioned in the beginning in theory that's going to create growth which is the denominator of the debt to GDP we also want that growth to be sustainable and not be damaging our planet and that's that issue around directionality which I'll come to and now so you know learning from the moon landing which is what the book's about but applying it to the earth shots we have today not the moon shots the earth shots that requires both learning those lessons I just went through but actually changing them quite a bit because the 17 sustainable development goals that you see on the screen here which were agreed on and signed up to by almost every country in the world that really requires you know thinking about these lessons in a way that are even more deep coming back to that the moon in the ghetto book that my colleague wrote these require behavioral change regulatory change social change but also lots of public and private investment and collaborating in specific ways and one of the reasons I wrote the book is that for the last years I've been working with governments worldwide on the idea underlying the book and then I wrote the book to make it more common or more how do you say understandable for normal people like my family and not just the academics and business leaders that I was talking to and policymakers you know it's something that everyone should be able to get inspired by what I've been working on is how do we transform these 17 SDGs again let me just show them to you again they've all been agreed to since 2015 17 goals every country's agreed to them 169 targets below them whether it's no poverty zero hunger you know clean water and sanitation life below water etc what does it mean to actually have a plan to confront them you know to turn them into these earth shots inspired also by something we did 51 years ago and that requires beginning with the challenges which are the SDGs turning them into missions which are concrete targets that we can actually answer yes or no did we achieve them but structuring it in such a way as I mentioned with the Apollo program that really galvanize as much intersectoral investment in innovation as I mentioned the Apollo program was not just aeronautics it also required lots of investment in nutrition materials electronic software and the design coming back to that procurement point I made about NASA design procurement and grants and loans and recovery funds under COVID to foster as much bottom-up innovation to actually fuel experimentation towards the goal the mission so less focus on sectors more focus on the problem and how to design industrial strategy procurement and so on to to to reward the experimentation that we need to get there so whether we're talking about SDG 13 or SDG 14 clean oceans climate change and so on we can transform these into concrete goals you know plastic free ocean or 100 carbon neutral european cities by 2030 these are two examples I worked out in that report on the back of that report missions actually became a legal instrument in europe today they're part of the horizon program which is a close to 80 billion now euro innovation program but if you just look at for example the you know carbon neutral city this is about you know really thinking not about carbon neutrality just in terms of renewable energy but also in terms of changes to real estate construction materials food mobility systems and so on and very specific projects whether they're sorry the projects are not specific you need to then foster experimentation by multiple actors to come up with these projects of which many will fail as Kennedy himself admitted whether they be carbon neutral urban food industry projects carbon citizen sorry citizen carbon id buildings with carbon neutral components or different types of insurance policies for example that would bring us towards a more carbon neutral low emission structures in our economies and the criteria really for missions to really be kind of moonshots but on earth they have to be bold and inspirational you know a clear direction ambitious well realistic it can't be completely pie in the sky and really foster that cross-sectoral interdisciplinary interaction and be designed in such a way that can drive you know multiple bottom-up solutions which I keep emphasizing in a second report I also looked at all the you know changes we need and how we finance how we structure our public banks or public funds the UK government is about to come up with a national infrastructure bank what is that going to look like if it actually cares about things like you know climate change in Scotland I worked closely actually with Nicholas Sturgeon on a new public bank called the Scottish National Investment Bank and very much warned not to do what some public banks do which is just hand out money to whichever company you know yells the loudest what does it mean to have a mission oriented public financial institution but also the flexibility and adaptability that I talked about in the beginning the accountability but also you know who decides who decides what the missions are is it really just a minister because it's going to look good in terms of their legacy or how can we bring citizens to the table to really engage you know policy makers in terms of what even matters you know who decides what is societally relevant and inspirational and it's interesting coming back to that plastic free ocean one so many people know about the plastic free ambition and mission because not of a minister an academic or a business leader but because of David Attenborough's Blue Planet documentary where that last episode was on you know all the plastic that's flooding our seas and the baby dolphins choking on it etc it took a creative output right so what does it mean to bring the creative sector to the table the humanities and so on to help us to reframe how do we want to live together as I mentioned on the back of this work the EU forget Brexit for a minute this pretend we're all there happily together in Europe came up with these five mission areas which currently they have also mission boards thinking about multiple missions underneath each one and just move on quicker in the UK government I work closely with Greg Clark who is the minister of business environment and industrial strategy to help the industrial strategy be less about a list of sectors at the time under Vince Cable before that it was the sectors were aeronautics sorry aeronautics automobiles financial services creative sector and life sciences and I said to do what so help them make this more challenge oriented industrial strategy around four big areas like clean growth future mobility and we set up myself and David Willits we