 This is Rob Johnson, President of the Institute for New Economic Thinking, back here for a third panel sponsored by INET in conjunction with Tito Fiori and a wonderful Trento Economic Festival. As we say every day, we wish we were there in person, but that's just not how the cards were dealt this year. As I've mentioned in the previous two sessions, INET has been building a commission on global economic transformation in these very difficult times. We had Mark Carney and Bill Janeway two days ago and yesterday, Geati Ghosh, Rohit Madora, and Joseph Stiglitz. Today, I have Michael Spence, the co-chair along with Joseph Stiglitz, two Nobel laureates to talk about other elements of where our commission is focused on, which are the major challenges to transformation and disruption. I would say that there is a context or a stressful nature of unforeseen change that ignites fear, makes the temptation to authoritarian politics much greater than it might otherwise be. And at the same time, there's vast potential. The epigraph at the beginning of the movie on Netflix, Social Dilemma about the big internet platforms and Silicon Valley said, nothing vast enters the life of mortals without a curse. That is a quote from Sophocles. But I would also say that with that curse, you can't smother the vast potentials that are on the horizon. As Diana Ross from my home city of Detroit sings, do you know where you're going to? Do you like the things that life is showing you? Do you know? Well, we can't know, but the best thing we can do is bring somebody who is a deep diver whether it's relationship between technology and economy and labor or technology and new forms of commerce or US-China relationship. I don't know any better cleanup hitter than Michael Spence. And the only thing I'll tell our audience, I had an unintended export to Italy this year because between Mike Spence and Mark Carney, I've got two Ivy League graduate former hockey players. One is a goalie at Princeton, or excuse me, a goalie at Harvard, Mark Carney and Mike played hockey with Princeton University. So I don't know what the relationship, I grew up in Detroit and I love hockey, but I don't know what the relationship is between what we've exported and that sport. But I do know Mike will deliver a tremendous export today. And Mike, thanks for joining me. It's great to be with you, Rob. So Mike, when we've talked in preparation for this, we talked a lot about the, what you might call precedents of past transformations and how this one, which just appears all around us. I mean, in recent years, financialization, the sprospective climate, concerns about migration, globalization and whether the nation-state can manage its affairs any longer. But the realm of technology, you've been working with the Lujan Academy. I've had the good fortune of doing a podcast with their leader Chen Lung recently about a report that you were involved in right. But there are many aspects, biomedical science, gene editing, the digital big data kind of issues, the issues of, which might call, relative power of factors of production. And you see them all, solar, DNA sequencing, all of these things. How do they relate to the past? And what kind of lessons can we draw from the past about all these things that are right on the horizon right now, and both exciting and a little bit scary? Well, I guess, I would say, Rob, we live in a period where so many things are changing that I think virtually all of us at times feel somewhat bewildered by it. And we certainly live in a period in which, making accurate forecasts about where we're going, especially long-term ones, I think are really unrealistically out of reach for us. And that is anxiety producing for everybody because there are some significant challenges in downside risks. I would say, sort of second point is, I was struck by looking recently at the power of the tools that are being made available by science and technology. So I looked at solar, which 10 years ago was basically a nice idea, but relatively useless from a cost point of view in dealing with climate change. And now it's at least competitive and by some standards better than the fossil fuel alternatives and other alternatives like nuclear. I mean, the only thing that really beats it is sort of hydropower, and that is important, but has limited uses. And then I looked at, you know, 50 years ago, roughly, the structure of DNA was discovered and about 30 or 25 years ago, we sequenced the first genome, probably cost a million dollars to get that done. And now the costs are so low that it's become a very powerful tool in biomedical science. And similar things are occurring on the digital side. So, you know, what I think, you know, what I'm trying to say is when you look into the future, sometimes you can see these things coming, but we're at a point where they're actually with us, right? We, I picked biomedical science as an example, even though we're formally gonna spend most of our time on digital because this is very, very powerful stuff. And in particular, gene editing is an excellent example. The two women who received the Nobel Prize in Chemistry this past year in 2020, received the award for doing the foundational work that has enabled us to do gene editing. Gene editing is a classic example of a technology that has enormous potential with respect to something that everybody cares about deeply, which is human health. And on the other hand, it has potential misuses that are genuinely terrifying as well. So, we've got very powerful tools that are available, that are gonna change the opportunity set for our lives. You know, I recently wrote something with James Meneca that said, we think at least