 Welcome to the latest in our future of EU 27 project series of talks sponsored by the Department of Foreign Affairs. Our speaker today Sir Paul Collier is well known to most people I think for his work on in the development field. His recent book though is a slight change of course looking at capitalism, the future of capitalism and he's going to talk about the aspects of his book in the context of Europe, what's gone wrong with Europe and how European politics can reconnect with voters. So Paul, thank you. Thanks for coming as lunchtime and it's quite a historic day after all. So the future of capitalism, the book, is an argument which basically says capitalism in some form or other is the only system, the only economic system we've ever hit upon which is capable of driving up mass living standards. But it doesn't work on autopilot. Periodically it derails and when it derails you need active public policy to put it right and it always derails in different ways. There's not just one point on the tracks where it always comes off and so always you need to be pragmatic about putting it back on the rails. You need to say what's gone wrong this time? You need to look at context now study and then pragmatically try things and you find gradually you experiment and you find things that dig you out of the mess. And in the first derailment of capitalism, I'll just say three minutes on the first derailment which nobody knows much about first derailment, was the 1840s and there was stuff happening in Ireland in the 1840s but it was different. It was catastrophic. The capitalism got going in the cities where I grew up, the north of England. The first factory on earth was 10 miles from where I was born in Sheffield and it's now World Heritage Centre. And that was a mill and then powered by water then about 30 years later you hit on coal and the great advantage of coal is you can bring all these factories together instead of sticking them up valleys and then you can get scale economies from the whole city as well as from the factory and that's the miracle of productivity and that takes place in the northern cities of England, bit in Scotland, places where I grew up. The most booming city in Europe in the mid 19th century was Bradford. Fastest growing most successful city in the whole of Europe. My German grandfather moved there from an impoverished German village to Bradford. And then in 1849 catastrophe struck. Collora. Because you bring people together in a city and you do nothing about it, no public policy, diseases spread, you don't get the sewage mixed up with the drinking water, Collora. The guy who was in charge of Bradford at the time was the biggest industrialist in the city, Mr Big. He was the industrial billionaire, he was the mayor, he was the local MP, he was Mr Big, tight as salt. But what he did was really interesting. This Collora sort of seared his soul and so he became the first billionaire philanthropist in history. And so he gave away his entire fortune. First he recognised his obligations to his workers. And so he built the first ever purpose built industrial town for the labour force, Salt Air, World Heritage Centre, because it was the first. And the rest of his fortune, he gave to the city of Bradford to clean it up, parks, all the rest of it. He recognised his obligations to his workforce and to his community and in return they honoured him. When he died he had a huge funeral, there was a big statue there, he's still a hero in the city. That was business recognising its obligations to community and to workers. A few miles away from Bradford, same thing, same time, 1840s. You get families facing these new anxieties. If health collapses, the average age of death in the northern cities by the 1840s had fallen to 19. On average you were dead at 19. So one pretty big anxiety, if you're poor, on an average dead at 19 is, am I going to get a funeral? Pretty mundane practical anxieties. And so what happens in the city of Bradford, the Rochdale, his families get together and say, I'll tell you what, I'll have an obligation for you to have a funeral, if you accept an obligation for me to have a funeral, call the cooperative movement. That's the global birth of the cooperative movement, the Rochdale pioneers. And the cooperative movement in Britain became the biggest funeral director in the country. A few miles away from Rochdale you get Halifax, where you're going to live, that's an anxiety. Well, I'll save, you save, and then we'll borrow to get a house on the collateral of the house. Halifax building society became the biggest bank in Britain. So the structure of these, the first year of capitalism, very practical new anxieties, death, housing, and very practical, pragmatic solutions in which both business and families recognize the need to share obligations, to accept obligations to others. Now we get, that was then, this is now. Now, the present derailment started around 1980. And it's two new social divides. And one is spatial. For 200 years until 1980, the poorer regions in countries were catching up with the richer regions. So regional differences really getting narrower and narrower. From 1980, continuously, that's gone into reverse. Poor regions are falling behind richer regions. And the really successful regions are the metropolis, the big city. Britain's at the extreme end of that, there's only one successful metropolis, there's a region really, and that's London and the Southeast. No other region in the country gets above average national per capita income. And so that, why does that happen? It's not very complicated. It's globalization, globalization, more and more markets go from being national to global. And so you've got fewer and bigger winners amongst the cities. Not only that, but periodically, a city like my own Sheffield, in which the Sheffield had a global industry, steel, which actually goes back 700 years. Chaucer has a line saying, the knife going from Sheffield. 