co-chaired a commission mission oriented industrial strategy looking at for example a future of mobility what would it mean if we had really clear missions around mobility that was universally accessible you know so that anyone could access whether it's the tube or any other part of our infrastructure but also sustainable and that would of course require some of those bottom-up projects to also come from the world of disabilities currently one of the interesting things I'm doing is working in Camden which is where I live you can't see because it's dark but I am in Camden a council in London around nesting these missions within instance you know areas like youth centers social housing so having a carbon neutral mission which is about making our housing estates a sustainable or school meals sustainable imagine in Manchester we have Marcus Rashford reminding the government we need school meals during lockdowns well what if those school meals weren't just provided which of course they should be we owe our gratitude to him to remind the government of their role but also a locus of innovation you know the production the distribution the consumption of school meals to be a sustainable healthy and tasty of course as possible and bringing students to the table to help design those but also to monitor the outcome if they're not tasty then they're not going to eat them right I also work you know closely with the Italian government the previous one before the recent resignation precisely because currently not many people realize this but the European recovery scheme which is called the next gen EU recovery for COVID it's close to a trillion it's not as much as it should be the US government which is almost as large well the US and Europe are equal if you want in terms of size of their GDPs almost and the US is spending 1.9 trillion on their recovery Europe is spending one trillion of course we need to also look at national responses but it's conditional on governments coming up with a strategy around both climate change and digital digitalization so I work closely with Italian government on this concept of mission saying you can't just talk about digital or climate change you need some you know really concrete missions around that so we worked around this digital divide one but again you know all these things really are more creative and more interesting and more inspirational when they land on actors that together can negotiate and co-create and co-design these missions that's why cities by the way are so interesting because they're more local it's kind of easier actually to think about what it means to bring something like the future of mobility to the fore of how citizens whether they're you know where they're living but also at the street level and how the city plans mobility from point A to point B how they can be the funnel for lots of innovation I'm almost done here so I just want to say you know the pushback I get and I get a lot when I talk about this stuff is the usual so let me just finish with some of the you know what you know why we need to resist the usual pushback however I should at least engage with it but you know this is not about money more money more money this is about a very different way of thinking about government's role even with the existing money it has it is true there's been lots of cuts to things like public services and you know if you think of public health systems and I do think we need more money there but it's not just about that it is about actually structuring you know public subsidies guarantees procurement grants and loans really in a different way to really catalyze that additionality that investment across the economy towards goals that actually matter so it's not about money trees it's about smarter trees it's not about picking winners as you know it is about picking directions being very clear on what those directions are and I do think we're committed to these sdgs let's go for them we've signed up to them take our names off if we're not serious and how do we tilt the playing field you know reward those kind of companies that really are making those long run investments that are reducing their carbon emissions so this is the concord plane which is often used as the example of where government screws up well I'm not talking about the concord plane I'm talking about you know really using government policy to help direct and steer an economy and catalyze as much bottom-up innovation by multiple actors not just one big isolated infrastructure project like HS2 or or concord um it's not about ideology this is not about communism I mean you know forget whether one likes communism or not that's not the point this is about doing capitalism better it's about taking seriously this idea that we can do capitalism in different ways and there's all this talk about stakeholder capitalism but we're simply not doing it it's just this fluffy thing that makes some companies feel better but we need to bring that notion of stakeholder value and purpose at the center of the system at the center of how public private and other actors interact it's about solving problems together coming back to the SDGs which present to us 169 different problems if you look at the targets below them and it's also about making sure we govern the system in the public interest even the vaccine it sounds good you know we have vaccines we have public and private investment but if we don't govern the rollout and in in the way that it needs to be governed if we don't govern the intellectual property rights to really fuel what the world health organization calls collective intelligence and allow patents to constantly just create these rent seeking kind of areas then we failed right so it's not just about putting the money in but governing a system in order actually to meet people's needs and I do I've been writing about this for a long time how we've gotten this wrong in health where there's huge amounts of public money on say medicines and yet the prices of the medicines don't reflect that you have taxpayers paying once twice three times just to get back what they've actually helped co-finance and also this is one of my last slides in France what was interesting was the the minister of finance who you see here he was very clear he said he said we're not here just to bail out companies we want to help transform them and so the conditions that were attached to the COVID-19 recovery schemes for airlines and automobiles were conditional on those sectors reducing their carbon emissions or in Denmark and Austria similarly they said you can't use tax havens and the Scottish parliament has voted to block companies based on tax havens from using