in the digital area, that the tools are now accessible enough and powerful enough and the willingness to adopt and use them, partly as a result of the pandemic, has been accelerated so much that we may have another burst of productivity and productivity enabled growth as well. So that's kind of the plus side. And I think, you know, there are lots of other dimensions of it that we'll explore. But the main point is with anything this powerful that's changing our economies, our societies, the way we interact with each other, governance and so on, comes huge opportunity and challenge at the same time. They're all double-edged swords. Yeah, people I know who are studying Africa are of two minds. One is the ability to integrate a market and create opportunity where none existed before with these new digital platforms. Some concerned about how to get the capital raise to install the digital platforms, but the potential is on the horizon. Others are very concerned about how essentially replacing human beings will exacerbate inequality, weakening labor relative to the owners of these platforms in whatever context, but particularly in places like Africa where the income and wealth inequality is quite extreme. So there seems to be, how would I say, visions of dread and visions of progress. How would I say on the same screen at the same time in almost all of these places? And the question becomes, how do we manage it as human beings? How do we govern? Well, that's a hugely challenging question. So for the festival this year, it's about the return of the state. So we certainly don't take this on by adopting a hands-off approach, so we just simply can't. We're gonna have to sort of step up to it and make value-based collective choices that try to carry us through these things that mitigate the downside risks and amplify the opportunities. But let me say one more thing about digital. So you asked about the past. We had the Industrial Revolution that began in Britain, spread to continental Europe, spread around the world eventually, but really didn't make it to the developing countries until the post-war period. Industrial Revolution had lots of mechanization, right? We would probably use the term automation now, but it isn't quite right because these machines weren't autonomous. They were in control of human beings. They augmented human beings and human beings' jobs changed enormously. I think the machines replaced human muscle. The digital technologies, in particular the programmable computer and networks and all the other things that we don't have to list here, are basically entering the world of information, coordination, decision-making, transactions that up till the digital era were essentially, and there were a few exceptions, entirely in the hands of human beings. If you put that in sort of popular jargon, at least the way we use it in the United States, we are experiencing both automation and augmentation in the world of white-collar work, really for the first time. And maybe the effects there are bigger. They're not confined to that. I mean, we have now, with artificial intelligence and sensors, we have robots that really are relatively autonomous and do replace human beings in sort of manufacturing logistics and so on. But we've got tons of jobs, even without the most advanced digital sort of, even machine learning technology, tons of jobs being eliminated from economies in the white-collar area, because the machines do them faster, better than sometimes with accuracy as well. So I think that puts us on a trajectory that's really different than anything that we've experienced before. So if we look at the Industrial Revolution, we say jobs change, but they didn't disappear. Machines took control of the jobs, acquired new skills, and so on. And maybe that'll happen again. We can't reject that hypothesis. But the point is that we now have machines doing something that humans uniquely did up to about 50 years ago. So I guess we got to wait and see whether they'll replace poets with imagination, but other than that. Highly unlikely. Yes. Highly unlikely. But there are, how would I say, tremendous learning curves from automated machines. And even just in these last few years, you've seen them beat world champions at chess and things like that. So there clearly are dimensions of mind that are being challenged. One of the things I find fascinating is the difference between a technology being introduced to create what couldn't be done before and a technology being introduced to perhaps make more efficient, less costly, something that was done before. You've done a lot of work in China. The growth of mobile financial platforms and fintech with the U.S. banking and branches and so forth, I can see that displacement factor being very large in relation to the, how do I say, creating new opportunities. They may cost less or what have you. But in China, I would imagine it's such a big country that you've probably seen both. Oh, absolutely. Yeah. Let me take the e-commerce side of that first. These are based on studies that have been done by the Luan Academy, which is located in Hangzhou and sponsored by Jack Ma and has access to the Alibaba and financial Alipay data, which is an enormous collection of data given the progress that the Chinese have made in that aspect of the digital economy. And what those studies show is that in e-commerce, you see both patterns. You see e-commerce displacing retail where retail was well-developed, to some extent, as well as augmenting them. So you see both. And where would that be? It'd be in places like Shanghai where retail was well-developed before the e-commerce really took off. And then you look at third and