 Hello, everyone, and welcome to today's webinar, Globalization in the Age of COVID-19. I'm very happy to introduce today's speaker, Danny Rodrick, who is the Ford Foundation Professor of International Political Economy at the John F. Kennedy School of Government at Harvard University. Danny has published extensively in the areas of international economics, economic development, and political economy, including several books, the most recent being Straight Talk on Trade, ideas for a sane world economy. Those of you who have been following Einit's work know that we have been focused on the economic issues underlying populism for a while now, specifically the issues of trade and globalization, but also more broadly the issues of inequality. The work of David O'Tour and others found a strong statistical link between China's trade shock and the decline of manufacturing jobs in America, and further the link between voting behavior and this decline tells a powerful political story that not many mainstream economists were open to before 2016. Danny, on the other hand, was warning us about the dangers of hyper-globalization many years before the populist backlash. The pandemic and its disruption of global supply chains has only served to further accelerate the backlash and cause for isolationism. I'm very eager to hear Danny's thoughts today on how we can develop a more positive vision, not only of globalization going forward, but in general, how one can actually begin to engage the distributional effects of neoliberal economics, which we have been obfuscating for so long as economists. Danny is going to be talking not just about globalization, but also about more structural issues. So he will be talking more broadly about reshaping economic strategy after COVID-19. So a couple of words about the structure of the webinar. Danny's going to speak for about half an hour, and we will then open it up for questions. At the bottom of your Zoom screen, you'll see a Q&A icon. You can type in your questions there, and we'll get to as many of them as we can in the time we have. So with that, let me turn it over to Danny. Thank you. Thank you very much, Pia. And thank you, Inet. It's always nice to be the guest of Inet, an outfit that's done a lot to bring new thinking into economics, and I think all professional economists are in Inet's debt. So originally I had said that my talk was going to be on globalization, but I thought that I would try to present a kind of a more positive, and actually, as Pia mentioned, more of a structural agenda for the general orientation of economic policy in the post-COVID era. And I want to sort of paint in a broad brush some of this general reorientation that I think might serve us well. So my title is reshaping economic strategy. I hope you can see my title page now. And I'd like to begin by making the point that I think COVID-19 is largely reinforcing a pre-existing trend, rather than pointing us in a completely different and unexpected direction. I think there are three such major trends that has been going on before the pandemic. One sort of moving away from sort of a neoliberal market fundamentalist understanding of policy to one that placed a much greater role on government policy on the importance of states. Interestingly this was happening even on the right with a new brand of libertarianism, new brand of conservative thinkers, starting to emphasize the importance of national economic policies and importance of the government, and of course the left and the progressives always emphasizing that. But if you look at, for example, Joe Biden who is considered to be a centrist in the Democratic Party on virtually every dimension of policy is to the left in terms of emphasizing the role of a useful government policy compared to a platform that Hillary Clinton had four years ago. The center of the conversation has changed. Secondly, and I think in parallel, there is a movement away from what I've called hyper-globalization to back to the nation's faith, with, you know, of course we have renewed attention to establishing domestic supply chains and ensuring domestic security. But again, this is a trend that predates the pandemic and certainly actually predates even the election of President Trump, you know, that global value chains had begun to slow down, buoyancy of world trade had come down, Chinese exports, the share of GDP have actually come down significantly since the global financial crisis. So this is also an ongoing phenomenon. And in terms of overall economic growth and development strategy for lower-income countries or middle-income countries, we have been already experiencing a movement away from export-oriented industrialization to the emergence of different types of alternative growth models that emphasize much more domestic demand, domestic structural change, and place actually much less importance on industrialization, export-oriented industrialization, because the ability of export-oriented industrialization to generate high growth has really become much, much smaller or much weakened in recent decades. So that's as a matter of necessity countries that have grown, have grown off the back of other strategies and so that's already a change that was underway even if we, forget the fact that the world economy is a deep recession and that the world markets are not going to be very welcoming to exports from developing countries in the near term. I think those three trends actually have one common root and I think that's my central diagnosis and that's why my strategy will be, the strategy that I'm going to be describing is one that's going to be, that's going to try to tackle this common root. First let me be clear about what that root is. I've called this here a deepening economic dualism within nations. Now of course those of us who study developing countries