700 year industry wiped out by globalization in the early 1980s. You all know about that. You just have forgotten it's Sheffield. The full Monty? You've seen the full Monty? That's Sheffield. That's my relatives. And it's a very poignant film, but believe me, it's not funny when your relatives are going through it. This is a human tragedy of the first order. In which a city was wiped out. So that's one divergence, the spatial divergence. The other divergence is a new class divergence. And the new class divergence is based on education. It's people with tertiary education or less. The people with tertiary education, on the back of their tertiary education, they build specialist skills, professional skills. They become fancy lawyers, fancy this, fancy accountants, you know. Fancy doesn't necessarily mean ethical, by the way, but still. And the less educated who've gone in for manual vocational skills, they're getting less valuable those skills. The cause of that divergence, the educational divergence, is the rising complexity. The price you pay for higher productivity is gradually you have to do things that are more complex. When you start capitalism, you do things that are bloody obvious, like bringing people together in a factory. It's not that obvious. It takes thousands of years before it occurs to people. But you basically, you do the obvious first, then you do the things that are a bit hard. And finally, by 1980 or so, you're really doing things that are really difficult. And that requires, because it's complex, you need tertiary education to master the skills that complexity requires. And what that complexity is actually doing is making redundant a lot of the lesser skills, a lot of the manual skills. So we got two escalators, an up escalator for the metropolitan region and the educated. And a down region for the provinces and the less educated. And of course, the two then get correlated because who's most valuable in the metropolis is the people with the tertiary education. So the people with the tertiary education go to the metropolis. They leave places like Sheffield and go to London or its over spill Oxford, right? Me. And that's great for the skilled, right? But it's basically producing this new class divergence between an educated elite in the metropolis and broken less educated provincial cities. And that is happening not just in Britain, Britain is a dramatic instance of it, but it's happening around the OECD happening in America. I live about a third of the year in provincial France. And boy, you know, we're very well accepted in provincial France, despite being British, because we're not Parisians. And so that's the the divergence. And the difference with the 1840s is that nothing's done about it. There's no more complicated to get capitalism back on the rails, healing, reversing the regional divergence or the educational division, no more complicated than it was to stop the collapse in life expectancy in the 1840s. It's obviously different. Each time capitalism derails, it does differently. But the same approach is needed. You look at the problem, you work out what's happening, you admit you're not sure what you what will work, you make some commitment that it's going to whatever you want to do, whatever it takes. Let's coin a phrase, right? A European phrase that was hugely successful, but was applied to the wrong project. It was applied to save the euro, and it should have been applied to save Europe from this massive divergence that it's been having the last 20 years. So once you've got a commitment, whatever it takes, you then experiment, you find out what works. And it's hard. There are there are two things that have to happen. One is you have to correct the you have to end up. Let's let's think what what success looks like. It looks like people in their mid 20s in a city like Sheffield saying, Is this a good place to be? That's really what success looks like. I'm glad I was born here. There's a good place to be. This is going to be my future. I gave a lecture in Stoke about a year ago, and it was very sorry, a huge audience. And what people told me was the tragedy of Stoke is that all the bright young people leave. They just don't see a future. And that's the sort of situation we've got to we've got to change. Because these once these narratives set in that a place is doomed, they and people think in narratives. This is how we understand complexity and radical uncertainty. We buy into some narratives that everybody in the group is saying. And if people are saying about Stoke and Rotherham and the north of England, it's doomed. It has a nasty tendency of being self fulfilling. Just as I just came from a meeting on migration, international migration, and one of my colleagues had been doing research in Gambia. And she's been doing surveys of the youth in Gambia. 