fourth tier cities, and they do in the studies, and agricultural areas, particularly ones that are relatively remote. And the e-commerce is providing a set of opportunities, options and services that weren't there before. It's not displacing anything. Now, eventually, they'll look similar, right? The offline retail will develop. It will be coordinated with the online retail or so-called omni-channel. So it's not a permanent condition, but in terms of inclusive growth patterns, you see something pretty impressive. Half the entrepreneurs on Taobao, roughly 5 million are women of the 10 million, and so on. So you see these patterns on the big data side, you see something quite impressive, although they've got to figure out how to regulate it. And that is with very large amounts of data and very large numbers of people using the mobile payment system, they have data on people who are otherwise relatively anonymous to the financial system, meaning they don't have collateral, they can't really borrow, it's too expensive in the traditional channels for banks to kind of deal with them. But the machine learning algorithms can do a pretty good job of credit scoring and pricing credit. And so that's starting to develop very rapidly. There's an entity called My Bank, and it's an offshoot of this process, of infant financial and some other entities. And they're lending to individuals, to households and to small businesses with five or fewer employees that were more or less cut off from credit or the credit they could access was highly inefficiently and sort of extractively provided. It was kind of almost loan sharks, I guess is the way I would say it. So once again, you see a sort of on the upside potential, you see an inclusive potential growth pattern emerging from these things, and you see it in other areas. I mean, I don't want to be long winded, but there's lots of applications now of things like image recognition in healthcare that are providing primary care diagnostic opportunities with respect to things like skin cancer or diabetic retinopathy that were essentially unavailable to very large fractions of the world's population because they don't live near ophthalmologists or dermatologists. And I think sometimes when we get sort of smitten with all the challenges that we face and they're real for sure, are we gonna have enough jobs as the income distribution gonna be okay? Do we have any reasonable way of dealing with cybersecurity? There may be a tendency to forget these huge upside opportunities as well. Yeah. Well, you mentioned the Lujan Academy. I know you were part of a report that was released in early February called Data Calculus in the Digital Era, number of both Asian and Western economists. I know Eric Maskin, Chris Pissarides, Ben Holmstrom, yourself and others were there and I had the good fortune of making a podcast with Chen Long about this report. And it seems to me that there are a number of, which I call dilemmas embedded in this. The big data can allow, I was involved in a conversation years ago with the Federal Reserve about taking data, kept anonymous and aggregated, but by county, by state, by region, by congressional district, the Federal Reserve could see in 72 hours what was happening in the business cycle rather than waiting six weeks for the next employment report. And so the, which you might call the duration of being off course was diminished greatly. Oh yeah. Yeah. Oh, there's no question. So there's a lot of potential improvement, a lot of ways in which we can serve society better, but then there's also this angst that's related to surveillance and related to, how would I say, I can't remember the adage, but something like in some of these mobile platforms, you are the product. In other words, you get a free service for being the product. And then the question comes as you and I've talked about many instances, if you have economic platforms that also give off big data, which creates opportunity for surveillance, how can places like the United States and China collaborate when hackers are so good at penetrating systems and at hiding their identity? How could the United States and China make an agreement to work together but maintain the faith with that both sides are complying and playing in good faith when hackers from everywhere can pretend they're either Americans attacking the Chinese system or the Chinese attacking the American system? Yeah. How do we overcome that? How do we overcome things like ransomware? Is this where we need to evolve? We might call as a new dimension what these technologies have revealed for the next step. Yeah. I mean, it's ironic that this comes up in the context of a pandemic where the ability of the economy to function increasingly on a digital foundation has made economies resilient in a way that they just simply wouldn't have been before or to put it differently, the economies would have had to continue function at enormous cost in terms of health because you just can't shut them down. You can partly shut them down if we did with significant costs, both to the economy and to lots of individuals and we have to fix that. But you're right. I mean, so I guess I would phrase it's not just the platform. So the entire economy is being built on digital foundations pretty much everywhere and this creates vulnerabilities that we haven't addressed and in particular, if you are operating on a digital platform and it's vulnerable in a whole variety of ways to attack ransomware being an example, which is an attack on data, right? Or the accessibility of data. And but in principle, you could have attack the destroys data. It makes it very difficult to kind of get the system up and