are not unfamiliar with the concept of dualism. Dualism is a feature of developing countries. What has been happening I think in recent times is that very similar features have now started to take hold in the advanced countries as well. And I describe this as a very stark divide between technologically advanced and globally integrated parts of these economies and the lagging firms or sectors of regions. So this divide is a technological one, it's a spatial one, it's an income and social and cultural one and often these divides are actually lining up nicely with each other, dividing countries into two between those who are essentially the beneficiaries of underlying trends in globalization and technology and those that have not been beneficiaries. In the developing world where this divide has already have always existed I think the mode of participation in global markets of the last few decades through global value chains and other modes of internationalization has simply reinforced that trend and it's actually quite starking how while the most advanced firms and sectors of globalized parts of developing countries have become integrated with the rest of the economy they have become disintegrated from the rest of their local economies without essentially growing much bigger. Young people and relatively unskilled workers have essentially migrated into urban areas but have not found jobs in these more advanced parts, more globally integrated parts of these economies deepening the divide. So the reason that this is the central diagnosis is that it's essentially what I think explains all the trends or the three major trends is the driving force behind these three trends that I've outlined in the outset. It's obviously behind the growing inequality and economic insecurity within countries. It's driving the backlash against hyper-globalization in her introductory comments referred to the work of Arthur and his co-authors and by now actually there's a lot of work that shows trade shocks and occasionally financial shocks have fueled the rise of a kind of a global backlash against globalization and the rise of authoritarian right-wing groups. And I think this dualization or entrenching of dualization in the case of developing countries is also what lies behind this, I should say it's another feature of a process of de-industrialization and slowing down of the export-oriented industrialization engine in developing countries to the extent that those sectors that are taking advantage of global markets are not connecting with the rest of the economy, therefore they're not acting as a strong engine of growth because the benefits that they generate in terms of higher productivity, higher wages, higher incomes remain bottled up in very narrow parts of the economy. So I think this is the central diagnosis and I think what lies behind these common trends. Just a few charts that we can see that if we look at the advanced countries regardless of whether we look at manufacturing or services, we see a bigger gap opening up between those firms that are at the global productivity frontier and those that are falling behind. So you can see this gap opening up. So this is the advanced country version of productive dualism that's taking shape. A very important phenomenon of actually another facet of David Otto's work is the work on labor market polarization which is essentially the middle of the labor market disappearing. This chart shows that this is a phenomenon of labor markets not just in the United States but also of all advanced markets, of all advanced economies. That is that middle skill occupations are experiencing declining demand and relatively declining earnings and associated with that of course is a middle class squeeze. Middle class squeeze is very large in a place like the United States where income supports and safety is much weaker but it's also in evidence in the bulk of the advanced countries as well. So this is actually these data are for European countries and you can see without going into the detail that after the global financial crisis in the vast majority of countries, the middle class essentially has shrunk accompanying this trend of disappearance of jobs of mid-skill. So the crux of the matter therefore is that the problem is what one might call good jobs. Good jobs are becoming scarce. We don't need to spend too much time on discussing good jobs but you can think of them as essentially a stable employment that enables the middle class existence by local standards and comes with core labor protections such as safe working conditions, collective bargaining rights, regulations against arbitrary dismissal, kind of a kind of also a career progression towards some advancement prospectively. Now when we talk about sort of this phenomenon which is now I think empirically more and more well established, I think it's common to link this to these secular changes in technology and globalization but what I want to take as my starting point is to say that essentially neither technology nor globalization are exogenous processes that are outside of control and that we can that is there in fact processes that we can manage and the kind of economic strategy that I'm going to be uplining as one that refuses to simply take technological trends as given instead asks how can we engage in a process of expanding good jobs and rebuilding middle classes which for developing countries also has an implication that it's going to be growth promoting. So stating the problem as a kind of as an economics problem would I would put it in this form which is that the employment and innovation decisions that shape labor demand that firms investors innovators engage in are the source of significant externalities which I'm going to call good jobs externalities. Now these good jobs externalities by now we have a significant and