60% of Gambian youth say we would rather get on a little boat and try and get to Europe where we estimate the chance of death is 50-50. We would rather do that than stay in Gambia because Gambia is no future. And of course, if people believe that, it has no future. So that's what success looks like is changing those narratives. So that somebody born in Sheffield, grows up in Sheffield, feels they belong to Sheffield, and when they're in the mid-20s, they say, they're a good place to be. So that's where we want to head. How do we do it? And how do we do this across Europe? This is what Europe needs to commit to. There are really two separate processes. One is, how do we turn a baby into a young person of 24 who is employable, got sort of capacities to be really productive, and the motivation to contribute to society? And so it doesn't see themselves as a victim. So that's the challenge on the human side. A chain of public policy from birth to mid-20s. I call that the social maternal chain. And we are doing that terribly, terribly. It's actually not that complicated. We sort of, if we look at the best examples everywhere, we'd come up with something very much better than what we're actually doing. I'll just skim through that passage from birth to 24. Just think of it. So the first few years, there is only one organization which is capable of raising a baby from birth to, let's say, three. By which time we know that most damage is done. And that is something called the family. In my own country, if you say word family, almost it's tantamount to being so politically incorrect. I'd lose my job. I think it's just about safe to say the word family and island, but maybe not. So families have to work. And at the moment, a lot of families don't. In a lot of Europe. They're broken, and we have a sort of not social maternalism, but a social paternalist policy in which a bossy state tries to take children off their families into fear. And there are 70,000 children taken into care in Britain. 70,000. And what they're then put into is temporary care, foster care, which of all the things that children need, temporary paid care is the last thing they need. It shouldn't be temporary and it shouldn't be paid. Just imagine. I'm a poor boy made good, so the rest of my family has moved about in the same social distance as me, both my parents left school when they were 12. So I've moved rather a long way up, but some of my other family moved equal long way in the other direction. So I adopted my cousin's family when I was one and two. And we were lucky because they'd introduced a new legal means of doing that within a family. In the whole year when we managed to take these two little kids, there were only 60 children adopted in the whole country. 70,000 in this ghetto of temporary, of transience, and 60, not 60,000, 60 got out. That's what we built with social paternalism. It is appalling. By social matter, I mean you've got to separate the family support from the family scrutiny, otherwise there can't be any trust. I think some of the women in the audience are nodding, because it's much more easily understood by women than by men. So that's zero to three, where the evidence is that if children have gone wrong by three, it's very, very hard to reverse. There's good scientific evidence now. Telemeers, does telemeers mean anything to you? The caps on DNA that erode? If they erode, the DNA erodes. And then the whole organism can't replicate itself. The organism goes right or wrong. Right? By the age of nine, a child in an unstable family, the telemeers have eroded by 40%. Is that a lot or a little? Well, if we double family income, the telemeers would be 5% better. So 40% is massive. Irreversible damage. That's what we're affecting. So that's the family agenda. Then when the child gets to three, and I'll speed up, I promise, but the system, I think, works best. I don't know about Ireland. Maybe you've got it better. Is the Ecol Matt NL in France? They're free, they're standard, they're state run. Everybody goes, because everybody goes, the children of the poor go. A lot of countries have very fancy systems which are targeted. As soon as you do targeting, you stigmatize or you game. Britain's got a terrible system, he pays private companies to get children of the poor into these preschool things. And of course, the companies then game it by getting the children who are just on one side of the margin over to just the other side of the margin, because that's cheap to do. And then you just abandon the ones that actually need to get over the margin. So that gets us to about five or six, they call Matt NL, brilliant. Then from about six to the end of schooling, to my mind, the world best, or at least the European best, is Finland. And the Finns have done it by a system which basically says trust teachers