running. And so one of the puzzles is, you know, this is not a new idea, although it gets more serious as the extent of the digital underpinnings of the economy continue to increase. But the question is what are we doing about it? I think given the subject of the festival this year, we have, you know, excessively weak thus far activity in regulatory activity with respect to sort of, you know, security, digital security, which isn't just international, by the way. I mean, you can attack things from within. As you pointed out, you can attack them from pretty much anywhere if you're good enough. This is a role of the state. You know, I'm quite sure private sector incentives are not sufficiently strong to create the kinds of security that we need, in part because there's huge extra salaries, you know. I mean, we just had a pipeline taken down in the United States, which caused all kinds of problems. That was a ransomware attack. The latest one was, you know, a supplier of beef. I mean, you might say, well, who cares? But I mean, you know, the next one could be the electric grid in the Northeast or, you know, in Germany or something like that. So I think, you know, this is both domestically and internationally extremely high priority that hasn't been addressed so far. Now, when it gets addressed, you know, the question is, you know, are there defense mechanisms? You know, there's offense and defense. Who's gonna win? We don't, at least I don't know the answer to that. Maybe the experts do, but if they do, they haven't made it very clear. But in the meantime, I think we just have, you know, inattention to the problem. I mean, let me give one final example. The internet of things has been used to a denial of service attacks. What are they? That basically, you bombard a website that's, you know, used at high volume with so much volume that you bring it down that it can't function. This has happened to Facebook and a number of other mega platforms. But you essentially, you create fake users of the internet and they all address the same servers at the same time. Now maybe cloud computing makes this a little easier to withstand, I don't know. It certainly helps solve the peak load problem, but the internet of things consists largely up until now of things that unlike computers and phones, don't have really any security built into them. So they're very easy to hack and use in denial of service attacks. What we need, of course, is regulation that says you don't get the cell, you know, video cameras, little things that you use in your refrigerator and whatnot that don't have any security built in them. It's just an example. So if we get that problem addressed properly, then I think there is an important agenda, international agenda to try to deal with the same set of issues, but on a kind of cross-border basis for the reason you mentioned. You know, the hackers can fake where it's coming from. And I think, you know, people talk about the new word that's so widely used is resilience. And I'm tempted to ask our subcommittee chair on climate transformation, Dara Turner, how much energy do these digital platforms consume? And if we're gonna make, I don't know, semiconductor technology evolve, do they have to be retooled so as not to have the adverse side effects vis-a-vis energy consumption? And I'm also concerned in the realm of resilience about whether this semiconductor technology where people say that, and you've said it yourself to me, that the cutting edge is now in Taiwan. How does that play into U.S.-China relations? Well, yeah, so the cutting edge, I mean, so what's happening as I understand it in the semiconductor world is that they're trying to make the distances between the circuits smaller and smaller. And when they're able to do that, which is very hard to do, when they're able to do that, it reduces, increases the speed of the semiconductors in doing whatever they're supposed to do and it reduces the energy consumption. So the scale keeps coming down, but my understanding is that some of the smallest scales like for nano, whatever they are, are being produced mainly in Taiwan by TSMC. And I've also been told a little, I won't report this as authoritative, that those scales make a huge difference in the energy consumption, which is enormous of the big data centers, the big server centers that run the cloud computing systems that eventually we're all gonna end up using. So in all kinds of ways, Taiwan has become a kind of very strategic property in the digital world. It's also quite obviously, by many accounts of the experts in international relations, one of the most dangerous places with respect to China and the US because China claims it as part of China and it may get fed up with the sort of long game of waiting or I see that the winds are blowing against them. And if they decide to aggressively address that problem from the point of view of taking over Taiwan, there'll be all kinds of trouble. So who knows whether semiconductors are an incentive, but they're important. The big data center, this is creeping up on us. But big data centers and things like Bitcoin, which are very, very computational and network intensive activities, are major consumers of energy going forward. So part of the climate change agenda is minimizing that, which means further progress in the semiconductor area. And when you look at, how nice, one of the things that we've studied in the Global Commission is the scenarios that places like the International Office of Migration present that essentially 55 years from now, there'll be more than 5 billion people in Africa. You're very knowledgeable about development. You ran the growth commission at the World Bank. But