 Good evening everyone. Is this microphone working by the way? Okay, great. I'm Alfredo Sanfilo. I'll be chairing this session today and I'm very very Happy and honored to have professor Oslem on around from the University of Greenwich to Give us the development studies Seminar this evening But before we start with with the seminar there's A piece of information from the Students Union, so we'll have exactly 23 seconds for the SU Hi everyone, can you hear me all right? Yeah, I'm Hamish. I'm academic affairs officer with the students union this year I've just sort of come to make everyone aware about one of the things we're doing at the minute and one of the parts of staff Student kind of mobilization that's happening right now around opposition to This decision that's being made about student hubs what they want to do in a nutshell is basically Take away your departmental academic support and replace it with a series of hubs So in essence if you have a problem academically with your degree You wouldn't go to your department anymore You would go to a hub and you'd be completely withdrawn from your department in terms of the the connector What we're doing about this is we have a petition at the minute that's going round We'd really appreciate if everyone could sign that it's been going around on student lists and also on Facebook and Twitter There's also a staff student walkout on Friday 1pm and we really really really would appreciate it as many people could join that as possible It's gonna be a massive show of solidarity for the members of your sort of administrative staff Who's next are really on the line here and also just a show to the school that we we oppose this Hub system and we really want actually Departmentals academic support from our departments and not from a student hub. So yeah any questions you can email Academic at sasta ac.uk. Thank you Okay Now professor Oslem on around Teachers at the University of Greenwich and she's also director of the Greenwich Political Economy Research Center Oslem has done an enormous amount of research on Inequality on wage-led growth on employment globalization gender and economic crisis. She has also directed research projects for the International Labor Organization for Unctard for the Institute for new economic thinking for the foundation for European Progressive Studies the Vienna Chamber of Labor the Austrian Science Foundation and Union's 21 She's a member of the Scientific Committee of the Foundation for European Progressive Studies of the Scientific Advisory Board of the Hans Bochler Foundation and the Policy Advisory Group of the Women's Budget Group Oslem is a member of the Coordinating Committee of the Research Network On macroeconomics and macroeconomic policies and a research associate of the Political Economy Research Institute at the University of Massachusetts Amherst She's got more than 80 articles and And public and book publications in the top journals in the fields of economics development studies and development Economics and I'm hugely excited to have Oslem here with us if you want to tweet about this Seminar, please use hashtag so as they've studies also or ESRC Oslem will speak for about 35 to 45 minutes or as long as she wants and that'll be fine and after that professor Ben fine from the Department of Economics who's our discussant today Ben will speak for About five minutes commenting on Whatever he wants to comment about Oslem's presentation and then Oslem may or may not decide to exercise instant revenge and respond to Ben And in any case after they sort themselves out we'll open for questions Okay, so Thank you so much. Thank you And thanks for having me here today It's always a great pleasure to come to so as which is one of the most important centers in development studies and development research I have been asked to talk about Quite a few things to please some competing constituencies at so as so hence the long title Which is building on a series of different? Research that we've been doing it Greenwich So what I will try to do is to walk you through first about some stylized facts of rising inequality and poor performance of growth in the developing countries in parallel with also the developed world and Then I will try to tell you what we find about the impact of rising inequality and in particular falling share of labor income in the pie of national income In terms of its effect on growth and economic performance So this is something that we are quite known for at Greenwich our research on ways that growth I will try to introduce the empirical findings about that to you And I know so as is the home of research on Financialization so I would be missing something if I also don't mention some of the recent work We are doing on the impact of financialization on investment and productivity in both emerging economies and the developed world and hopefully Driving on a lot of negative lessons from the past three and a half decades as Illustrated by these and people findings. I will tell to you I'll try to finish on a positive optimistic note about alternative policies for what I call a Alternative equality led and sustainable development project Okay, so here first is the not so optimistic part rather gloomy experience of the last three and a half decades in the developing world Starting with a series of neoliberal structural adjustment programs Missing increase in the integration to the global economy by the emerging economies Happening in the context of increasing financialization and that along with Increasing technological change is of course creating a ground for rising inequality We have to do a bear in mind all these things near liberal policies globalization Financialization technological change are happening in the context of some very important human-made Policy shifts are related to changes in labor market institutions and in particular Changes in labor's organizational power and their impact on trade unions And of course neoliberal structure adjustment programs for most also means austerity And this cuts in public spending in particular public investment is also coming into this rather toxic dangerous mix as a consequence of that mix Research tells us that there has been a serious Decrease in the bargaining power of labor vis-a-vis the bargaining power of Capital so as the area of maneuver of capital increased area of maneuver of labor narrow down Well, we had has been a dramatic decline in labor's income share in the pie of national income That's what I will refer to In the rest of the speech is fall in the white chair or fall in the labor share in income now a fall in the way chair just to be precise doesn't mean the Weight rates are falling doesn't have to at least all it means is the rate of increase of wages real wages up to controlling for price increases, obviously has been without an exception Lower than the rate of increase of the productivity of labor up for labor So if you like weight share is nothing like weight per person times the number of Employees as a ratio to the national income pie, which we refer to as the gross domestic product So that's what I mean by a fall in labor share It can happen even when real wages are increasing Of course, there are years long episodes where real wages have also been falling but abstracting from the details of that what we have been observing is a secular Continual and quite dramatic fall in the labor income share now that has not Let to a good news in terms of growth and development performance this is quite on the contrary gone along with a vicious circle of a global race to the bottom in the labor share simultaneously in all major economies and Either lower growth performance or more unstable more volatile growth performance and fewer job creation or creation of bet quality precarious jobs now here is some of Skylines facts about what I've been summarizing so far. This is the graph of Falling labor share first. I will talk about the major developing or emerging economies here And in the next slide, I will show you the same story for the global north or if you like the developed world Now this is adjusted weight share the share of labor income in national income Adjusted for the labor income of self-employed people the technical details You can ask me later if you're interested in it. The data goes from 1970 to the 2000s and Weight share in 1970 is Equated to hundreds for all countries such that we can see the trend abstracting from the differences across Countries now mind you this is a data. That is one of the most difficult Data to get old of income distribution income inequality and even wage data as One of the best kept secrets of governments and statistics agencies, but after a lot of Search and trying to link different data sets. We were able to come up with with that Now it looks like there is a lot of ups and downs there, but if you try to abstract from that In this big mess what you see is that starting from some time around 1980s in Latin America in Turkey and later in Asia in particular in Southeast Asia starting from Mid-90s onwards. There is a secular decline in the labor share the orders of magnitudes are quite Significant in some countries. This is about from the peak to the Bottom line in the 2000s. There is some 30 percentage point redistribution away from Labor income towards capital income the mirror image of the falling labor share is Rising profit share basically wages and profits at up to the total of the national income So if this is falling this means profit share is increasing by the same amount now I say this is not a trend