and give as much resource as possible to teachers, because teachers have all the tacit knowledge. They know which child could be learning what, when. My own country has done exactly the opposite, right? Paternalism gone mad, right? Monitor teachers incentivize them with rewards tied to monitored performance and then keep pulling the child up by the roots every few weeks and testing. The Finns don't test their children until the very end when it comes to the PISA scores. And then the Finnish children up there, the British children down there. So whatever we're doing isn't working, but whatever the Finns are doing is working. So we can learn across Europe from that. And then post school, the vital thing is good vocational training. And we know what good vocational training looks like. It looks like Switzerland. The Swiss, the vital thing about vocational training is the training has to be integral to firms. Firms have to work with the educational authorities to say we need this skill here now. And it keeps changing. It's a kaleidoscope of what skills are needed here now by me, you know. And so the only way you get that task in knowledge is by getting the firms in the kitchen of it all. Switzerland does that. It's wildly expensive. It's three and four year, very prestigious courses. 60% of Swiss children choose not to go to university. Switzerland has a top 10 in the world university zero. But 60% of Swiss children choose to take the vocational route. You can become chief executive of the Swiss bank by the vocational route. Perfectly accepted. Credentials, as prestigious as a degree, paid, paid, wildly expensive, who pays half the cost they're paid for by firms. They've got a lot of skin in that game and they make very sure that the people who come out are actually employable. So that's how to do it. That produces the 24 year old that's capable of being productive. There's a whole separate agenda which I won't talk about. We want that child to be motivated to contribute. Not popping out at the end of the production line saying I demand my rights, but saying I'm here to meet my obligations. We've overstressed rights and understressed obligations. There are no rights without obligations. Rights are the nice bit they're like public spending. Obligations are like taxation. And we've inadvertently got a system which is all rights and no obligations. More properly, all the obligations have floated up to the state, whereas we need a structure in which obligations are widely distributed. As they were in the 1840s, business accepting obligations, families accepting obligations, as well as the state. Finally, turn to that second sweep. We've got the productive 24 year old. That 24 year old needs a job. Not a job in the metropolis, but a job where they live. And that means a humane form of globalization brings productivity to people where they are rather than saying swim to productivity. How do you do that? We actually know pretty well what it looks like. And it's not that complicated. The only town in Britain that's got it is Edinburgh. And it's a fluke. But it's a cocktail of four things that then work together. One is you need to keep finance local. All banking and finance starts local because that's where the knowledge is. Finance is full of tacit knowledge. Is the manager of the company drunk? He's not going to say I'm drunk. You've got to go and look, is he drunk? And you'll get the gossip if you go and drink in the pub. And so on and so forth. Tacit knowledge. So finance needs to be local. Germany did that. Britain didn't. Germany's kept finance local. Britain centralised it all at the end of the 19th century. And so British banks can only use codifiable knowledge. The local bank manager is controlled by the centre. And all he can do is fill in the form. Tick, tick, tick. And it doesn't include a question. Do you suspect the manager's drunk? So you've massive loss of tacit knowledge in the British system. So you need to keep finance local. If you have finance local, and it seems actually only if you have finance local, you tend to get a locally organised business community. You desperately need locally organised business. Then the third bit is you need an empowered local government. Decentralise political power of action to local government. The fourth thing you need is a local university. Because the local university is going to do two things. It's going to train the labour and it's going to keep the local firms at the cutting edge of what's going on in their sector. The one place where that's happened in Britain is Edinburgh. It's a fluke. Because Scotland has a separate legal system, the Scottish finance industry stayed local based in Edinburgh. Therefore, the Scottish business community organised nationally, but it's had quartered in Edinburgh, not London, obviously. Because of Scottish nationalism and devolution, Edinburgh has a lot of political authority. And finally, it's got two good universities. Ten years ago, those four different entities got together, collaborated, and they said, what's the future? What are young kids in Edinburgh going to be doing in 10, 20 years? What's the future of jobs in Edinburgh? And they decided they'd better