millions of pounds in corona virus relief funding so you can't just you know use tax havens you can't just use it for share buybacks and so on this is about conditionality and I don't like the word conditionality because it reminds us of the Washington consensus kind of language but it really is about building a better social contract between all the different value creating actors and when you have a huge recovery scheme just kind of going into the system without nesting it within this different public purpose symbiosis mutualistic way of doing things that again NASA worried about then it's a failed opportunity and this also you know it's not just about health as I've been talking about obviously corona virus but you know as I mentioned everything in our iPhones or smartphones whatever phone we have that makes it smart and not stupid was actually publicly financed you know internet gps touchscreen series my two books ago I wrote about that in the entrepreneurial state but if we then don't govern that technology to benefit citizens you know just because you can search google that's not enough if google is also searching you without you knowing you got a problem so how do we govern the data commons and the city of Barcelona recently the the mayor Ada Colau brought in all these hackers into the city government which is quite interesting in order to govern how data actually benefits the city data is created every time you click on city map or anything when that data is created we often just assume of course it goes to the private sector so this was a hacking unit within the government that said no no the data is coming back to us and we're going to use it to improve public transport social housing and so on and you know the point that I made about the moon in the ghetto is extremely important we shouldn't forget this this is not about some again micromanage top-down process it has to be about you know different voices at the table and the fact we have all these movements in the last year or two you know with a me too movement Black Lives Matter and Pride is for the future you know what does it mean to really listen to these voices that are saying you know we need to get our acts together this this this song poem by Jill Scott Herron Whitey's on the moon you know he was saying we're going to the moon this was back in the 60s and we can't even get food on the table for so many people on earth and while that's a very good question that you know if you look back at that spillover slide I had a lot of the earthly goods we have have actually come from going to the moon the goods that have helped us actually confront disease and also poverty worldwide but that doesn't happen just by chance it happens if we care and unfortunately we don't care enough we're not working enough to make sure that science is actually really benefiting the people that need it again that example of the vaccine it's not enough to have it if then you have vaccine apartheid where you know 80 percent of you know countries actually haven't yet gotten access as much as the 20 percent rich countries so what does it mean to think about distribution kind of ex ante you know not just redistribution pre-distribution get the relationships right battle the structural inequalities the structural racism from the beginning so you don't have to pick up the mess afterwards and that's a very important part I think of a mission setting um at the end of the book this is my last slide I talk about why all these issues I've talked about really should lead to a new political economy right I began with Adam Smith's political economy new approach to value as collectively created markets as shaped organizations in the public sector and private sector requiring dynamic capabilities you can't just outsource your way to any problem finance you know what is an outcomes-based notion of finance look like pre-distribution so we actually share risks and rewards and don't just have to do that later via taxation but we need progressive taxation purpose at the center of partnerships not just a corporate governance motto and real true participation you know bringing in those that kind of citizen led design in places like that example I gave of Camden and I completely knew the vocabulary again of what policy is for it's not about fixing but co-creating it's not about de-risking welcoming welcoming uncertainty not about picking winners picking the willing all these different words here are really why I set up an institute at University College London called the Institute for Innovation and Public Purpose where the idea is we need a new training we need a new curriculum for global bureaucrats we can't just get better policy we need a new mindset and lots of these new words of welcoming uncertainty being willing to make mistakes no one's going to learn without learning by doing but that requires both a new narrative a new story and a new framing um and I'm done thank you my clock died halfway through so I have no idea if I'm what time I've made here but I will stop now we've had plenty of questions so thank you very much um everybody I think um one or two um have have focused on the question of the environment and I'm wondering if we could perhaps start with them um our population one of the anonymous attendees of which we've got quite a few our population size is too large and we don't have enough sustainable resources to support it and destroying the planet as a result um how can societies prosper with this elephant in the room you know that's a big question and it's a very important one because you'll notice that I mentioned growth a lot during the talk even when I say you know it's not just a rate of growth but there's a direction of growth what I'm getting at and perhaps I should say much more explicitly is we have had a direction of growth which is killing our planet it's you know hurting animals which is is very much part of the COVID pandemic you know if you look at the kind of viruses that are coming our way because we're you know hurting the kind of biodiversity but also we're getting exposed to certain animals that we I mean this is some a recent article that I looked at in terms of what we're doing to the Amazon is actually putting us in touch with certain types of creatures that we are just simply not ready to confront and we we have not prepared our our bodies for that and that is because we are decimating you know the rainforest we are becoming closer to certain types of animals which harbor these viruses and that's very much what also happened in the Wuhan market with bats so how we're treating animals how we're treating the biodiversity in terms of the plants how we're treating the planet