that is just the problem of Emerging developing economies in the global south similar neoliberal policy packages in the context of globalization financialization and deterioration in labor's bargaining power took place in the developed world in the global north as well So this is the same data labor share again indexed hundred for the first year for the Developed part of the world now if you this data starts from 1960s So basically it's a bit easier to find a long time series data for inequality for the developed part of the world But it is still not going much Beyond that either so again here the picture is very clear the decline in the way chair maybe from its peak 2000s is just a bit more modest But we are again talking about the redistribution away from wage income labor income towards capital by orders of magnitudes of about 10 percentage points that this is a massive change in the more Equalizing trends in income distribution that we knew from the post-second world war era So what is happening here? Why is it happening is of course one question? But the thing I want to focus today is what is the impact of that on development and growth? so By the way, the two graphs are covering all the G20 economies So basically what we looked in this piece of work was the 20 largest economies of the world that make up G20 They're about 10 developing economies and about 10 developed economies there and all together G20 is making up about 85% of world income. So when I say global race to the bottom in labor share I really mean global and it's summarized in these two graphs and if you were to look at smaller economies In both the global north and the south and there is research on that too the trend is sadly not very different Now I'm not going to talk about this large table here But all that is to just pose a puzzle to you, maybe not to you But to a mainstream orthodox net classical economics labor share has been falling in the last three decades everywhere in the world and And if you look at the impact of that on growth The impact is far from clear So here in the first half of the panel we have Average growth in GDP in each decade from 70s to 2000s and I'm cutting it before the Great Recession of 2008 because obviously after Great Recession And they're very slow or missing recovery afterwards It's a very different story, but the growth performance of some major developing economies if you look at Turkey Mexico Korea Along with this race to the bottom in labor share and rising profit share their growth every decade is slowing down compared to the 1970s you could say well China Looks like an exception here And of course if apart from the lost decade of the 80s in Argentina if you look at 1990s of 2000s actually growth is picking up Okay, so there are differentiated effects, but it's far from clear that lower wage share higher profit share will lead to better growth performance, and if you look at the Global north if you like to Europe some large G20 members within Europe or the US Japan Canada Australia It's very clear every decade along with rising profitability falling labor share growth has been Over and it has been also more volatile if you look at the details of the data. So, um What does that mean for economic performance? Now? I didn't make up this title This is from the Financial Times and after a speech. I had given not it So as not at Greenwich, but investment fund managers conference in London organized by Hermes investment fund So the journalist was in the audience. He heard the sort of speech that I started giving now and Need I think summarize it may better than I can do. So I'm using it therefore Capital gobbles labor share, but victory is empty. I should also add that Session at this investment fund managers conference was titled Labor's uprising question mark investment fund managers were really concerned about the instability that can result out of rising inequality, so we have we may have our good concerns about fairness and equality As a value in its own, but also if you're concerned about growth And stability in an economy you need to be concerned about inequality and fund managers understand that though It doesn't always go down the route of of course policy influence Now here is another story. Is there anyone from Korea, South Korea or is there anyone who can read South Korean? All right, so you could maybe translate the title for us We were invited to South Korea in October and then there was an interview with the newspaper after it's one of the Leading daily progressive newspapers The title as my journalist friends tell me reads apparently and please check if I'm told correct by the journalist Distribution is not the result of growth, but the source of growth And then in another place apparently it says when wages raised productivity will also be raised now Here is a story. I've been doing that sort of research since I was a student And we haven't been quite successful in changing reversing the tide in terms of economic policy impact South Korea has very recently elected a progressive president They've invited us to talk about policies that can foster equality along with growth And then they made their civil servants working for government departments listen to us By the way, those civil servants are all trained in Ivy League universities in the US Trained very well in the classical economics certainly not in any of the type of alternative economics I will be talking about today. It was all news to them They had to diligently sit half in a half a day in the same room for us Listen to our research and try to understand it and ask questions to us Meaning it looks like policies are changing or at least policymakers are starting to listen to alternative economics Only if you change the government so it's not happening the other way around at least not in my experience But so I'll try to tell you why Distribution income distribution isn't necessarily something that comes with more growth or equality It doesn't make it as they happen as an outcome of growth as the mainstream would tell us But rather income distribution has crucial effects on growth and development. This is what I'll try to explain Now without going into any formal economics, there is some common sense If you look at new classical mainstream orthodox economics In their models in their theories and in their empirical work wages of the workers are just a Cost item higher wages means higher costs lower wages means lower costs higher Profitability and they would expect they theorize that this would be a good thing for a private investment for Export performance and eventually for growth and the benefits of higher profits will eventually trickle down To the rest of the population and workers in the form of also jobs Eventually now in our models in our alternative heterodox if I may be precise Pascansian in spite my kinds, but also max If I'm there to say general models wages are not just a cost item We do acknowledge that wages are of course a Source of cost for businesses, but we also say that they have a dual role Crucially, they're the most important source of demand in an economy So when you decrease wages To be precise when you decrease the wage share like it has happened across the board in the last three decades Actually, this will have an effect on demand It will affect all components of private demand private demand is composed of household consumption investment of private businesses and net exports meaning exports minus imports, so when you decrease wages I Can bet on everything I have it's not much But for me it's everything I have that it will have a negative effect on domestic consumption if anybody is Interested in doing some very simple statistical analysis you can see that very clearly there are very few Things that give me such an easy right the impact of falling wage share on consumption is negative Why for a very simple reason the poor have a higher propensity to consume compared to the rich You could say the rich consume a lot then the poor in absolute amounts You're right, but compared to as a ratio to their income the poor will consume all their income And maybe even take some loans if they can and the rich will consume maybe less than half of their income They will save a lot. So if you redistribute away from the poor to the rich or to be more precise for our purposes Take away from labor to and give to capital You will lead to a fall in consumption of households in the aggregate economy So you will have a negative effect coming from a fall in the wage share on consumption You could you could be forgiven to expect it But there may be a positive stimulus to private investment because profit share is increasing at the same time This is not that easy to prove But I am happy to accept at least a theoretical argument But we learn from Keynes also private investment does not just respond to profitability They actually look at sales prospects business expectations It's shaped by what is happening to demand So at the end of the day you have to see how sensitive investment to is to profit versus demand And what will happen to demand once you dump wages? So the ultimate effect of a falling wage share rising profit share on private investment is actually ambiguous But there is a positive Partial stimulus Which we can expect the third effect on net exports again It's fair to expect that lower wage share means lower unit labor costs as well They will raise international competitiveness and you will get some positive impact on net exports But that is terribly Difficult to pin down because it will depend on