attract a sector of the future. Like you and me, they're not very sure what the sector of the future is, but they took a guess on IT. They thought, let's try and promote IT in Edinburgh. Not a stupid thing to do. Fairly conventional idea, but not wild. At the time, they then did an inventory of how many IT firms have we actually got in Edinburgh? There are two. So all these four entities, finance, local business community, local government, local universities, all together are saying, we're going to attract IT. That's our strategy. I was there in January. They've now got 480 firms, IT firms. It's the biggest cluster in Europe. That's what success looks like, and that's how to get it. So I'm out of time, but Europe has had around Europe these two divergences that have just continued for 40 years with nothing done about them. We've instead followed a very elitist agenda set by the Metropolitan Guild, which is all flags and European anthems and euros and all that jazz, which has actually presided over a vicious era of divergence, both within and between countries. That's what should be reversed. It can be reversed, but it requires a very different agenda. We've faced mutinies around Europe and indeed around the OECD because those very legitimate concerns of the people on the down escalator haven't been addressed. The new Europe needs to wake up for that. Thanks. Thank you, Paul. So lots of ground cover there, and I'm sure there'll be plenty of questions on different aspects of that. If I could ask people just to identify themselves when putting a question, could you just wait for the microphone? How do we get from where the UK, and essentially you talk about the UK, we're maybe a little different here, but how do we get from where we are in the UK to where you would like to be? How do we, looking at the political parties, as they exist or are disintegrating at the moment, how does one begin to make that change? Yeah, I don't want to be specific about the UK. It's too depressing. But actually, the same thing is playing out across Europe. And the honest answer is that the political dynamics are not automatically favourable because with the loss of trust in the mainstream parties, because they've neglected this for so long, because they've been captured by sort of metropolitan elite fantasies rather than the pragmatism that addresses the real practical anxieties, in that vacuum of good public policy, two groups emerge. And one is the ideologues. And the ideologues always have the same thing. Here's my little red book, which has all the answers for utopia. And it's either radical Marxism, fascism, or some religious ideologies. They're all ideologies. They've all been tried over the last 200 years around the place. They always fail because they're fundamentally flawed. There is no utopia. There is no rulebook for how to get to utopia. There is just radical uncertainty where, periodically, the system derails. And then we have to pragmatically study the local context and the problems are different each time. So we need that dose of intelligent pragmatism. And what we've got, one hand the ideologues and the other hand the populists. And the populists often are good at tapping in to the genuine anxieties. They just don't have a clue of what to do about them. But because they talk about the anxieties, the right things, they sound to know what they're talking about. So how do you tackle that? We have to shift the mainstream parties back on to a serious agenda of admitting, first of all, they have to admit what the problems are and that they neglected them. There has to be a mayor or a copper. We messed up. We now understood that. We are going to try and do something about it. It's perfectly okay then to say we don't know what to do. Actually, as I've sketched, we've got some pretty reasonable ideas about what to do. But even saying we don't know what to do is okay as long as you say, but we commit to doing it. We commit to achieving it. And if we don't know what to do, the answer is not despair. It's experiment, evaluate, rapid social learning. We need a phase of rapid social learning. And instead, we've got a phase of dogmatism. Idiot ideas from the ideologues, idiot ideas from the populace. We have to show that those idiot ideas are doomed, which is not hard. But we have to talk the same anxieties as the populace and the ideologues, but come up with something that is more credible. That is not that hard, actually. Just to follow up on that, do you attribute populism, what are generally called, to purely economic factors or other things beyond that? Oh, no, it's both, isn't it? Because quite a lot of the mutiny is about a sense of disdain from the metropolitan elite of everybody else. I mean, they've actually added in, literally added insult to injury. So here you've got the skilled metropolitan's doing great. Thank you very much. We've never had it so good. And the less skilled provincials on a down escalator and what the skilled metropolitan's have done is peeled off from shared identity. Just at the time when always the less successful need, the more successful, to say, yeah, we recognize these reciprocal obligations, you're going the down escalator, we will