and generally in terms of all the climate change problems I talked about in the beginning you know this is a particular type of growth there's nothing inevitable in that even even deregulation is a particular type of growth it's an act of you know it's an outcome of a particular type of decisions that we've made in the economy so I think you know the whole question about about the planet is really reminding us that there's decisions we have to make so this is not about oh just throw a lot of public money you know making things happen goods and services in the economy this is particular types of goods and services in the economy and so a mission-oriented approach would think very carefully for example about how handouts are provided to some of the sectors that today really need funding not just because of the COVID pandemic but because they're kind of dying sectors so if you look at the steel sector which globally is asking for handouts it's very interesting to see those differences in how governments are confronting that and if you have a lack of a mission which I would agree or I would argue the UK government for example has not really been directed towards a particular type of economy then the way it interacts with steel will be simply through a deal you know some sort of you know agreement that is about helping the steel sector whereas in Germany where they had a very clear energy-vendant mission the way that the public bank the KFW interacted with steel was to put a conditionality that steel had to reduce its carbon emissions had to reduce its material content which they in fact did through repurposed reuse recycle which was you know then they became one of the greenest you know steel sectors in the world and that's not because they talked about purpose but they had to in order to get government money so in terms of the planet and our planetary boundaries we need to reflect on what that means for the everyday normal stuff in terms of how any penny of subsidy guarantee grant loan or bailout during the COVID recovery gets administered and I really believe that we can redirect our economy to be more sustainable there's some who think no this is just about limiting growth we only have a certain amount of resources I think that's not true and I think that's where there's a big debate on that we can change the types of resources we have we can put these resources together we can collaborate in different ways that can make us more sustainable it's not about saying only certain number of people can live on this planet but there's a similar sort of follow-up one which was thank you for the lecture with respect to climate change we have a clear purpose we know who we want to get to but we seem incapable of identifying a common path is this due to humanity being simply unable to prioritize public good over private profit on the scale required I mean I suppose I wonder if I could put another question which sort of leads on from that which would be mine which is this one of a similar one to do with it which is always puzzled me I worked in tax for many many years and the one that puzzles me is that at the moment in the UK we have the strange situation that energy consumption gets a tax privilege because VAT on energy is only 5% so in other words there's a tax incentive in the UK on consumption of energy and again another sort of energy one is that when I think it was six or seven years ago there were the fuel protests about an inflation only increase in fuel duty ever since then no chancellor has ever dared touch touch this this issue again and yes people still talk about the price of fuel because they see it everywhere they drive but actually in real terms at the moment fuel is a lot cheaper than it has been for for many for quite a week while so I don't know whether there's and and we want it but not now so we seem incapable of identifying a path to it and prioritizing common good over profit I agree and you know I think the problem is and you know this is why I came back to this language issue in my previous book actually opened it up with Plato's you know given that you're a philosophical society Plato's saying that storytellers rule the world so the stories we tell determine what we actually do so if we have a story of government is leveling the playing field we won't get the kind of tax policies that you're talking about Richard we currently have tax policies that a reward short-term investments over long-term investments if you look at how capital gains tax is structured or the lack of financial transaction tax it really benefits you if you're you know just kind of making money moving around existing assets rather than investing in the kind of you know new structures that we need and second in terms of the directionality of those structures you know greener ones as you say we actually tax labor more than we tax materials right so if you actually want to reduce the material content as the steel example that I mentioned you would need to you know tax material more than other things and we're not doing that that's an outcome of a decision we've made a society there's nothing inevitable in that and that's why I kind of always push back on the degrowth agenda which almost makes it sound like it's this deterministic boundary that we can't you know go over definitely there's boundaries we can't go over planetary boundaries and I really you know think Kate Rayworth's work is fantastic around that as is Tim Jackson's but where I sometimes differ is it's not because we're growing it's just very problematic decisions we made of how to structure our tax system of how to give out again grants loans and procurement without any sort of conditionality towards these sustainability targets and the ultra-financialized form of our corporate governance system which continues to be just you know directed at that bottom line of increasing share prices that could eat you know that could be changed just one quick example Bell Labs which was one of the most innovative private sector innovation laboratories came about in an era in the United States where the government was confident enough to make it a condition for for AT&T which had the monopoly on telecoms that to retain their monopoly they had to reinvest their profits into the real economy into innovation and big innovation beyond telecoms Bell Labs was the answer to that provocation so imagine today with all this value extracted out you know four trillion and share buybacks and all this short termism if there was more conditionality terms of long termism and long termism towards more you know inclusive forms of growth more sustainable forms of growth we can do that we just have decided not to yes