multiple parameters It will depend on how sensitive is your export prices to labor costs if you are China You're exporting a lot of very labor-intensive stuff So obviously the past year from labor costs to prices will be high Whereas it won't be the same if you're South Korea And also it will depend what type of goods you're exporting hence how sensitive are your exports to a change in prices So there are many parameters that you have to know here and same thing applies for imports as well So if you have three things here When wage share falls one negative effect on consumption One partial positive effect on private investment and then one positive effect on net exports If you sum the tree up, what do you expect? Would it be positive or negative? Does anyone who would expect it to be a positive If you decrease the white share the three of them all together Adopter your aggregate demand in the economy in the private sector now abstracting from the public sector I'm decreasing consumption increasing investment and net exports. What would be the sum be a positive Change or a full a negative effect Who thinks it's negative? Okay, who thinks it's positive Now this is what happens when you come to so as okay theoretic is speaking It can be anything. I don't know which effect will be dominant There is a negative effect on consumption and a positive impact on investment and net exports It could well be positive if the other two positive effects on investment and net exports are dominating However, it may be negative as well So in a way the ones that didn't say anything are probably thinking it's ambiguous Why should I now answer which was also correct? So if the total effect is positive This is an economy where lower-weight share will lead to higher demand and eventually higher growth That's an economy which we call a profit-led economy the demand regime is profited Meaning if you decrease weight share increase profit share, you're gonna get more growth If you like me classical economists think all our economies are profit-led and they give the same advice to all of us So I assume that boils down to also thinking the world economy as a whole is profit-led Well, if some of you rightly however expected the effect may well be negative as well So a lower-weight share and a higher profit share then will lead to lower growth Fewer jobs and this is an economy which we call a wage-led demand regime Mind you in a wage-led economy if you're decreasing the weight share, that's really bad for growth That will lead to stagnation in demand So I use the term here wage-led broader speaking But you could broaden that analysis to the impact of inequality at large We are now working on for example the impact of gender inequality on growth And therefore I like talking about equality-led regime where higher equality leads to more growth Now, this is why we claim that this is a general model because Theory to be speaking the impact can be both positive or negative So we don't know we have to look at the parameters of the economy now you would be forgiven by looking at the stylized Thanks, I summarized you at the beginning falling weight share lower growth in at least some of the economies They should they look like they are wage-led and they would pose a puzzle for the classical Economists now what did we do? Of course? I know everyone would like to now go to this party next door, but I'm grateful that you're still Bearing with me. So we have looked at the impact of rising inequality falling weight share as I said for G20 Economies that was the work we did for United Nations International Labor Office with my colleague Yorgos Galanis And we have also looked at that for every single Western European Union member state in addition to the aggregate or large European Union analysis we had for the G20 Study for a recent work we did for foundation of European Progressive Studies with my PhD student Thomas Corp's What we do is very simple We estimate the impact of falling weight share or a change in weight share and consumption on private investment on exports and imports going through also its impact on prices So it's a bit tedious there then what we say is any change in these three components of private Demand will have also further repercussions For the national economy it will further affect consumption and investment and imports So the so-called multiplier effects if you have taken an introduction to economics course Then what we do is we ask a more interesting question in my opinion. We say look this is not happening in just one country at a time It's happening globally. It's a race to the bottom in all Global north and global south. So what happens when weight share falls not just in your country in isolation Not just in Turkey in South Korea In India in China, but it's also falling in your trade partners in Europe and the US and so on So how is that falling the weight share in your trade partner? effecting their export prices, which is your import prices and How is that change in inequality in your trade partners affecting demand in their home economy and hence their GDP? Which is basically from your perspective the foreign GDP which will affect then your exports We try to simulate the fullness of this global interactions And here's what we found First of all if you decrease the weight share the impact on consumption is really very strong there is Some positive effect on investment not in all countries and wherever there is even a positive stimulus on investment That is very small compared to the big negative effect on domestic consumption So if you were to think of an economy that is not trading with other countries, which is closed Those domestic regimes are surely wait let of course we do accept it Countries are trading with each other So if you add on top of this negative domestic demand effect of raising inequality Falling weight share also the impact that comes from their exports That effect is positive, but it's not large enough to offset the negative effect again on Consumption so what we find in particular in large economies Both in the global north and to some extent in the global south Demand is wage let certainly in the EU as a whole in the US in Japan But also in some important developing economies that South Korea and Turkey demand was wage let in Isolation by the way not in all developing economies demand was wage let in isolation you would find some countries Quite a few of those G20 members in the global south Mexico India China, South Africa, Argentina who seem to be profit late But what was very interesting was when there is a race to the bottom in all the economies in terms of declining Weight share at the same time those some of the smaller emerging economies like Mexico India Argentina we're not able to grow anymore precisely because of the reason I have mentioned It's not we share isn't only falling in Mexico and Argentina but it's falling at the same time in the US in Canada in their trade partners as well as their competitors Let's say it's falling at the same time in Asia or in other little American economies That is basically wiping off any benefit you can get from falling labor costs on your Foreign demand and it exports hence your left foot on the those very strong negative domestic demand effects particularly originating from lower consumption demand of the households Okay, so overall just to summarize the big picture If there is a one percentage point fall in the way chair if very chair falls from 60% of national income to 59% In each country at the same time in G20 in 85% of the global economy that's leading to a falling global GDP the fall in developing economies such as South Korea is even stronger and In Europe you also get quite strong impact now to reverse that and think of an optimistic end to that negative finding or negative experience be simulated a scenario where the way chair increased in all the economies of the world including China including South Africa Which remains to be very profit-led demand regimes even in a race to the bottom Consolation What we found was it's possible to increase the wage share even in those strongly profit-led Developing economies if we start increasing it here at home in Europe in the US and in other wage-led economies It's a stronger amount So we basically try to simulate a scenario where some economies go back to the more egalitarian years of Late 70s mid 70s some other economies have a smaller area of money where they increase the wage share by let's say Only 3% of national income others have even a smaller area of money Well, but they're all able to increase their wage share that's giving us 3% more global GDP in Korea South Korea the impact was very strong 7% and in Europe The impact is again very strong by about 2.4% of higher GDP now all it is teaching me one very important Lesson first of all higher inequality higher profit share isn't leading to more investment on top of that some something In addition to rising inequality very fundamentally happened in these last three decades and there was Financialization Financialization has very significantly contributed to the breakup of the link between profitability and investment So what we see is a rising profits, but very stagnant Investments private investment performance and this is the case both again in developing and developed economies to pin it down where we looked It was the performance of particularly non-financial corporations financialization is a very broad concept But there is a dimension of that that is fundamentally changed the behavior of also the non-financial sector So