growing evidence that these good job externalities in terms of local communities and society at large are actually quite pervasive and that these externalities produce significant effects on social and political life. We have the work that goes all the way back to William Julius Wilson's 1996 book on you know when jobs disappear where he outlined the corrosive effects of the industrialization or local employment declines on the social fabric of the communities in which those job declines occur and that work has been now updated and expanded in the work of Arthur Dorn and Hansen so we know that when jobs disappear when good jobs disappear, broken families, crime drug abuse, mortality rates to increase. The recent book by Angus Deaton and Ann Case of course on is a very poignant exposition of the social costs of good jobs disappear. Politically we have the consequences of political polarization and the rise of populist parties and again going back to the point that Pia made we know that when jobs disappear and this could be due to trade shocks it could be due to technology information that they produce significant adverse political consequences in terms of support for authoritarian popular parties, support for political polarization and there are also some work that suggests that there might be longer term effects of jobs disappearing in terms of the kinds of values or cultural attitudes that that promotes in particular the rise of authoritarian values. There is a looking up for sort of big leaders authoritarian leaders that might solve our problems so these social political attitudinal costs are are severe but there is also what one might call sort of an economic externality or implication for economic performance and productivity growth in general which is that when the middle sort of when there's when the there weren't enough good jobs being produced it's also an indicator of an indication that the most productive sectors the most advanced technologies aren't essentially disseminating throughout the rest of the society because for productive new new new inventions new technologies to have a significant effect on total factor productivity and economy to show up as aggregate economic growth you need those innovations those innovative sectors to absorb larger and larger segments of the labor force of the resources of the economy for these things to disseminate throughout the rest of the economy but the disappearance of good jobs means that essentially these innovative sectors are not absorbing labor from from the rest of the economy so what that means is that when you put those two strands together it also means that we no longer have to separate out the social agenda and the growth agendas from each other or the economic agenda and the social agenda because really the only way you can get greater inclusion less inequality greater economic security is by creating better jobs more productive jobs for you know people of mid or or less you know on the other hand you know the only way you can actually sort of get growth is by ensuring that the workers that you currently have are being absorbed into the more productive parts of the economy so one key argument that I want to make is that basically thinking about our problem from this perspective of good jobs and good jobs externalities to a large extent joins the social and economic agendas and makes them one one issue one problem and therefore the remedies are going to be a range of policies that you know I would summarize under sort of three headings one is policies that directly target the supply of good jobs that will come through increasing the productive employment capacity of the existing firms it could come through increasing the number of firms with productive employment either through entry or from other terms and workforce development policies that target the capabilities of the local workforce secondly policies that are at the national or enterprise level that explicitly redirect innovation in a more friendly direction that is to say rather than simply taking the direction of technological change as given exploiting the fact that technological change is always directed as I'll say more about this in a minute but given that the direction of technological changes that he's already engaged in us there might be institutional changes and policies that would make the the that direction more friendly to employment rather than employment I think one sort of way of combining these two these two legs of policies that increase supply of good jobs and policies that target innovation is to think in terms of modern industrial policies and modern in the sense that that I'm going to make clear in a second and also that you know industrial policies but not necessarily confined to manufacturing per se and I think that sort of is another important qualification but so I'm going to try to to develop this idea a little bit more in a second so I think the best way to I think to perhaps explain what I have in mind is by drawing some distinctions and that's what I want to do I want to distinguish the kind of policy framework that I'm advocating from first from traditional conceptions of welfare state policies so it's going to be a different approach to social inclusion than the welfare state second I want to distinguish it from the conventional understanding of the relationship between technology and labor markets and I've already seen all this and third I want to distinguish it from the the traditional or conventional way in which economists approach regulating market economies okay so those are the three dimensions along which what I'm suggesting I think is different or novel or represents a departure so let me say a little bit about each one of these three elements first with respect to how this would differ from traditional policies of welfare state