at some level, can past be prologue when in underdeveloped countries in the global South in equatorial regions, carbon burning and rise in temperature can destroy subsistence farming, create a form, a shock that's a frame of, how do you say, a contributor to social unrest. At the same time, we don't have to worry about at the same time, we don't have the East Asian model of development anymore. Global supply chains, machine learning and automation. There's, how would I say, we don't have the playbook for development with a growing population that will lose at least some significant proportion of its subsistence farming. But I know from our conversations, you've been quite hopeful about some of what digital can do for Africa. Share with us how you see an unprecedented development strategy that probably involves solar and involves digital. Yeah, no, on the, on the, yeah, okay, so, I guess the starting point is, you know, many African countries have made significant progress. There were setbacks, but there are setbacks everywhere. When you look carefully, you can see that in Latin America now, where, you know, we get forward progress, but, you know, then some real challenges come up. Second, and you know, given post-war period, Africa has kind of fallen behind in many dimensions, on average. It's an unusually configured continent because they're more landlocked countries. And there's a lot of natural resource wealth, which is an asset, but it's difficult to manage. And if managed poorly, it leads to conflict and dysfunction rather than enhanced ability to invest and grow. You know, right now, you and I have talked about this. There's lots of investment opportunities in Africa, but the risk premium are pretty high. And so we have, again, a role for government and international institutions to try to sort of overcome this. And a good example is the one you just mentioned, which is that there's any continent that ought to be sort of planning in the future to run on a substantial chunk of electricity generation with solar, that would be Africa. It spans the equator and so on. And, but right now, the progress on that front is at least a question mark because of the investment incentive costs of capital, risk premium and other things that need to be addressed to sort of overcome that. And in the meanwhile, I think the experts in climate change have said clearly that some parts of the world are gonna be adversely affected more than others. And that some of the sub-Saharan countries in Africa to the extent climate change takes hold and continues to be an expanding problem, then we can expect real trouble there. And that raises the migration issue and so on. I mean, on the digital side, I would say the bad news is that a good development model, it does two things. One, it leverages the global economy's technology and demand and allows countries to specialize on the tradable side and sort of bring people in to the sort of more modern sort of manufacturing urban sector of the growing urban sector of the economy. And that kind of jump starts the growth process. And the second thing is it's important if this is gonna really work that those be powerful employment engine. So the Asian development model had all of the above, right? It starts with textiles and apparel and then you assemble other stuff, including electronics eventually. You're selling to a big global economy, because of the low cost of labor, you have a comparative advantage. And it employs tons of people, draws them out of the traditional sectors where there's surplus or underemployed labor. And that model was used in countries sequentially, starting with Japan through a good part of the world, especially in Asia. And the negative side of the digital revolution is that robotics powered by artificial intelligence and enhanced sensors, things like image recognition. I mean, the robots can see, I mean, put it crudely, in a way that wasn't possible before, in which means that they can start to displace human labor in doing labor-intensive things like assembly, electronics. Or this hasn't really happened yet. Textiles and apparel is a big challenge for automation, but I don't think it's a reasonable bet. Most people wouldn't wanna bet that it's a challenge that won't be solved. Which means that the Asian development model in that specific form, right? Labor-intensive manufacturing, assembly, and so on, is gonna lose its power. At just the point where the handoff looks like it would come from East Asia to South Asia and Bangladesh, maybe some in India to some of the poor African countries. And so the question is, what's the, is there an alternative that has those characteristics? You'd leverage global technology and demand and have big, powerful employment engines. And I think the honest answer is we don't know. I mean, I don't think anybody's sure there's an alternative. On the positive side, you can include a lot more people in the economy, create a lot of entrepreneurial activity and so on within a country using the digital platforms. Because of the low cost of entry, the fact that you can overcome challenges associated with distance and so on so easily with digital technology provided you have the infrastructure. And by infrastructure, most people are gonna connect to this using the mobile internet, which is a little more than 15 years old, but not much. People forget how, I forget, how little time it's taken for the mobile internet to essentially spread throughout the world. But you still need the underlying structure. You need the speed or it's connectivity, but not terribly, terribly useful for things like online commerce, education, and other things that can be useful. But there is