what we looked at was the financial activities of non-financial corporations very broadly defined Because if you think of the mainstream literature in favor of financial liberalization One of the key ideas there is more financial liberalization the so-called financial development will create more funds More savings and therefore more funds for private investment. Well, really. This is not happening in Some of the key large emerging economies that we have looked at we found very strong negative effect coming from financial activities of non-financial Companies defined as their dividend payments to their shareholders as well as their interest payments But not just the financial payments, but also their financial revenues We're having a negative effect on the investment of non-financial corporations So you could think financial revenues if a non-financial corporation is buying a government bond or buying the shares of another company It's gonna bring in revenue and it may eventually lead to a higher investment No financial activities is diverting Non-financial corporations away from their core businesses and leading to a negative impact on their investment This is the recent funding we have with Daniela Tory For a project that we have done for UNCTAD at the United Nations Now interestingly, there were two emerging economies China and India that didn't fit into that pattern Otherwise, we were eager to call the paper race to the bottom in investment along with financialization But this negative effect of financial activities financial revenues and payments on private investment It's just not happening in India and China. There's no significant effect. So obviously, I know you're working on also Financialization in China and India and it has also gone quite far But in terms of the corporate governance about what private companies are doing in the non-financial space They surely are very different from Brazil, Turkey, Mexico, South Korea or South Africa So there's a lesson to be learned there But this intermingling of financialization inequality obviously is leading to a poor private investment performance Investment in our experience in prickly is not very responsive to profitability But it is very strongly responding to demand. So if you cut demand with higher inequality Higher financialization, which by the way is also feeding into high inequality Where you get is this toxic mix of financialization and inequality leading to low investment so obviously that will lead to low productivity and And a poor performance in terms of development. It's not really a puzzle Okay, so often when I talk about Changing the tide I'm asked well, how can you reverse all these trends in the era of globalization and financialization Now here is the kind of Ideas that we need to become aware first of all the rational their works for a single firm at the micro level Doesn't work at the macro national level For example, you could be forgiven that cutting wages in a single company may help Profits investment and growth though you're probably ignoring all the impact of cutting wages on morale and productivity But you could be forgiven to believe that it could work not in this audience But in some other audience But the logic is if you add what works for one firm at the country level National level if your economy is operating in a wage-life demand regime, that's not gonna add up There is a policy of composition between the micro versus the macro logic similarly you could be forgiven that your small economy Mexico or Thailand and and you rely on Export demand a lot and if you cut wages you could really Make your way through higher international competitiveness to higher growth Through wage moderation, but what can work? Maybe for one single small economy if it's the only genius in the world will not work if all the capitalists follow Suits now the as you have seen neither capitalists in Europe nor in the US or in the Developing world are alone in trying to implement policies that have led to this race to the bottom in the way chair So when all countries are doing the sign the positive impact that a small open economy may get In isolation from lowering wage costs will not add up because all your trade partners Are doing the sign so the national logic doesn't add up to a regional logic again to reverse that you could is a small open Economy you could be worried that if I'm the only country in the world who would increase wages I will lose a lot in terms of international demand. I'm being asked this question all the time Well, this is why we need to talk to us. This is why regional cooperation and trying to cater for a larger regional block may help if all your of course Regional partners are eager to opt for a high-road labor market policy trying to reverse rising inequality Now on a negative note though when all the countries are trying to gain a competitive edge by implementing the same wage moderation policies there is a limit to success because everyone is doing the same and you're wiping out each other's competitiveness by This race to the bottom so in a highly integrated global economy raised to the bottom in labor share It's not going to deliver more growth and more jobs for anyone And if here is the interesting now puzzle if you like We could think that globalization makes it very difficult For countries to follow egalitarian policies because you're more likely to be a profit-led regime When net exports are very important for your country the globalization isn't just about increase in trade It's also about contingent of policies. So political globalization Application of the same sort of labor market policies leading to a fall in the wager in all countries is making each country more likely to be a Wage-led economy as opposed to be as opposed to a profit-led economy Sorry, there was a type of there. It should have said globalization Political globalization will make countries to be more likely to be wage-led. Okay. I'm saying it later down there So there is no type of this is correct And here is the thing I have said before in terms of Some of the economies which you could think looking at my simple Bivariate growth table at the beginning along with falling wage share growth has increased in Argentina You could have told me and Well, there is also some developed economies there who could fall into that Group but when all these countries at the same time are doing the race to the bottom in the labor share They're actually not able to grow out of that and I really like this feigning because particularly if you look at NAFTA Mexico, Canada, the US are in a trade bloc Mexico seems to be in isolation a profit-led economy Canada is also in isolation in our findings at least looks like a profit-led economy Meaning if they're the only country in the world decreasing wage share, they would grow But they're not the only country doing it They're doing it with their major trade partner the US in NAFTA together in North American free trade Area, so what we are getting out of that is Mexico Canada US they're all contracting along with rising inequality Same applies to India, which I thought was a very interesting policy lesson now and I did tell you that at least economically statistically we found that Falling wage share led to a lower demand and lower growth in the global economy to me It makes a lot of sense because mind you I also emphasize that our Domestic economy meaning just the sum of household consumption and private investment Would contract along with falling wage share because I said domestic demand is wage-led now if you think of the world what would have made world a Profit-led economy would have been a very large trait with some other economy outside the world To turn around this negative effect on the domestic demand of the world now the world However, as of now to our to the best of our knowledge is a closed economy Because you're not trading with Mars and this is a finding I really like because it's very intuitive and I also like science fiction Obviously if we start trading with Mars my analysis would not be valid anymore. I would have to think of The amount of trade with Mars and how important it would be it will also depend However, the wage policies of the Martians now before I go into the details of Science fiction, let me try to finish on this positive note again We try to simulate These policies for G20 as I said and the labor Institutions that are trying to provide input to G20 international trade unions I asked me to provide a piece to the 2014 G20 meeting and what we did there was to say look Reversing inequality is possible That is gonna create more growth if you all do the same and for heaven's sake you're meeting as G20 The whole idea should be to coordinate policies. You can do that However, the growth that can be generated by reversing equal inequality is small if you want to create decent amount of jobs for everyone you need to do more than that and that was required public investment So we simulated a policy mix of rising public investment in all G20 economies at the same time and Rising wage share every year by a small amount But in each country through the good policies high road labor marks policies I would say you are getting a very strong stimulus in G20 with that Okay So what do we need to address the key challenges of our time for me? This is Policies to achieve equality Full employment and ecological sustainability. First of all, you need public investment So you need the state to lead the way you need labor market policies for an equality-led Growth policy and you need of course to