or social inclusion policies I find it useful to talk about policies of that target inequality or inclusion or exclusion with the help of a matrix like this of this kind at the top so there are two questions in the on this matrix one is you know at what point of the economy does policy intervene typically in discussions about inequality we make a distinction between predistribution and redistribution I actually want to make a threefold distinction that relates to the stage of the economy with respect to production so I want to say about sort of the pre-production stage of the economy that before labor and capital and resources are put into production the production stage where employment innovation production decisions are made and post-production after firms and have made those decisions so those are three different stages of the economy the second dimension is the answer to the question what kind of inequality do we care about do we care about most about people at the very bottom of the distribution do we care about people at the very top or do we care about people in the middle so we can actually you know we have a wide range of policies and these are examples of you know existing examples from the United States or some policy proposals about that fills out essentially the entire matrix so if you're focusing on health education policies and increasing access to health and education for sort of the people at low levels of income then you're essentially in the top left-hand side cell wealth taxes are sort of diagonally at the opposite end which is basically redistributing after production but that's sort of really targeting at the very top and not the distribution now the traditional welfare state model is one that is based essentially focuses on pre-production and post-production that is to say it has two legs one is to increase the endowments with which individuals enter markets that is to increase investments in education and training both for primary schools but also for public spending on higher education and secondly to engage in policies both of redistribution and social insurance so through transfers fiscal redistribution and safety nets and social protection so there is an updated version of this welfare state has changed along the way but if you look for example at the most recent account of the OECD their future work report and what they recommend it's really the emphasis is on first on adult learning so you get you know people to you know to be able to work with new technologies and secondly sort of you know revamped social protection to make sure that nobody falls through the cracks but once again the focus is in the pre-production and the post-production state now I think while the welfare state model has served us well I think there's a there's a presumption here that the good jobs or middle-class jobs are going to be available essentially to most people with adequate education so you focus first on on spending on education and then also to ensure that nobody falls through cracks you engage in social insurance programs to take care of idiosyncratic risks and that's the logic behind the welfare state improve endowments on the one hand and then take care of idiosyncratic risks through social insurance and these are policies that lie in the pre-production and post-production columns in terms of the above matrix like to suggest that to the extent that economic and security and employment today is a structural problem that is driven by ongoing trends in technology and globalization that these the traditional welfare state policies cannot address the core problem which is the disappearance of of good jobs so when technology and globalization follow up the middle of the employment distribution we have a structural problem the structural problem that's going to exhibit itself in the form of permanently bad jobs and permanently depressed regional labor markets so I think we need a different strategy that tackles good job creation directly and that's the sense which I think what I'm suggesting which is to to essentially focus much more directly in the middle column in particular the the cell at the center of the table one called as a productivist model a good jobs model good jobs welfare state model if you have a good title let me know and I will use it but it is so that's sort of my that's the first distinction that I wanted to emphasize in terms of where the focus of policies goes it goes up in it's directly in the production column so what does that mean it means working directly with employers investors innovators to try to change their incentives their decisions some of it can be done through labor laws through increasing the power of labor on the workforce through competition and antitrust policies sectoral wage agreements some of it is going to however come in the form of what used to be called industrial policy which is to engage firms directly in a kind of a dialogue where you're engaged in in changing their their their incentives from doing one thing as opposed to another and in this case to increase their incentives to expand supply of good jobs the second dimension on which this what I'm suggesting is a is a departure is a rethinking of the relationship between technology and labor markets now the conventional account here about you know the the implication of technology for labor markets essentially takes technology as being completely an exogenous process so here's a paraphrase of the kind of sentence that you must have seen at least hundreds of times or you will see if you read any kind of report on this topic and it goes something like this technology is rapidly changing the skills needed on the job and workers need to adjust to increase education and continuous training so technology is just you know something that's happening out there and then workers need to