I mean I suppose the follow up on that I just wonder whether the model you're comparing is a public company with at the moment and I just wonder whether there's anything in large privately owned companies so if you think of the likes of Dyson and the vacuum cleaners JCB with their backhoe tractors maybe even things like associated British foods with many years of control by the western family these companies you know certainly seem to have gone for the long term so I don't know whether it's is there a third you mentioned you know the corporate one and the government one is there a third one in the middle or a third one yes I mean there definitely is so in fact in some previous writings I've written a lot about this idea that there's varieties of capitalism as have there's all literature on this varieties of capitalism there's not one way to do corporate governance that's why this idea of stakeholder governance is important you know John Lewis is a cooperative that's a particular way to structure a company we have a project which I didn't I didn't have as one of my examples but it's a project in my institute where we have been working with the region of Biscay in the Basque region of Spain because they have this very large cooperative which is called Mondragon it's a industrial cooperative not just a retail one most cooperatives now are retail like John Lewis they have 87 000 workers they produce you know from washing machines dishwashers machine tools etc and the history they have of this deep cooperative John Lewis kind of you know corporate governance is today informing the way they think about their own green transition so not just at the corporate governance level but how different members different stakeholders outside also of the company negotiate their way through a green transition and there's ways to do that but it has to be learning from also how we have had different business models it's not just again a pie in the sky there's experiences that we can learn from in Germany again or in Scandinavian countries they put trade unions on the board of companies it's still capitalism it's just a different way of doing it and so I think there's there's something about really looking at the heterogeneity of ways to govern our business sector but also our public sector and kind of learning what works and what doesn't and definitely what doesn't is this kind of short-term speculative you know just worrying about share prices that hurts workers it hurts planet it even hurts the companies you know no one wins in the long run those same companies don't benefit in the short run they do and as long as capital is benefiting from moving it around you know quick short-term trades and if we don't de-reward that you know penalize that by rewarding the kind of behaviors that we want and that's why we need this concept of tilting the playing field you need to design a tax system that tilts us in the direction of the kind of growth we want there's a couple of questions and comments about the hollowing out of the expertise in the public sector and how this might be dealt with and one is from Mr Anonymous again I know from painful experience that the Royal Navy support organization has attempted many aspects of what you've described starting 12 years ago it's overfailed in many levels how do you bring something like that back from the brink without legions of management consultants as everything has been outsourced aimed at shared value profit and innovation it didn't work and the other one on a similar vein should government have a closer alliance with academia academia and experts such as yourselves in terms of outsourcing for advice rather than profit driven and neverly self-serving consultancy giants um is academia set up for that or would it begin to itself become self-serving if used in that way that's such a good question wow I'm gonna I'm gonna have how do you say hang a bit of dirty laundry out on that one so first of all that you know that point of lord agnew that we've infantilized government by outsourcing its brain is is just so important um but it is a self-fulfilling prophecy it can't just be solved by saying stop outsourcing don't use consulting companies the reason they're used is this idea that government at best you know at worst let's get the hell out of the way at best is fix the market failure and then you know get out of the way um you know because otherwise you're crowding out the business um so as soon as you start saying actually the role of the public sector through all its different organizations whether it's an r&d organization the bbc or a health organization is about co-creating you know the economy co-creating value co-shaping markets then you need particular types of capabilities to do that so again the remit defines the kind of you know knowledge and capabilities you need so where you know you have a master's in business administration MBAs that brag about things like strategic management decision sciences organizational behavior all these great things that businesses need to think about in order to create value if you look at the mpa master's in public administration about business administration curriculums they are so boring that's why i set up my institute we have a whole new curriculum actually for civil servants um it has four different modules one is on value one is on challenge oriented policy one is on creative bureaucracies you know why is it that when we use the word bureaucracy we think it's a bad thing you know it's so bureaucratic well bureaucratic it's just a fact things have to be bureaucratic is it a creative bureaucracy or an inertial boring terrible bureaucracy unfortunately we often have the latter and the last module is on a digital you know governing digital platforms in a proactive way so that's a very different curriculum from the one that globally whether it's at Harvard or Oxford is being fed out which is all based on kind of Chicago kind of economics landed into the public sector uh through new public management and public choice theory so we need a new curriculum and on the issue of on the issue of academia it's really interesting i mean i had an experience in scotland i hope my uh Scottish colleagues don't matter i don't mind that i say this but we worked for two years as an academic institution uh to set up a new Scottish national investment bank mission oriented and basically charged the government almost nothing literally just the cost of the research fellows that were helping me i think i did it for free but the research fellows were you know had to be paid in terms of hiring them to do this at cost right so we are public institution trying to bring our great kind of you know