reverse Financialization and change corporate governance. Now. I did promise to talk a little bit about What are these policies? So let me just very briefly give you the headlines In terms of the labor market policies, you need policies that would change the distribution in the marketplace And this is not rocket science. We know why we're chair fell while we can change those human-made policies to reverse that So it is about creating institutions and here again the role of the state is very important It's about reversing the trade union legislation. It's about making trade unions legal as opposed to something On which you can lose your life. It's about regulating the labor market It's about getting rid of the excessive flexibility in the labor contract such as you ours contracts It's about improving union legislation. It's about creating institutions to increase the coverage of collective bargaining. It is An outcome of of course also stronger union power It's also about closing gender pay gaps It's about ensuring that equal value of work is equal paid again These are all coming from some other research. We are doing with Alexander Bushanski who is also actually teaching as a tutor at but High-gender pay gaps is one of the key reasons are falling white chair So if you try to reverse that by making sure Gender get wage gaps are closed You're gonna go a far away and again minimum wages something very simple plays a big role Not just for the low-skilled low educated workers, but even for the medium and high Educated workers higher minimum wages leads to higher white chair Obviously, this is all about pre-distribution so far what I said redistribution meaning progressive taxation is as important as Pre-distribution also in terms of reversing Inequality and I said public investment is key and here we have a very broad understanding of public investments Not just in physical infrastructure for ecological sustainability, but also in social infrastructure With that feminists mean purple investment in education child care health and Social care this is of course about socializing the otherwise Invisible unpaid work women are doing and the good thing about social infrastructure is it's creating a lot of jobs a lot of demand It's this is massively Equalizing and of course it's giving a big boost to demand So I'll end by saying if you want equitable and sustainable development You need green and purple public investment with decent pay for both men and women and you could be forgiven for Thinking that how are we gonna finance that? What will be the budget impact? I will just say by rephrasing from Kains Take care of full employment and then extend it a little bit Take care of also equality for men and women and ecological sustainability your budget actually does take care of itself Meaning if you implement these policies the impact of that on your budget will also be positive That's the finding of another piece of research. I'll end here and see how far the time Thank you as long this is Absolutely fascinating. We criticize now liberal economic policies conventional adjustment programs But we need to have also an alternative We need to have a source of inspiration to mobilize people and this is precisely the work that awesome has been leading Designing policies that are that one counter to the mainstream and counter to now liberalism and that can be effective So, thanks very much for that Ben Okay PhD students will be pleased to know this is my chance to be famous for five minutes Let me begin by saying that Osam's given a compelling eloquent and invaluable case for Identifying and remedying some of some I would say of mechanisms by which contemporary capitalism is Caught to some degree unevenly in what I've called the four lows low investment low productivity low wages and low employment and this creates a vicious circle and the task is to science see how this can be transformed into a Virtuous circle of the four highs and The case is made for the public sector playing a leading role in investment and social wage Time is short for me So I can't go into many of the things in detail But I think the first point I would make is the relationship between the four lows or indeed the four highs is much more complex than than is has been laid out The Grand if you like methodological theoretical and historical question is whether national capitalism Can be divided into these two types ideal types of profit led or wage led? As the basis for understanding their performance just by virtue of these Simple dualism and obviously my reason my argument is it's not quite as simple as that although it does identify Some of some of the mechanisms involved In particular Oslem identifies one new kid on the block not so new now maybe a teenager and Two old ones the new kid on the block is finance, which is seen as speculative and undermining levels of investment The other two older kids are globalization Which is characterized as bringing about a race to the bottom and the third old kid is a state Which I presume as is seen as having been captured by austerity and financial interests Otherwise, I presume it would be possible for state expenditure to take the place of the reduced wage share in an increasing demand and the issue is as I think laid out very very clearly how do we reverse these Roles to get to the four highs In the old days during the post-war boom The answer used to be Scandinavia or Germany or Japan I think the answer today would be China. I'm not sure it's India. I just wanted to add one other point here which is that the Since a global financial crisis the neo-liberal response has been to continue to support finance almost without limit in The mistaken belief that this will promote indirectly either investment or consumption demand But this has not worked at all as we know and is merely sustained Financialization and its speculative profitability Perhaps I want to move on to say though that Partly because of the ideal typing between the two types of regime Um Somewhat static picture is created of the situation and I want to argue that The situation is changing Currently and possibly quite significantly and my starting point is That is is some research research is being done on the role of globally organized multinational corporations whether financial or non-financial and what we know is that Somewhere between three or four hundred multinational corporations basically run the world and Two-thirds of these are financial companies And actually what we're witnessing at the moment is a degree of movement in two Ways which in a sense have not been recognized by Oslo and which create challenges for us in implementing Policies or the policies that she's suggesting The first is there is increasing move towards state-led industrial policy To integrate Globally organized finance and industry. I'll give an example of that in a minute But this is happening on a global scale It's the global organization of these moves which are very very important and the second thing that's happening It overlaps with and complements the first is state-led support for private financing of Private infrastructure, so these are two big things which are happening at the moment relatively new and Oslo's analysis is primarily pitched At the national level with the global as the aggregate of those nationals and rightly points in my view I'm not saying this is wrong, but rightly pointing to the considerable scope in current conditions for national expansions across Economic and social wages as well as industrial policy and public investment But if we for example, I can only pick out one example I can give many more if we look at the nuclear power program in Great Britain. This is about Chinese finance it's about French technology and it's about British nuclear power and this is the way in which the problems of Coordinating industry with finance growth with finance and development is currently taking place and this is going to happen then along lines that fracture rather than strengthen the capacity to make national economic policy and so that's the point I really want to put forward that the I Have no problem in looking at the scope for and the potential for making national policies along the lines that Oslo has put forward I don't even need that But we have to relocate that not only within a framework of what's called methodological nationalism That is looking at what is happening within the state and seeing the global is simply the interaction between the states increasingly our world is one which is as I said fractured by the organization of very very powerful multinational corporations and the process of Struggling for alternative of policies will have to deal with those issues and not just ones of Influencing the scale and form of national policy, but how these interact with severe battles with globally organized financialized multinational corporations Okay, that's it Would you like to respond to that? I would love to respond to that I think a lot of what I say is By the way, you can always download from my branch political economy research center website now I Think I agree with Ben Either I was too quick or One is to go to the papers and look at the details Ben, but this is exactly what we are trying to avoid we are avoiding in methodological nationalism here we're trying to look at the interactions across countries and It's very important. I think to recognize what a single country alone can do in its National borders Without coordinating with any other country if it's the only country in the world to opt for more progressive high-road