potential there, for sure. A lot of people are concerned about globalization. Kind of, how do you say, hip pocket joke is the treaty of Westphalia is dead. That you can have models as economists of all the things you would do to keep things on track and ameliorate distress or extreme imbalances. But in a world where finance can be transferred in nanoseconds, where people are resisted because they're not just factors of production, they're citizens who have social customs and histories and so forth, and large scale migration can frighten other people, that their platform is being changed. So we have a situation where the integration that digital provides for us is both very positive. Someone who's a fashion designer in India can reach markets all over the world. But there's also a sense in which things can escape. Now, in the old days, people talked about foreign direct investment in places where there were no labor laws or foreign direct investment in places where there was no climate protection. But it does seem that finance and technology are relatively stronger than people in this global system. And the name of this conference is the return of the state. How do you envision the state returning? And there's so many levels. There's the level of everything is under one tent, global governance. Then there's, but how sensitive are they to the stresses and pains in any given area? Then there's local governance. But you and I can identify what's wrong with where the mayor, but we can't stop it if it's the cross current of many global forces. In your mind, how are you seeing the return of the state, the role of governments in the context of the technologies and systems that we do have? So I mean, I think the return of the state is on several things. First of all, there's an enhanced understanding that the state is absolutely crucial in dealing with challenges, anxieties, things that really matter to people. It's the social insurer. It's the fixer of kind of market failures and so on when it's working properly. And so what I anticipate, Rob, is modification of various aspects of globalization, including ones that have to do with digital technology and data flows, to make the thing that people rely on, which is the nation state, not global. I mean, I don't think, I haven't heard anybody say that we're all gonna feel comfortable being governed by a single global government. When people talk about global governance, they're talking about, I think mainly, institutions that facilitate cooperations among nation states and their sub-entities, because that's what people turn to. I mean, my political science friends tell me constantly, all politics is local. I think that's probably true. So bottom line is, I think we will modify in various ways the interdependence to make nation states more powerful and more able to deliver what their citizens expect. So that means fragmentation of the internet. It may mean backing off in certain digital areas. It'll be modifying trade arrangements. Finance is more complicated, but when I looked at the successful developing economies over the last 25, 30 years, and we asked the, not one, just me, I mean a whole group of people on that commission, on development, growth and development, did they have totally open capital accounts? No, right? Did they have totally open trade, or did they open them suddenly? No, so I think we're in a period of what I would call useful subtlety that will push us in the direction of limiting to some extent inter-extreme forms of interdependence. Now, having said that, with things like climate change or global health challenges, we can't carry that to an extreme, right? We can't just kind of shut down and say we didn't like that world, where people felt a loss of power and control over their lives via their governance structures because we have to cooperate in those areas. But I think the direction of movement will be reducing, challenging, volatility, creating job-destroying interdependence to some extent, interdependence to some extent, and then focusing on the areas that are absolutely crucial. Mm-hmm. Well, we do see a rise in awareness. I attended a little bit of the sessions a couple of days back of the Green Swan Conference and the Central Bankers, talking about the need for international coordination, collaboration, and potentially financing. Christine Logarde, Jay Paul, and others were quite clear about this. I do see concern, oh, let me just go to the question. The G7 announced a minimum tax deal yesterday. How do you see that? You see that as what you might call, each nation is responsible, but there's a sort of teamwork that's being put in place so that people can't evade a threshold. And then the other question I'd ask is, should we be taxing companies or people? That's a good question. Look at, I mean, taxation issues, international, digital, the fundamental questions, what do you tax, how do you tax services that are produced in five countries and consumed in two others inside a company? I don't know. There's very big challenges in that area, but to answer your question directly, I think what the G7 did, I gather it's in response to a suggestion that Secretary Yellen made, is an important step in the right direction. And if the G20 picks it up and goes along with it, that'll be 85% of the global GDP. And I can imagine the version of that actually getting implemented, even though there'll be dissonance, they won't be that powerful. It'll be possible to implement it. And I think this destructive form of tax competition for corporate activity that has been characterized as a race to the bottom is actually something that is usefully dealt with because the alternative, there