thinking to the floor to you know impact policy we did that and then unfortunately the project management of this bank that we did almost for free was given to pwc i won't tell you exactly how much they were paid but they project managed it and i remember saying what the hell you know if you wanted to give money you could have committed to us but we didn't want to charge you that but the idea that government is so insecure and so risk averse that it thinks it needs to outsource the project management to the consulting companies because they don't have the capability went completely against everything we were trying to build and i mean i don't want to make a judgment now in the bank itself which i think is really well structured and there's great things happening there but the point is this is all too often happening globally not just scotland globally which is oh it's just project management give it to the but actually managing a project that's learning by doing learning by doing means you actually learn and you learn inside and if you stop doing and someone else is learning you become stupider and stupider so then the outsourcing becomes an inevitable conclusion of how you frame the problem and how you've then governed it so it's not just ideological you know someone could say it's a neoliberal thing it becomes inevitable in how you've actually structured the governance you think there's also sort of perhaps a thing underlying it i mean it used to be in business that there was the saying you never got got shot for buying IBM and this is going back a few years and i must say but when when IBM ruled the world big blue that in the same sort of way if you have something like the bank and in fact one of the question is can you expand on how a scottish national investment bank could have its mission set by the citizens would you envisage this being through the scottish parliament or other external bodies or boards but which is the question but is there a is there something which i'm not quite sure if it exists so much in business now about you never get fired for buying IBM in the sense in the same way there's a as you say a fear in the public sector that if we've outsourced it to a big name obviously it's no longer IBM you replace that with something else we won't get fired and how do you get rid of that mentality yeah i mean i think there's two points there the first is on citizen engagement and the other one is kind of on the risks that we're willing to take as opposed to de-risking and hiring someone else to do that so the first is i do think we need to be careful like pretending that you know just using the word citizen engagement you know that could just lead to chaos right so there's something about a very delicate balance between a top down direction which it has to be broad right you know top down really micromanage fails that that doesn't work that doesn't stimulate innovation but a top down decision we are going to have a green transition we are going to have sustainability targets of x y and z the how will be managed at the local level you can't just tell a city you're going to be carbon neutral it's a good thing to do it needs to be negotiated what does it mean in particular areas i mentioned the example of the housing estates in camden where we actually need things like citizen assemblies which in some ways you know i mean one of the good things i'm against brexit but one of the good things about brexit was how it kind of you know i think stimulated a lot of citizen assemblies to debate it we often don't have enough debate in our localities so what would it mean to bring housing associations and citizen assemblies to the table on how a carbon neutral agenda which does land top down but the how how we're going to do it what it means for the design of the homes of the ways we live together of a public square gets negotiated and is co-designed by cities there's really interesting examples of that in sweden today we actually work quite closely with the swedish government around um some of the missions that they're setting both at the street level in terms of a sustainable uh a street in terms of everything that happens not just on the high street but literally the 4 000 kilometers of streets they have in sweden but also the school meal example i gave before very much was inspired by something that's happening in sweden that can't be again just fed down when i mentioned that students can come and be part of a school meal agenda to make them you know healthy tasty sustainable but also help in the monitoring but also bring it to the curriculum that's where that engagement is on the risk i mean as soon as you admit that government is also about creating value learning taking risks you need to be able to learn from the inevitable failure so the first is to admit you're taking risks the second is that it's going to often mess up and instead of just plastering your face on the daily mail because you messed up it's part of that process but if in on the way you haven't learned from messing up in the failure you've really failed like the failure is not from failing which is inevitable the failure is if you haven't invested within your organization to learn by doing right and so that's that self-fulfilling prophecy i mentioned that if you're not seen as an active member of society and just at best a facilitator there isn't that incentive to invest and you fear that failure so it's easier to outsource it to someone else so if things go wrong oh it's their fault but then you've just completely missed out on the learning along the way and that inevitable you know and that's the self-fulfilling you then kind of becomes stupid because you're not learning and then actually the outsourcing happens because you're incapable not just because there's an ideology against it yes and i suppose is the other thing as you say the news media will always try and find a way to throw mud at somebody and the poor civil servant you feel sometimes for them because if something is tremendously successful like the as you say the vaccine program then the ministers will be first to take credit for that and i think there was i can't remember now there was quite an extreme example of that that he backtracked about about that but if if it if it doesn't work out then the minister says well that was nothing to do with me that was the the civil servants that caused the problem and so again there's a bit of human nature i think sculling around the background and that little ogre would have to be somehow i think addressed and as you say as you precisely as you say and in in doing risky things you have to accept the possibility of failure but i'm not quite sure how