labor market policies and Races what can be achieved if you coordinate these policies? The area of manoeuvre is certainly narrow if you're an open economy In the world of globalization and financialization for sure. This is why coordination is very important Well, this is why we try to work and talk with International trade unions such that they try to make these interventions at the global level However, I also don't want to sound that there is nothing we can do if We can't achieve simultaneous change in a Significant number of countries. So there is of course something that can be done Even if you're South Korea who is the only country with elected a progressive government on earth and they want to increase the minimum wage Do some states are spending to reverse inequality But also to improve the lives of people well-being of people in Western Education childcare and stuff like that. Yes, I want to tell them. Yes, you can do that But of course if your trade partners are doing exactly opposite of your what you're doing It's gonna narrow down your space. So that invites The idea that well, you're an important country. You can try to be the policy leader You can try to export these good policies Of course, it's a lot easier to say that when you're speaking say in the context of the European Union European Union has been very successful in coordinating the bed policies European Commission's whole policy advice is that Europeans to do wage moderation to become more the most competitive economy in the world Plus, of course, European Union is a very powerful actor in the IMF and the World Bank who is giving policy advice to not just European economies who need bailout packages like Greece But also to the rest of the world that you need more flexible labor markets, which and minimum wages are really Harming employment and so on. So we have been good in coordinating bed policies. Yes If we want we can coordinate the good policies, but again, I don't want to be pessimistic that if you can't Change Europe and the US. There's nothing you can do in the global South For example, when I spoke about that in South Africa, I said South Africa is a very large economy And if you were to really think of a Southern African trade bloc by also trying to have some policy Synchronization to increase equality if you were to be the policy leader of that You could depend on that large South African market and boost Demand by boosting wages and opt for also more space for Industrial policy along with the good policies as opposed to industrial policy that's being used at the moment to posture again The multinationals as Ben has mentioned. I wish to also add one more thing here We look actually a lot at what multinationals are doing. The financialization Analysis we do is based on the balance sheets of Multinationals consolidated budget. So we are basically looking at their global activities And yes, there are global financial activities is Hempering their investment and similarly a lot of the fall in the way chair. Of course is related to off-shoring Particularly the rising intermediate Trade trade and intermediate goods in the global value chains However, I dare to say the impact of globalization is more or less offset Or could be offset by the role of trade unions if you like there is a negative effect coming from globalization particularly the globalization of capital and by the way not migration As a migrant I feel the need to emphasize that But there is a very strong positive effect that can come from stronger trade unions and higher coverage of Collective bargaining or higher minimum wages So basically if we hadn't had the fall in labor's bargaining power We could have offset all the negative effects that were coming from this powerful globalization and the rise of multinationals on the way chair So globalization took place in the context of a massive institutional and political change in terms of what the state is doing What legislation the direction in which the legislation labor market legislation has changed hence We are having these negative effects. Thus, I think this is again all in our powers to reverse despite globalization and despite technological change by the way if anyone is interested in Robots coming what's gonna happen to inequality? Yes, all this can be mediated by the good institutions that give more muscle power to labor with a recapital At least this is what we are learning from historical evidence I'll stop here because I'm sure there will be more comments Else we can have a conversation if no one else wants to pick up Thank you very much. Thank you Okay time for questions comments our group two or three or four questions at start and ask wasn't to respond to them This please I Hello, that's good. This is strong Yes, the point you made regarding the link between profit and investment I just well was wondering how much it's got to do with the elite Taking their capital their wealth and putting it in overseas shell companies Thank you. Thanks very much. Yes Hi, I was just wondering what you think the development of the Asia infrastructure Investment Bank and the one belt one row policy of China will do for development studies For the Asia infrastructure development Bank and the one belt one road initiative Thank you. Any additional questions for this round? Yes Hi, do you think that? Re-incentivizing many of those multinational Super firms that you mentioned to invest in productive industries or just industries in the real economy as opposed to the financial economy is Needed to also kind of reconnect Wages and profits as opposed to profits just being connected to the explosion of finance and financial products and their values Thanks. Thanks very much Already a lot of material here I mean it's a very important problem obviously for for states and I'm being able to raise the revenues they need from the multinationals this fine increase in profitability, however Looking for my new classical lens You would expect to take sevens to be since they are leaving more profits for the firms or rather than Getting them tax to the Jamiro investment, which it's also not happening there is a very clear case that if We can increase corporate tax rights and close tax loopholes coordinate again globally To make sure that multinationals can't Do this race to the bottom in terms of corporate tax rights and use legislation against each other This is not necessarily gonna hurt investment because whenever we talk about Higher corporate taxation We are being accused by being very old-fashioned and going back to 70s and this will surely hurt investment Whereas you're seeing in prickly executive opposite. Actually multinationals are very successful in avoiding Texas And they're not investing and I emphasize we are working in this piece that I mentioned about Non-financial corporations with their global balance sheets. So basically it's all their global investment and global profits Their investment is so insensitive to their profits and the reason being they're sitting on their Profits and buying the shares of other companies or buying back their own shares even worse rather than investing and surely The incentives that neoliberalism is trying to give to the firms in terms of law taxation and so on is not Leading to a high investment But yes Texas is a problem from a nation's side perspective the capacity to text perspective and what nation is Therefore also very important and this is also why it's a pity that Britain is Leaving the EU because it could have been used as an area of maneuver to increase coordination also globally In from here, may I jump to the incentives? The most important incentive I can think about for private investment to provoke their animal spirits and business expectations such as the invest is the state again shopping the way by Creating the infrastructure that and and of course creating the demand I take off some teens Industries where we need public investment for social reasons. Anyway, this is for me public transport I have same renewable energy, but also the care economy education and health But this this is also the kind of thing they will create a business environment if you want to stimulate practice This is what you're interested in but I agree Additionally with you that corporate governance is to think how We can you in this investors incentives for long-term investment as opposed to short-term Speculation short-sighted speculation that needs to look at what needs to be taxed. Basically You can imagine having a lower Corporate text right on retained profits Which will be reinvested in their core activities core business versus much higher corporate Text right on profits that are not retained for investment in core businesses. There are other ways you can think very radically About corporate governance, obviously about different policies But surely something has to be done about shareholder value orientation into corporation level So I agree with you totally on that Now in terms of the Asian Development Bank, obviously It depends on the countries that are having the policies of the countries that are having stakes in that Is it going to be something that is going to impose neoliberal policies? Or is it going to be something that will lead to a new Developmentalist paradigm unless you change the major Governments there's stakeholders in Asian Bank, you're not gonna use that bank for the kind of Initiatives that I would like to see. I would I would like to see conditionalities for loans But conditionalities that involve of course Working conditions and the firms they will benefit