adjust to that technology through appropriate scaling treats exotic technologies an exogenous force but I think now there is increasing in recognition in economics as well that the direction of technology responds to a lot of things that you know Daruna Gemmaulu and Pascal Resturopo among others have done some very good work on this just are doing that we need to take both that the direction of technological changes in dodgers response to incentives that we should take advantage of it to create more better jobs so I think there are at least three levels of of of possible intervention there one is with respect to direct incentives so there are many incentives embedded in our current innovation systems current tax structure that skew the incentives against employment friendly technology the clearest of that is you know the the fact that you know a physical capital is subsidized whereas employment is tax and therefore you know from the get-go you're giving you know there's an incentive to save on labor rnd subsidies typically are also very skewed the second level is in terms of norms about you know what kind of you know what kind of of technology do you want to to invest in and I think those are norms are are embedded in our in our innovation systems or from sort of what part of the government runs innovation so in the United States DARPA is a big stimulus behind innovation but that's a defense related agency so they focus they put their efforts on defense related technologies and the question of what that will do to employment is not one that they pay particular attention to it would be very different if we had a kind of as for example a recent bill by Schumer and young advocates we should have a DARPA like effort that's run out of a new technology agency which is taking jobs much more directly into account in in in funding innovation and third I think equally importantly since you know which technologies get developed and how they deployed in the workplace also depends on who has a say who has a relative power so you know we see this for example when google employees essentially organized to prevent to company from engaging in the development of new technologies of let's say you know facial recognition that's going to help police agencies so that's an objection from within the company saying that this is not the kind of technology we want to invest in this is not what we are I think by changing power you can imagine that when workers have more power on the workplace that they would have more say on what type of technologies are deployed so I think we're only at the beginning of thinking along this line so I think we need to invest a lot more thinking but the basic point here is that we need to when we think about technology innovation we need to put employment and emphasis on employment friendly technologies in a way that is simply not happening today whether you talk about you know in Europe the european green deal which is appropriately focused on green technologies and climate change or with respect to much of the discussion about responding to the chinese technological competition in the u.s. which is much more focused about capturing technological supremacy I think looking at at the innovation policies from the perspective of how they can be much more directly employment friendly can change the calculus in ways that that would make a big difference and finally sort of the you know the third plank of this is in terms of a new relationship between the government and the economy a new type of of industrial policy and and and here the distinction is really from the from the traditional way in which economists think about government policy which is a kind of an arms length kind of regulation that the government simply sets a bunch of you know taxes and regulations and then keeps the private sector at arms length the industrial policy equivalent of this is what i've called here the traditional model of industrial policy where you know the government x anti-selects a number of sectors for promotion x anti-selects a number of instruments of proportions such as taxing some tools or or export subsidies and then you know that's what the industrial policy consists of whereas the more contemporary modern or types of industrial policy is is much more of a of an ongoing collaboration presumes much less x anti-knowledge on the part of the regulators or the government or the development agencies about where the problems are what type of activities to promote and what type of instruments are going to be the most appropriate for doing so so the identification of objectives of constraints happens through an ongoing process of collaboration so the emphasis is on learning on iteration on experimentation on monitoring the consequences of what you're doing and changing course on revising policy as as as you go along so this has the advantage that it has the capacity to elicit and generate much more information along the way and also ensure that the criterion for success isn't are you able to pick winners which you are not unless you happen to be South Korea and Taiwan but the criterion for success instead becomes a much weaker one which is are you able to let losers go so in other words through the information you're figuring out are you able to revise your policies in a way that you can minimize your losses and focus on the areas where you actually can make some some this may sound like I'll skip this this may sound a bit like pie in the sky and but the fact is that this is already something that is being done I think this model of collaborative iterative problem solving that involves both the private sector and the public sector already takes place even the United States in the context of DARPA it's a much smaller cousin ARPA-E it's taking place in US manufacturing institutes the new hundred billion plus