you do with it anyway another question which is this time from Colin Brown when scott government tried to reform the private pfi or ppi contracts they were unable to control profit taking by the profits private sector in the long term commercial confidality hides this how can the government enforce access to the full accounts of private organizations it contracts with on a sustainable cost plus basis which i don't know is it another little problematic area yeah i mean that's why i focus on that example of how you know we got to the moon by actually caring about that question that question was in the minds of the nasa you know people who were working with the private sector and yet we don't have that and so many you know the pfi schemes have just gone so wrong or even you know i sometimes like where i think corbin got it wrong in terms of a kind of a progressive ideology which we should have had in the labor parties it's it's not about ownership it's not just about nationalizing you know stuff nationalizing transport nationalizing whatever it may be it's about getting the right deal you know so if you are going to let the private sector to come into the you know what was before publicly funded and governed transport system thinking of trains and virgin atlantic you better make sure there's a very clear criteria of you know what's going to be required you know sustainable modern fast accessible transport system in terms of the prices and if you don't embed that into the contract it's not going to happen right and so i think it's just you know unfortunately in scotland for example one of the reasons we argued that a public bank was needed was precisely by looking at how much could have been saved by the government had it actually just funded and governed some of the systems directly instead of indirectly in this intermediated way from a very cost inflated privately dominated system but the second point is well if you do bring in the private sector which of course should come in in many different areas what is the relationship what's the governance structure what's that contract so i think you need both you need in some cases you just need that public financial institutions like a public bank but if you don't have that you can still have you know a government led deal which is again symbiotic when you do open up an area to the private sector has to be very clear what the target is you know going to the moon and back was the target back then it wasn't just come in and do what you want we need to commercialize space no if you just say commercialized space you get what we have today which is all these astronauts complaining they cannot see a thing they're like we can't see anything anymore because there's all this garbage astronomers astronomers are saying there's all this debris right all this debris yes sorry astronomers in space because you know the elon musks who've invested on the back of a public infrastructure there's no deal there's no criteria there's no regulation so there's lots of garbage up there you know in terms of all the different satellites and it's too much it's not regulated in a way that you can plan for the kind of space economy that we want and i think the the other aspect of obviously going on from the question that mr brown asked there the sadly the the whole thing of getting the accountants again getting stuff off balance sheet now the question of off balance sheet financing in companies that rogue was dealt with many years ago and if a company engages in off balance sheet and accounting certainly in the uk maybe not in the united states of america which we saw in the enron collapse but anyway in the uk accounting standards would force companies to recognize quasi loans and quasi debt but the public sector has been resolute in its refusal to adopt the the full gamut of accounting for off balance sheet and i think this has ended up with the public sector getting some very bad deals because they can get quasi borrowing expensively from the private sector and whereas they could get public debt very cheaply but that would appear as debt in their balance sheet but the quasi debt with the private sector because i say they've resisted adopting the full rigor of accounting standards so again that's that's a topic for another day i think yeah richard do you work on this no i worked in tax but okay i worked with colleagues that worked with it and always intrigued me perhaps because of my it's so interesting strange interest in tax that um it always puzzled me the economics which just does not make sense one little bit to me the of the public sector borrowing so expensively when the public sector has got the access access to the cheapest debt so why would you go and of course the answer is um the body swerve the the full rigors of accounting standards so i mean that's but that's rather arcane and but actually arcane though it may be it's what is the root in my mind of the problems that we've ended up it's such a good point so i'm going to say this in front of all the what is it 100 and something people listening let's write something up together because that point that you've just made is crucial it's actually a global point you have so many government budgets which everyone worries about being inflated due to that so it's not only like oh don't worry about the budget actually what you need to care about is the mission and then you know let the financing come out later and if you don't think like that ironically your budget actually goes up because you're doing everything kind of wrong but also in terms of actually thinking how you're financing really important kind of you know public enterprises or projects or again missions does matter and we've just gotten so terribly wrong and it ends up making it look like the government is investing more than it actually is because of how it's being financed and then you get these cuts and austerity on the back of that and it's just like there's a loop um i think we've got time for two more i've got one here from julie thank you for such a stimulating talk i really like the analogy to the mission to the moon my question is is there a country in the world today that you might use as a role model or moving towards being a role model that could be held up as an example of your strategic approach what would be the five asking for five there we are the five not three but five lessons you think we can learn from the uk handling of the covid pandemic and Brexit so can you do with that in two minutes yeah i mean i've already mentioned some interesting examples definitely sweden right now which has this mission which is about a fossil free welfare state i find interesting because it means