help you. And at the moment, what are the metropolitan elite saying? They're saying, there's nothing to do with you. I don't know if any of you read the Financial Times, but the best political commentator in Britain is Janan Ganesh. But Janan Ganesh is a perfect spokesman for the metropolitan elite. So here's his description of provincial Britain. He says, it's like being shackled to a corpse. You hear the deep empathy, shared sense of mission to help. No, I mean, this is guy. If he'd said this about one of the metropolitan elites favor little victim groups, he'd been out of a job in two days. He'd have been hounded out, shamed. But he can say, oh, it's shackled to a corpse. What is provincial Britain a corpse? Which we'd rather not be shackled to. That is shaming. But that actually represents the sentiment of this detached metropolitan skilled. And it is an ethical disgrace that has to be shamed. Ronan Tynan. I must say I found your presentation extremely provocative and thought-provoking. I can understand Ganesh's point though, because if you're familiar with London, I love London and in fact I live there. I was campaigned vigorously for Maine as well. But I remember somebody I knew well had to do a little job in Stoke. You know, a filming job, I'm a filmmaker. And she said to me, it was like a third world country. And when she said, where's the nearest Marx and Spencer's, they all laughed at her. It doesn't even have Marx and Sparks. So the inequality in Britain is truly appalling. But I do agree with you. But I do think as well it's ideological. And in the sense that we're kind of evading a big issue here, you touched on it with rights and obligations. Now I go to Seattle a lot in the United States. And it's very interesting that there's a company now which is huge in Seattle, that's Amazon. And the impact of the big companies on Seattle, because it's exploding, growth, et cetera, they tried to put a head tax on the employees of all the big companies, above $500. And Amazon, being a potentially huge employer, investing in this giant complex about a million square feet, they said, uh-uh, we're leaving, this denial of it. And of course, how can you have public service if you won't pay tax? Then recently, somebody challenged me in a debate. I was arguing, of course I agree about it. Ron, can we move to the question? Oh yeah, well, it gets to the question really. We're talking here about a neoliberal economic model where you have actually turned the community into a business, basically. Not even an economy, it's a business. Every citizen now is a cost center and must be highly competitive to enable that economy to work. And you identified what happens. The north of England is dead, as Gadaj said, and the proof is the young people leave because it doesn't have the universities. Now my point is this, and this is the question, Dan. How can you possibly achieve what you're saying without a very substantial increase in government expenditure? It is necessary. But how can we achieve that without an increase in taxation? Okay, that's our question. Okay, so the distinctive feature of the future of capitalism, the book, is that half the book's solutions, right? Including where do we get the taxation? And the answer is, you tax the metropolis, and you tax it out. There's a concept called rents of agglomeration, and you tax them. These guys in central London with their skills, they think I deserve it. And what we show, in glorious mathematics, not in the book, there's a paper that I've written with Tony Venables, who's one of the top two or three economic geographies in the world. We show in all the glorious theorems of economics, right? They don't deserve it, right? What's making them productive is the whole, not themselves. You put them in Rotherham, they're not going to be very productive, these geniuses. They're only productive because they're all together, and why are they all together in London? Because years, centuries of investment by the whole nation. So the whole nation needs to benefit from that, right? So that's where you get the tax. And then, as you say, Amazon is part of the ethical disgrace of a modern business. So a lot of my book, the first five chapters of all ethics, and one is about ethical business, right? And the companion book by my friend and colleague, Colin Mayer, called Prosperity, which is all about ethical business, right? And we've just been completed a British Academy lecture tour around Britain, which is a double act, right? And our key concept is that you have to move to a society in which every entity is morally load-bearing. Business has to be morally load-bearing. Families have to be morally load-bearing. Local government has to be morally load-bearing. Civil society, you need a system in which morally responsibility is widely distributed across the society, right? What Amazon is exemplifying is the Silicon Valley West Coast mentality. I was just in Stanford last month, and I was just shocked beyond the view. The libertarian agenda is we don't need government, right? I just read today's news is that Facebook is going to set up its own cryptocurrency. They're very keen on Bitcoin. They think all these governments around