from loans. I would like to see prioritization of some key industries in green physical infrastructure and purple social infrastructure Currently said yeah, I don't see that happening and Again thinking of China particularly Chinese activities in Africa They're actually not at the moment a source of development with equality Destration in China itself in terms of wage developments are of course slightly better But am I understanding of high-road labor-backed policies? Of course a lot broader than the wage developments It's about collective voice It's about rights such that we can make sure that those developments will apply to everyone and will be Permanent and so at the moment I don't see that also for a locomotive for change for better But obviously there are some other things that one has to learn from China though again These are policies that it's not exporting when it operates in Africa at the moment how they managed to use a state to give impetus to investment how The difference in the impact of financialization on the non-financial corporations in China It's again very different from Say Brazil or South Africa So there are things about capital controls that one has to learn but again, you're also seeing a reversal in these So at the moment More management more states in moments is the positivity. I'm happy to take from China But it's not my development model city and it is a very strong global power So change in China for the better would be important Thanks. Thanks very much. I've got two questions My first question is is about The Experiences with policies similar perhaps to those that you have been suggesting If you think of the example of Latin America think of Brazil or Venezuela these countries that have attempted to implement policies or pulling the economy through Rate by raising wages and neither country did very well So what what does that suggest in terms of the applicability of the policies you're Recommending here and the second has to do with something that you just mentioned in your Response just a moment ago about capital controls I feel if you imagine that There's a good possibility. I suppose and I hope that at the next election in this country The Labour Party would be ahead in the opinion polls and you have a hemorrhage of capital fleeing the country because of the Possible threat that a Corbyn administration would represent for large capital now for developing countries It's very similar. It's very simple We suggest capital controls because you want to hold capital inside that country But that's not the case for Britain because Britain lives off the Trafficking of capital from one part of the world to the other So what happens to the city and what happens to the what? 600,000 people or more perhaps who work in the city of London if we impose that type of control Before I call anyone else we have a reception just after this seminar in the staff common room on the first floor everyone is invited there's food and drink for everybody and Yeah, everyone will be most welcome to come other questions comments ideas. Yes, please Thank you for the Presentation just wondering where does growth come from in your model on your idea because you mentioned that a group demand Leads more growth, but it could be seen as approaching the potential of the economy So how does the potential that potential output of the economy develop? Is it through the investment effect or is it some other effects? Thank you any more questions any ideas suggestions recommendations. Yes Good evening. I think this links back to the question we had a little bit earlier, but Financialization to some extent is referring to what I look at a short term ism So sort of the quick gain or the quick win versus a long-term strategy And if you're looking at policy you're looking at 20 years if you're looking at you know Sort of gender equality and wages we still haven't got there They were saying it should take about 207 years before you get gender equality and wages So you're looking at very very long lead times So how do you look at? apart from incentivizing three taxes and dividends, but really addressing the issue of a Long-term approach versus the short term ism way It's not just a national government that comes in and has five years in place to put something into place and try and Do something or a corporate CEO comes in and he quickly wants the share price to go up and gain from shareholder value So how do you deal with with those two issues and then just one other question on the green investment? He said you busy looking at case studies and doing research on that at the moment I don't know if you've looked at South Africa as a case study, but there's been quite a focus within Tell Africa on what's called the green economy as an area of investment, and I'm not sure whether that is actually Leading to this growth-led economy as as you've alluded to that green investment should lead to growth I don't think that's quite happening there, but I don't know if you've looked at it. I'll be interested in your views on it. Thank you Thank you. Any additional any more questions? Can I ask? Yes, I think the point I was trying to make possibly too clumsily and quickly is a sort of grander historical one Which is I think you've said certainly in your response to the questions that wage increases and presumably also increased state expenditure in any individual country Would be sufficient to lead to better results not only in that country, but for the global economy more generally Would he be even better if it was coordinated? Expansion across a number of economies, but the question is why doesn't it happen then? and so and I suppose I was trying to tease out an answer to do with the the way in which national economies have been fractured and The pursuit of interests are much more along international lines, and we can see that in the case of what's happened to to Greece but that that was really what I was trying to to Push out to what extent can the division of Economies into profit led or wage led Do sufficient justice to the nature of the world today as compared to say it was how it was in the post-war boom? Which might be seen as corresponding to what you're Trying to restore Okay, any more Find around good Okay Shall I start with Ben? No, but let me leave you to the end because this is of course the very substantial question you're Asking, let's start with our fiddles point about Venezuela in particular. I think This is why I really are moving towards thinking of a policy mix now the good news about Progressive or egalitarian labor market policies decreasing inequality increasing wages is that I Have a very good case to make against a neoliberal economist It does not have for growth and it does not even have potential Go I'll come up to a point about potential growth if anything the impractice positive But this is not the silver magic bullet that will sort out all your problems So for at the end of the day You need to That you spy your economy you need to invest in Social and physical infrastructure you need to be able to produce a variety of Different types of goods if you want to achieve employment with decent incomes and You know increased about being at the end of the day because that's what we are aiming it if you don't do that You can leave off All revenues and all prices are doing well, but that will come to an end And it's also about I think stabilizing these policies Political capture and they may be very such trends and so in say the Brazilian case Some of the policies about rising minimum wages very very good But if it doesn't come with institutionalizing I think collective boys and giving more space to Social movements and things can be reversed very easily and there's also the politics of that But again, I mean in terms of the Brazilian experience we can price the labor market policies At least with respect to many more wages, but let's American economists are also complaining a lot about the lack of Significant developmentalist public spending and so public investment to lead the way So again, I think we really have to think about a mix of policies We need to think about reversing financialization in Brazil is a very financialized economy and of course Private investment as well as public investment has been not flourishing as much as it could in the presence of such a high financialized Regime so basically we need to think about all the dimensions redistribution is as important as transfers basically trying to make sure that the the top of the distribution belt concentration is Increasing the more underchecks or things like progress of income taxation, but also taxation of belt again These are the things to institutionalize More collective voice and to avoid political capture So it's not issues that you can sort out by sorting out one or two good policies and sadly Even now in South Korea the two things they're thinking about is minimum wages a more social Transverse and better social infrastructure. I've applied the Brazilian 2003 Policies and broader policies at the moment still is Tending to dairy to them, but if you don't do the policy mix full, I think it will not have the impact I Mean capital controls now one thing that always worries me about the labor parties Policies stands particularly in terms of their vision of brexit is they like talking about managing labor mobility a lot, but they praise trade and Capital mobility or they say nothing about capital mobility For me the single market at least was a check in terms of giving more Balance between labor's mobility and capital mobility