industrial policy proposal that I just mentioned briefly from Senator Schumer in Young explicitly builds on this model so there is actually an initiative on the table those are all sort of national level federal initiatives they're also very sort of local initiatives that are much more narrowly targeted on workforce development and probably the best known of that is the US project in the US project quest which has been very successful at getting disadvantaged youth by working them closely with them and also with potential employers to steal them and get them to train them in local community colleges and put them in better jobs and otherwise that's a model of the kind of extended labor market or workforce development interventions that one can think of that has some partnership in a current version has some partnership with employers but I think that part that partnership with employer part could be developed to a much greater extent and then there are a number of other examples even in in countries that we don't think actually can manage industrial policy very well such as Argentina that there are some parts such as in the approach to agricultural technology where in fact they have been quite successful so I think I will just end with this final slide I think the kind of approach that I'm suggesting here has a number of advantages first it directly focuses on structure which is you know there are a lot of different reasons why we might have any quality in society but they are always being reinforced and reinforced in the course of production on a day in day out basis and I think the best way to actually address these problems is through the structure of production per se I think sort of the model of policy making that I've advocated essentially does away with this sort of traditional debates between markets and the state that the model of collaborative iterative rulemaking under this kind of uncertainty is one where you understand that there's you know that there are there's an important role for both of them and here maybe I'll just show very quickly the slide that that I skipped which is this the quid pro quo here between the private sector and the government agencies is that firms need the public sector they need access to the stable skill workforce reliable infrastructure reliable legal enforcement and contracts and kind of technological infrastructure because these problems because these requirements post collective action problems they're typically provided by the government and that's where the dependence of success depend is on effective government action is so important but on the other side governments also need firms to internalize what I've called these good job external in the decisions they make with respect to you know job classifications job creation the type of technology they invest in and so forth so this third is this merging of the the social and economic agendas that I've already mentioned that when you look at the problem from this perspective there's no longer you know part of your government is trying to maximize growth and the other part is trying to ensure that it's well distributed if you do it through this way you're going to get both and finally I think it cuts through this sort of all debate between you know incremental change versus revolution because this is the kind of strategy that has the possibilities of producing a significantly different institutional structure down the path down the way but doesn't presume that you're just making that big leap from the very outset so you can start from your existing institutional structure but good that could lead to a much bigger transformation down the way okay so that's a lot and and there's also obviously a lot that you know I don't quite have a good grasp of and I can so but I wanted to to present this as a kind of a general approach um to what I think is let me just talk to you Danny thank you um as usual you have a way of setting up and analyzing a problem that brings deep clarity to many of the issues that we're dealing with and putting it into a broader structural framework and much of what you said really resonated um if I think about the work that Inet has been supporting Peter Teman I think back in 2015 2016 was talking about problems with the dual economy which I think specifically talks about the issues of the fact that we've dropped the middle class and because we don't have some place to push people when we have um when we restructure education we're not really thinking about the problem structurally so this was a very helpful way to think about it um a few months ago right before the shutdown we organized a conference where we were trying to think about the future of work um and some of our thinking was economists do tend to get bogged down in this argument of how much of the problem is coming from globalization and trade and the export of jobs and how much of it is coming through automation and technology and you know there's this what I see is somewhat useless exercise of trying to assign a percentage to each of them and as you point out it doesn't make sense to think of them separately but one of the things that was very clear that came out of our conference was that if you look at what's happening with technology and its interaction with the labor market we're seeing the technologies we have today shifting us further and further back in terms of what we're trying to achieve with respect to the Gini coefficient so rather than technology moving us towards the place that we want to go I think we're looking at problems like what David Wilde has referred to as the fissured economy where increasingly you're seeing um you know this split in uh the in corporations and firms as a result of increased technology and I think if I were to try and understand what's going on here I would ask the question what