the world with these wretched central bankers, Patrick, right? You're all the problem. Mark will solve it all with his face. Private global monopoly does not sound to me like a terribly good idea, right? And especially a private global monopoly that doesn't even recognize any ethical responsibilities to community or workforce, right? So we have to shame business. Now, fortunately, business is actually surprisingly willing to move back to morality. They've woken up to the sense that profit cannot be the purpose of business. If you don't believe me, Larry Fink, who controls something like four trillion dollars, his January letter, which is a big event, said every business has to have a clear purpose which can't be profit, right? Then you get Jamie Diamond, the head of the biggest bank in the world, just writing his 50-page letter, just like a miniature thesis, you know, on exactly the same proposition. Then Davos, the head of Davos, Klaus Schwab, wrote to me and said, the future of capitalism is the best book I've read for years, and it's exactly what Davos now stands for. Will you come and speak at Davos? So great, you know. And of course, there are rogues, right? There are hundreds of rogues. Goldman Sachs, bless it, is a rogue. Paul, could I just ask on the tax thing? Do you have to cage higher corporation tax or higher tax on very wealthy individuals, or wealth tax? Okay, so it's a tax on place. It's partly a tax on the people who own land and property in the metropolis, because the huge gains from productivity in the metropolis will accrue to two groups. One is the people who own land and property in the metropolis, right? For example, the very... just latest evidence on By-to-let in London. By-to-let, a shameful tax procedure which encouraged, you know, people like me, that is to say, they're the elderly affluent, to buy a home as an asset in London and rent it to the young. So there's been a 10% shift in the British housing stock over the last few years from young people who would have owned to people like me. I happen to say I'm not guilty, right? But the latest evidence is of all the By-to-letters in London that were sold in 2018. And the average thing... the average By-to-letter who sold in 2018 had held the property for 10 years and made a capital appreciation of a quarter of a million pounds over and above the rent they got, right? And that capital appreciation is very likely taxed. I mean, this is just scandalous, right? So that's where the tax is coming from. And finally, the layer... so it's the people who own the land and the property, but also these very skilled people who think they deserve it all, they deserve some of it, but they should pay higher tax rates for the high-income people in London than a high-income person in Rotherham. Because the high-income person in Rotherham, if they manage to get a high income, it's because they're bloody clever, right? Whereas any high-skilled person can do pretty well in London because you're swept up by the tide of metropolitan productivity. So that's the tax boom. And getting back to ethical purpose in business, the tide is with us, the tide is with us, very much so. And one of the things that's forcing companies for ethical purpose, which is very good news, is that millennials get this. People my age don't, right? I'm actually very proud that the future of capitalism is condemned by only two groups. One is the political far-right, so I'm denounced. Dominic Lawson said, if this is the future of capitalism, it hasn't got one. Collier is worse than Corbyn. And the other is the far-left, Plessis, the Corbynites, who say, no, no, he wants to save capitalism. No, no, no, we've got to destroy it. So I'm quite proud of that. Okay, we've got a good few questions. So can I take two, the gentleman there? And if you could just hand to the gentleman. I will indeed, yeah. Thank you. It is. Jerry Clark with Links to China, business. You've raised a huge number of points. The idea and the emphasis you put on the family and education. The topic is, of course, facing the European anxieties and trying to get back the trust of the electorate. There are two countries, which I'm very familiar with, Ireland and China. Both have put huge emphasis on education and the family. In China, of course, they call it not capitalism or communism, they call it a socialist market economy. I'd like to hear your comments on the topic. We've now lost a lot of trust in the politicians because the populists have done what you've just said. They can tap into the anxieties of the mob, the people. Looking at the world today, there are two countries, Ireland and China, which have huge similarities and indeed large dissimilarities where democracy in China is not. But both countries seem to be managing the anxieties in the world today. I'd like your comments on that. Clearly, much of your speech is the fact there's no identity between the people on the up escalator and the ones on the down escalator. I always thought that, for example, when Macron was elected president of France, he was the first French president who, going for his people who elected him, didn't play Le Marseillais, he played Old de Joy. Generally speaking, I think