is an alternative, which is to tell your multinational corporations, not the operator over there, as opposed to pay a kind of fair tax to whatever jurisdiction you're in. I mean, in the end, I don't know how to answer the last part, corporations or people pay taxes. I mean, I guess in the end, people end up paying taxes, but directly or indirectly, but there's an important set of issues that I think need to be dealt with, which is where do taxes, we know governments have to have revenue in order to operate. So they have to tax something. They can tax corporations, they can tax individuals, they can tax transactions, they can tax wealth. And you see just enormous differences even across the OECD countries in those respects. And I think we're entering an era in which we'll ask important questions about, given the objectives that we had, generating revenue for companies, dealing with fairly powerful trends in the direction of inequality, what are the best forms of taxation that allow for economic progress and dynamism on the one hand, but fund the government and deal with the inequalities on the other? You raise a number of interesting points, but one is where people collect the tax. We may have an agreement, but do you pay to where your headquarters is? Do you pay to where your plan is or whatever? And which brings me to a second dimension of this, which is there is an awful lot that these countries need to do collectively now with revenue, particularly as pertains to climate. You had mentioned earlier the high risk premiums in Africa. And the benefit of solar in Africa is not just to the African people. It's to your and my lungs. And the quality of oxygen and the quality of the environment on planet Earth matters to us all. So if they're faced with a risk premium of 800 basis points, shouldn't we create the equivalent of revenue or guarantees or something to fund something that benefits the public good, meaning the global public good? And I don't think it should be a competition between whether Germany pays or whether America pays or Canada pays. At some level, maybe these homogeneous floors on taxation create a pool of revenue that could be dedicated to those common causes. Yeah, no, I think that's it. I mean, ideally that is exactly where you wouldn't wanna go. And the question is, are we gonna kind of get there? But that does mean, you know, I mean, we see this in Europe all the time. I mean, how much fiscal centralization, you know, do you really find acceptable? But there's no question. I mean, the underlying argument is doesn't have a flaw, which is there's a collective interest that goes way beyond the citizens in a particular region for overcoming obstacles like high risk premium stuff. I don't have any doubt about that at all. There's met, in fact, in this morning's financial times, or the weekend edition, there's a report about how potentially rising inflation in the advanced countries will take what you might call the risk-free rate higher as inflationary expectations start to rise a bit. And that that will add to the burden in many emerging economies, some of whom which might call are on the cusp of debt need for debt restructuring right now. So that they're... Do you mean because of the pandemic response? Yeah. Well, after the pandemic response and what have you, they have, how do they say these countries, places like Argentina and what have you, didn't cause the pandemic, but their revenue capacity diminished, which you might call their credit rating ratios, deteriorated, and now the risk-free rates getting pushed up as the advanced economies recover, which deepens their change? Well, it could, especially if they're out of balance on the capital account, going in, then it could make it dramatically worse fairly quickly, I guess, is what I would say. But I think your earlier point is right, which is that I think the general trend is people are not gonna take what you might call full hyper-globalization for granted anymore and ask how are we gonna adapt to it? They're gonna ask how are we gonna adapt globalization, so that our national local objectives, based on values, human development and so on are achievable without the risk of dramatic disruption. Mm-hmm. Like you mentioned a couple of times, and I think I did earlier on the growth commission. What are the five bullet points of wisdom that that long and deep process imparted to you? What do you conclude? What are the lessons of that studies? Well, we tried to summarize it under five headings. So in virtually every country, we were focused on developing countries, but since we wrote that report and thought about it, let me explain just for the audience what we were doing. That exercise was done, these are always progress reports. There is never a moment when you declare you know everything you wanna know, ever, okay? So the last kind of progress report that got a lot of attention was that the Washington consensus kind of codified by John Williamson in 1989, was criticized for the name, but if you actually go look at it, I just recently wrote something about, this is highly sensible, but there'd been 15 years. And in those 15 years, China had grown dramatically. It wasn't clear that was gonna happen. India had started their growth acceleration and a whole bunch of other things that happened in the developing world. So our job was to find out based on experience, talking to experienced practitioners and serious researchers, what have we learned in that period that's useful to carry forward? And that's kind of our interim report that try to be by useful. And what I took away from that, and what I think we tried to summarize is that there were five areas. I won't try