is the political economy I believe the same political economy that has driven the issues that we have seen with globalization where neoliberal economics was very clear about the positive aspects of trade without trying to really understand the redistributional effects are we not going to run into the same political economy issues when we look at technology and innovation and um you know it's very clear that we can use tax policy and some of these other industrial policies that you talk about to try and address the issues we're seeing but instead we're looking at monopolies like google and amazon and we're seeing the political influence that they have so that it's becoming increasingly harder for us to set into place any kind of industrial policy that's actually going to shift us towards a more genie negative environment are we not dealing with exactly the same political economy issues in the technological spectrum that we've dealt with in the globalization uh spectrum that's a very good question I think you know I would say um that that the that the underlying structure of the problem um uh is is is the same uh with two differences on on the on the one is that quantitatively um the the effect of technology on labor markets is probably much bigger going forward so this is going to be if globalization was a shock you know I think technology is going to be even bigger one going forward at least relative to globalization um secondly but which might be you know compensating uh is that um you know the elasticity let me pull it you know the elasticity of the kind of backlash to trade seems to be much greater than the elasticity of backlash to labor displacing technology uh so on the one hand the shock is bigger but you know at least so far the response to technological displacement of labor hasn't been as large let me leave that aside but I mean I think the basic problem the basic question you're you're asking is how do we avoid this um the uh I think we need to to avoid it but but you know we need to um I mean first we need to use our terms and our language carefully um it's remarkable how all the underlying maintain assumption behind the future work kind of efforts is really you know how can we get labor to adjust itself to technology which is you know this to me is is is not the right starting point at all I mean technology is there to benefit society you know it's not it doesn't sort of fall into our lap um and we are not uh you know spending nearly enough time and resources we need to to ask the other question which is how can technology serve the needs of our existing labor markets I mean my colleague Ricardo Hausman has a nice phrase which I use you know that you know the problem is not to solve the problems of the labor market the labor market you wish you had the problem is to solve the you have to solve the problems of the workers you have currently not the ones that you wish you had and therefore your technological choices have to be appropriate uh to the workforce that you have now that raises the question of you know if you know you know if the structure of incentives you know firms you know platforms are making their own decisions regardless are we ever going to get to a better equilibrium I think better you know I think you know moving from one equilibrium to another is always you know a mixture of two things one is the structure of vested interests and you know maybe platform monopolies have an interest in having more control over what they do and that's going to require a different kind of technology maybe not one that is inclusive to labor but the other part is is ideas and narratives I mean I think the reason that the narrative on globalization has changed is because you know partly because of what we have found partly because of the backlash I mean the whole narrative about how we deal with technology on globalization has changed and I think we need a kind of a similar transformation about the the narrative um on technology that that you know basically emphasizes that technology has to benefit the society and labor it's not that labor has to prepare itself for technology is that the technology has to be suitable uh to um are the workers that we have currently and that means uh taking on board very seriously this indigeneity of the direction of technological change and it's not just going to be through you know price incentives and and reforming taxes it's also going to be by I think giving labor more power I think that's then we're going back to the interests right you know we need to give labor more power at the enterprise level you need to give labor more power at the national level uh so you can have you know this dynamic between interests and ideas or narratives uh moving you in in in in the right direction so that's I mean that's how you know I hope it's going to happen because otherwise I think the problems that are created by current technological trends are even more serious going forward than what we had with globalization yeah I couldn't agree more I think so much of this really boils down to what kind of leverage does the labor mark uh does labor have in terms of setting the terms uh for the for the government and the direction of innovation I'm going to turn now to some of the questions that have come in uh we have we have five minutes left so you better pick the good one yeah okay I'll do my best um I have a question here from Vandana Gyan Chandrani has COVID-19 reimagined the linkages between national policies or tools to resolve rising inequalities in the um and the role of economic globalization in society yeah I mean without question I mean the pandemic I think has been sort of like a magnifying glass right I mean it's it's it's held you know all of our problems now are you know visible to the naked eye you know sort of and and all of them have become you