French people tend to be French and also be shock to two people. Is that not crucial? The point is that these people in London and those people in Paris want to break the chain. They have no identity with the people in their own countries. They're not a mob, by the way. I agree with that. Macron did break the system and offered hope because what he established was a bottom-up new party en marche. And a lot of people around France joined it. I live in France for a third of the year. I see this. So I thought Macron had got it pretty right because he said, I'm not a nationalist, I'm a patriot. And it's quite a good distinction of language. By nationalist, he meant you can't... Le Pen is not trying to unite the nation. She's trying to divide the nation. She's saying, where the nation and you're not. So what we need is an inclusive sense of nation which Macron seemed to be offering. And as you say, since becoming president instead of using en marche as a bottom-up system he very rapidly turned into Jupiter. And that is a very big political mistake first and foremost in France which is hard to manage anyway. I mean the idea that Jupiter could run France could only be held by somebody who was seriously detached from politics, which of course he was. And I work with one of Macron's close advisors and he's a very clever young chap just like Macron. So I said, how did you get your position? He said, oh, we were together in the same class at Sciences Paul and then in the same class as en marche. So the trouble is there's a very little guy of clones who are all really good but totally detached from their country. And as you say, the starting point is the successful, the elite has to embrace shared identity with other people. Now it doesn't have to be an oppositional identity to other nations. And the genius of Europe at its best is to say, actually there's a lot of stuff that we better do in common because by working together we can make things better for all of us. So there's a huge agenda that Europe can do together that matters. But we've sort of got diverted into things that are either actively inadvertently causing divergence or it's just sort of peripheral to most people's concerns. We haven't been addressing these very big anxieties that have been building up the last 40 years and that's the failure. And the elite is so detached it doesn't even understand the anxieties. The little town where I live in France is one of the epicentres of the Gégen mutiny. And so Macron has visited us twice in the last three months to see what's going on. But anybody could tell him. It's not the pent-territory, incidentally. These people are not quasi-fascists, not at all. They're just very angry people who feel neglected. Okay, I apologize to many people who do still want to come in. We just have time for one more, just one minute, really quick. So Patrick Powals from University College Dublin. So the dirty word family. So this word does not appear in the UN 2030 agenda. And I think it has just more a comment than a question. I mean, if you're dealing with, if you focus on the individual, let's say HIV AIDS, and all your policies are just for the individual, we all know that if we have kids with disability or older people or people with long-term illnesses, this is a big family and extended family problem. If you don't deal with it that way, it'll have people staying home from work, people staying home from school, you know, coping strategies. All assets will be depleted. So smart public policy cannot just have this strict individual focus. It has to be smarter than that. And to marry the state would say a structure like a family to really be effective. So I think just to emphasize your comment there is actually... In 30 seconds and 8, do you want to? I think that is absolutely right. The curse of... And it's part of the whole loss of religion because religion has always sort of embraced the family. But whether you want secular or not, what you have to embrace is the move to obligations to others rather than starting from individual rights. And there are no individual rights unless there are obligations to others. The more general concept is obligations. So let me close with an example. Partly it's an analogy with money. So a budget, we all know that a budget works as long as the revenues are broadly matched the expenditures. The equivalent of the expenditures are the rights and the equivalent of the revenues, the bit nobody likes to do, but we know is necessary, is the obligations. So we've somehow moved away... In budgets we now understand it. Nobody who stands up and says, I want to print money regardless is going to get elected. But in moral space, all the discussion is about... Let's have a right to this, a right to that. And none of the discussion is about obligations. And the rights are all about individuals. So this move from obligations to my community to my workplace, to my family, the move from those obligations to individual rights has had devastating effect. Fortunately, there is now a pushback. There is a pushback. Thank you. And thank you for a thought-provoking and wide-ranging presentation. And if we could show our appreciation in the usual way. Thank you.