that everything the government does from housing to transport to public education and public health has that mission of carbon neutrality and fossil freeness at the center of it and because all of that is delivered also with partnership with business it just becomes very concrete and it lands on specific places like streets and school meals um the lessons i don't know if it's going to be five i'll just kind of you know list them first of all if you've just over the last 10 years demolished your public health system you're going to have a problem when you then have a health crisis uh so unless you really make sure that the stimulus itself which we have now is strengthening that public health system you're going to get you're going to still have a problem in the next health crisis and unfortunately there will be other pandemics so first lesson is don't demolish the welfare state re you know rejuvenate it revive it reimagine it and on health god is that important also globally global health systems are important had this crisis begun in africa and not china we would all be worse off uh second is that kind of you know need to govern this crisis in a capable agile flexible way you you can't outsource that right so that difference between how the vaccine was rolled out through the public health system versus the Deloitte way and or not just Deloitte i shouldn't keep bashing Deloitte but anyway consult is consultation infantilization way that we did the test and trace system that's already a really big lesson and the vaccine rollout has just been really inspiring i got my vaccine last week i'm not sure i didn't jump the queue i somehow just got there because we're vaccinating so many people and i almost felt like crying just to see how well it was organized and just how nested within the community um third i think the whole vaccine thing you know as great as it is that we have an oxford vaccine in the UK so you know that'll be more kind of national we can't have a nationalistic approach to the vaccine it's a global pandemic we really need to do with the world health organization is talking about which is preventing vaccine apartheid um we need to govern the intellectual property rights it's interesting astro zenica and the oxford model was very different from the Pfizer one they actually negotiated that the price had to be remain low for the astro zenica one whereas Pfizer which is written about Pfizer for the last 20 years it's it is a very financialized company it's it's not a coincidence that that wasn't negotiated uh god i think i'm only on three i don't think that matters yeah oh well it's a good three thank you very much and i think i think and don't don't now sorry really important because we put all this money in the furlough schemes etc please don't go back to austerity because we think we need to pay it back yeah that's not true for the public sectors true for the private sector you need to eventually pay back alone it's not true for governments we need to really learn the lessons of what it means you know in the same way that we created all this money whether it's going to war to fight this pandemic we need to ask ourselves what is money for what is finance for and not worry about the bottom line for the government but make sure it's actually investing in that structural long-term you know strategic mission oriented way to catalyze all this innovation across the economy and that's going to keep actually eventually the debt to gdp in check because it's going to keep that denominator you know going in the right direction thank you i think you've answered one or two of the other questions on the way through there so thank you very much and the last question perhaps um from um i don't know whether he might be uh might be the youngest participant of any way greetings to dr matsucato and the royal philosophical society speaking as an economic student i'm curious about what changes you believe should be made in undergraduate and postgraduate economics teaching so that students may better understand these new concepts from bernardo al midi al midi al mida so um the last question if you can a quick thought to learn so the quick question is i've actually written a book called rethinking capitalism we have a course on it at university college london the curriculum and the videos are all free on the web actually um and it's all there the answers are there but what we do in the course is we break down you know what do we understand about what makes companies competitive you know it's actually not about perfect competition theory it's about these long-run investments and that requires a different theory of organizational competence from those that we learn about in neoclassical economics with the representative agents and perfect competition theory equally we need a very different understanding on the government side which i've already talked about it's not about fixing markets but co-creating and co-shaping um and everything along the way you know what is money what is finance it's not just a medium of exchange money is not neutral finance is not neutral how we finance stuff actually then affects what happens right so this non-neutrality of finance is a very critical uh part of rethinking capitalism in the economy and economics which is not in the curriculum often um but yeah the quick answer is go to our textbook called rethinking capitalism in the course called rethinking capitalism at my institute for innovation of public purpose um and there'll be some answers there for you well thank you that was so much um i need to go feed my children yes quite uh quite a deal we'll let you get away but anyway um if anybody who's been on tonight is wanting to look into some of the issues that professor matzakato has um been going on i has been going on we have been covering i have been going on i can recommend um her book um the mission economy and certainly it's a very stimulating uh read and um i think uh one of the um the ones one of the things that struck me in reading the book was towards the end how um again she said that um woman woman put life at the center of the economy uh not the economy at the center of life was how she ends up her how she concludes her book and i think um i think putting life at the center of the economy is certainly something we should be striving for so um wow quite an evening thank you very much for thank you that's in between all your busy activities and your children so um i hope the Royal Philosophical Society of Glows who won't be a bad word amongst the family tonight and it'll be good and it's been a tremendous privilege having you with us tonight so thank you very much thank you very much bye bye goodbye