And if you want to implement capital controls these kind of things are better implemented at a larger Economic and financial area, then it's a smaller one like to UK. You may be for human UK is the Financial center of the world, but of course if you want to implement capital controls You would want to lobby at the European Union level to do it at the European Union level European Union was actually the UK has been a barrier to implement even in Modest financial transactions techniques Europeans are sometimes thinking we will be better off without the UK So where does that leave us so I suppose policy advice of the labor party would be continue to work together with Europe for More control on the area of maneuver of financial Capital at the expense of the city some jobs in the city may be lost But the city has not been the locomotive of neither credit generation for sustainable investment in this country nor in terms of a Generating jobs. I mean in absolute numbers, of course, it's a big employer, but There the gap that they will leave Could be easily filled with a massive investment program in my opinion and a large national investment bank to create Necessary finance for all kinds of businesses including corporate and small businesses, but also hopefully large publicly owned enterprises in the much needed Areas which requires massive large-scale investment. That's a large scale finance So I would think there is more space for capital controls Even in Britain if you again mix it with public investment and a national investment bank policy giving more support to corporatives local banks savings unions and They will make hopefully the city redundant and by the way, I think Businesses aren't stupid. Obviously Individually nobody would want to see corporate tax rates going up and they will resist it as much as they can but when Policies are implemented that will create more demand in an economy Businesses also will notice that there is an interesting thing going on there. So the threat of capital Outflow is always going to be more hyperbolic than actual capital mobility. I mean this we have seen also everywhere in the world whenever There is a trade union negotiation in Eastern Europe or in the US no matter where Employers start making hyperbolic claims that they're gonna relocate More often than not the threat is enough to prevent the unionization in that workplace So mobility actually doesn't happen, but the threat is there and I'm not saying that Mobility is small. It is huge a capital controls are therefore important And I believe it is possible to impose that on capital now That would tie very neatly to Ben's monster mark. Why is that not happening? But before I go there, let me go back to your point about where it's going to come in form I have talked today mostly about the demand side of growth I mean demand generates more growth and the long and the short of it is Say long runs and such a succession of the short run and in both the short run and the long run Demand is important. So the main is important for investment. Thanks also for productivity and for potential growth in a newer Paper which is not online yet, and it won't be until summer, right? We are trying to have both the supply and the main side of growth model So in the long run the main will have an effect on productivity and positive one And it does and quickly it's well established We just also have an impact of productivity because low wages actually does discourage investment and leads to lower productivity raise high wages does make businesses rethink and Invest and increases productivity Obviously then the impact of growth on employment in the long run is moderated a little bit with this rise in productivity You can build all that So the supply sides What what the mainstream economists tell us to be the supply side which is all about technology and productivity isn't something Exogenous it is actually affected by the main that is affected by wages and maybe time to the other comment about the Long-term impacts in the long run. It's very much affected by also public investment And to my surprise in Britain productivity is particularly affected by public investment in health Education and care the impact of that doesn't come over not just as you were saying particularly if you're thinking of Education and child care the mechanism the impact of that on productivity Okay, there is an overnight effect meaning if you release the productive capacity of Women who are otherwise working part-time who are maybe not working because they dare the ones to take care of the children when you provide universal affordable childcare those women would come to the market and it automatically of course overnight increases productivity But in the long run we know that early pre-school Education and nursery is one of the most important elements of development of cognitive capacity of human beings So if you put those children into the nursery you will get in 20 years very productive adults And also probably more social adults, but that's a different matter from a sheer mechanical productivity perspective Child care is a very key policy for productivity and in the UK the numbers are showing that very clearly It's not about building roads. It's about building or okay having nurseries and probably having well-educated Well-trained nursery teachers would make things even better which we don't have in the moment because those people are getting Sort of the minimum wage a poverty wage now But this is gonna happen in 20 years So capital everybody wants skill investment, but they are understanding of skills as some vocational training not nursery They don't want to pay a penny more text to spend on universal free childcare, right? They would say oh, this is large state. We don't want that Who's gonna do that? Well the only actor in the society they can think for the next 20 years is the state So the state has to play this role of the Bonaparte and maybe well Your other point about green investment in South Africa. I only know one piece of research on the impact of green investment on employment in a variety of economies including South Africa Indonesia South Korea as well as the world economies by both Pauline and colleagues a piece they did for UNIDO is showing actually very positive employment multiplier effects from investment in renewable renewable energy, but also biofuel but also other green Spending such as retrofitting and they're saying it's very labor-intensive. So the effect of one billion dollars spent in green Infrastructure is a lot stronger than spending it in fossil fuel or traditional Enterprises so I see a positive thing to come from the at least the employment effect of that And they were making the case that it's also more egalitarian in terms of its impact on lower educated workers versus higher educated workers men versus women But it's a big book looking at multiple countries including South Africa now all these things sound great And why is it not happening? I think globalization and financial globalization is only two of the guys to blame and at the nation level and you know We have learned from kites, but we've also learned from Marx and one of the most interesting economist I You know have read in my life Mihail Kalitsky Polish economists is Exactly somebody who has learned from both kites and marks and in one of my favorite articles The political economy of of employment. He writes He actually thinks that the whole are all economies are wage late Well, I don't think so. We are post-Kalitsky and so in economy can be profited as well But in quickly, I think the UK Europe, you know some large developing emerging economies Turkey, South Korea seems to be wage late to me So moving on from what Kalitsky writes he says well higher wages will actually increase growth And it will also serve the interests of businesses because it will create higher income higher profit income for them as well as the pie is Increasing their share may fall, but total profits will increase he writes Why is that not happening? Well, he says businesses would not want to give away the threat of the sack So higher wages higher growth and for employment is something that may be conducive to even higher profits But they would want to have the power of second workers Otherwise, they would be too scared of the political power of the working people So I understand this is this is a national problem. I think he doesn't even think of globalization He's writing that in the 48 So the political change can only come from one social actor here in my opinion That's the labor movement because obviously although Clever businesses are worried like the Hermes investment fund manager conference attendees that higher inequality is destabilizing They are still so much trapped in their class interests. And So the state can play the one apart, but the state is captured obviously a I mean The belt he buys election campaigns and the lobbyists to turn the tide around you need very strong labor organizations and social organizations social moments, and I believe this is happening this is not happening homogeneously, but It's it certainly is the only source that can put any of these policies on Table and get them implemented And I see how difficult therefore it is and I suppose we would agree with that Thank you very much. Thanks everyone very much for coming and everyone is invited to the reception upstairs in the staff common room Plenty of food and drink for everybody and you can relax and you can ask us them all the difficult questions that you've been keeping Thank you so much