to cover them all. I think John Williamson and the Washington consensus were concerned about macroeconomic instability and failures on that front. There's been at least a significant improvement in that area and there's no controversy whatsoever about the importance of that. The second one, I think is one that, we ought to listen to kind of pretty much every year, which is, if you want to achieve your objectives, even if you're a poor country, you have to invest and save at high rates and high rates means 25 plus percent of GDP. You just can't grow at five, six, seven percent if you're under investing. And that means both public and private. The mix matters and I won't bore you with the details. The third one is that on a standalone basis, if you're not connected to the global economy, whatever the risks and challenges are associated with that, then you can't achieve this kind of very rapid progress. So you've got to make your piece and do the best you can dealing with the global economy because it gives you a big market and it gives you the demand I mentioned before. But by far the, and you can't run a centrally planned economy, you need markets. That's not, you know, neoliberal fundamentalism, market fundamentalism or nothing like that. You see all kinds of models, but all of them delegate some of the resource allocation to markets, prices, incentives and so on. But the most important one is governance. I mean, if you ask yourself, where are the problems really coming from? In a very large fraction of the cases, the answer is there's a governance problem. And governance problem means whoever's in charge, I don't mean an individual, just, you know, but a group of people, if they're not competent, if they're pursuing some objective that doesn't sound like the long run public interest, then you get significant deviations from potential. I guess this is a technical way to say it. Governance is just absolutely crucial. And it seems, I guess with the experience of the last four years in the United States, that some of those problems of governance can occur at the core of the system. And there's been obviously a great deal of concern, particularly after the pandemic about, how would you say, the distribution of the burden in this country or the deterioration of public schools where money that used to be called tax evasion is now tax avoidance and it's offshore. And then we say, you know, we can't afford it as the knowledge intensive economy grows and the human capital ladder that the American citizens can climb is eroding. And so I think it's hard also using your lessons to understand what leadership looks like in a global system from a coordination. And I do believe the Biden administration has made substantial progress in trying to re-engender trust and setting a good example, but it's a formidable challenge. No, no, there's no question. I mean, and we, you know, as you said, we have every country, including the United States now has had the experience of, you know, a kind of shaky period with respect to leadership. But I think the ingredients are, you know, they're not easy to define. It's not even easy to prove it matters, you know, from a social slanted point of view. But I think humility, perseverance and dedication, you know, to some version of the inclusive public interest, meaning bringing everybody along and a willingness to recruit talent and get the best talent you can in government in order to, because nobody has all the answers. So, you know, the great leaders are ones that bring people in, bring people together, create a vision that's different from where we happen to be going now, get people kind of on board. It sounds mushy, but, you know, I mean, if you go back to developing countries, Rob, and I'll let you wind up at this point because we're running out of time, you know, you can, countries are no one to stay in a low or no growth equilibrium for a long time. So it's not as if that's an unstable state. So the question is if you all, if you, if over a fairly short period, you move to a different trajectory, you know, where you're investing and saving and rowing at, let's call it 6% a year or seven, where you're doubling the size of the economy every 10 years, something fairly dramatic in, it has to have happened with respect to people's expectations, you know, what they believe is gonna go on in the economy. And it's at least, as I thought about it, you know, those are, that's the critical role that leaders play. They help people understand there's a different trajectory that's sufficiently believable that maybe we ought to give it a try. Well, Mike, we've been talking about all of these challenges in the context of what's been rising political despair. And I guess I'll take my Detroit heritage and go back to Marvin Gaye's What's Going On, where in the third verse he says, we gotta find a way to bring some understanding here today. And I would say, I feel very fortunate at the Institute for New Economic Thinking to work with you and the other members of the Commission on Global Economic Transformation. And I do think we are in a place where just pointing at the pain is insufficient. If we're gonna bring this world to life for our children and grandchildren, we've gotta show that there can be light at the end of the tunnel, alleviate some of that fear, and pull together. It requires a lot from the state and from political leaders, but Mike, leaders like you are making a great contribution. Thanks for being here, and thanks for working with us. Thanks, Rob. And thank you, Tito, for having us again at the best of all. Hopefully next year we'll all be in the opera house together. Right. Right. Thank you. Right. Bye-bye.