know worse um and and so I think you know there is a need you know people are I mean I think governments are going to be forced to respond I think the pressure from below is going to be very strong um you know whether this will actually result in change it's very hard to say because you know we went through a bit over a decade ago we went through the global financial crisis which was the biggest economic crisis since the great depression and remarkably little changed after that um and this is a bit of a bigger crisis and maybe again uh much will not change but so so I don't know I mean it depends I myself I'm not clear as to whether you know the momentum here is going to be um sufficiently strong and it'll be met by political leaders who um have a good um good take on what needs to be done so I don't know I have a question here from Kathleen Stephenson would you see labor unions as key economic agents enhancing collaboration between government and the private sector I definitely I mean yes but I I think we need to go beyond labor unions I mean I think that we have to find alternative instruments and labor unions may not be the right way to increase uh worker voice in the good economy uh you know one idea that I am attracted to is the idea of sectoral wage boards which you know basically regardless of whether you're a member of a union or not that there are sort of discussions on employment conditions at the sectoral level between firms and and and and and you know representatives of workers but all in the government that sets work standards wage and other labor standards at the sectoral level um so there you know I think we need to there are proposals to directly give workers much more voice by splitting the governance of firms to have workers have equal 50 of the voting share um uh so there I think we'll need to we need to experiment uh I don't think there's going to be just one remedy and I don't think labor unions alone are going to do it. I have another question about trade Carmen and I do ask can you talk more about reduced global trade what is the implication for African countries that have small local markets for manufactured goods? Yeah you know I I if what I'm saying is correct um you know I don't think even if they have exporting getting growth and inclusive development through exporting manufacturers frankly I don't see any country doing it uh even in the best of time so I I just I think the good jobs will have to come through increased productivity mostly in services for the home market um so I think it's a much harder model of development than simply getting a few manufacturing sectors off the ground and hoping that they would you know grow and absorb employment because that's not going to happen so I don't think the size of the domestic market is is the issue at all the issue is we really actually don't know what the contemporary equivalent of um contemporary version of an export or you know sort of a growth model is when you know the the the growth model that has been essentially the only model that we have for sustained growth and development which is industrialization when that is no longer working. Yeah um we have I think time for one more question uh we have one from Anisha Chitgopi given the close nexus between technology and globalization how much bargaining power do you think developed countries uh have technology importers an applying productivist approach do you propose to channelize technology towards good job creation? Yeah I think the creators of technology are the advanced countries so when I talk about redirecting uh innovation in a more employment friendly direction that's really a message mostly to the United States and Europe and to some extent maybe China a little bit most developing countries are technology takers and I think increasingly uh as technology has become more skill intensive it's more complementary to skill and more uh capital intensive I think developing countries have effectively have lost out and we see this I mean that that they are comparative advantage in manufacturing has gone down because I mean to put it very starkly if you can manufacture shoes using 3d printing with advanced capital equipment you're not going to put your factory in a developing country anymore it's going to be in Germany um and and so you know you're not going to be exporting um uh uh uh you know shoes from a low-cost labor-abundant environment that has been now going on for for quite some time and unfortunately developing countries don't have much say in this but I think developed countries advanced countries for their own interests and for reasons I've tried to just explain in my presentation um have a a a known interest uh in in in in pushing direct pushing innovation in a more employment friendly direction but I have to say that this is not going to help developing countries a lot uh because I don't think that uh that you know manufacturing is going to be a source of a lot of employment creation into developing okay well Danny I want to thank you for taking the time to um discuss these issues with us there's a tremendous amount here um if for those of you watching if you want to uh look at Danny's slides this should be available on the iNet website and there should be a recording of this up on the website in a couple of days so I want to thank all of you also for joining us and uh I hope you will tune in next Thursday at noon eastern for our next webinar which will be a conversation between iNet president Rob Johnson and uh Jesse Isinger who is a senior reporter and editor at ProPublica uh Jesse has been tracking where the COVID-19 bailout money has been going so I imagine that's going to be another important lesson in political economy for all of us uh you can register for that on the iNet website and uh Danny thank you once again thank you p.m thank you bye