The London Consensus: economic principles for the 21st century
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Welcome to the LSE events podcast by the London School of Economics and Political Science. Get ready to hear from some of the most influential international figures in the social sciences. Good evening, everyone. Welcome to this public LSE event. My name is Andres Velasco. I am a professor of public policy and the dean of the School of Public Policy here at the LSE.

I am very pleased and honored to be joined by three friends and also eminent social scientists. Do we think that echo is avoidable? All right, thank you. So beginning right here is Oriana Bandera, who is the professor of economics here at the LSE.

followed by Margaret Levy, who is a professor of political science at Stanford, and Danny Roderick, professor of political economy at the Kennedy School of Government at Harvard. We are here to discuss what it is that we should be doing when it comes to economic and social policy in the 21st century that is different than what we did in the 20th.

You will know, if you follow these things, that this year is the 35th anniversary of what is commonly known as the Washington Consensus. Some people love it, some people hate it, but it leaves no one indifferent. The Washington Consensus was a set of rules about what to do and not to do when it came to economic policy and economic development.

Two years ago, Tim Besley, who's right here in the front row and I, thought that we would invite colleagues to reflect on what it is that we have learned and what it is that we still don't know in contrast to the principles of the Washington Consensus. So we organized a conference. The three colleagues who are up here on stage were contributors to that conference. The conference will appear as a volume

entitled, has exactly the same title as the panel tonight. And let me begin by saying that it will be available on the 27th of October, just in time for Christmas. So please buy a volume, read it, and then give it to your loved ones. Now, the book has the title The London Consensus, and you might be wondering why London and why consensus.

In fact, there wasn't much of a consensus, not even about the title.

And Danny, among others, did not like the consensus bid or the London bid. Some people liked one, some people liked the other. But let me just say one word on what we were up to and then I will open it up to the panellists here. First thing I want to say is that we will not after a consensus on policies. We very much believe that the right policy depends on local circumstances and since not all countries are alike,

The policy in this country need not be the policy on that country. But we did think that there are principles, ideas, abstractions that help us find the right policies, and the policies will then be differing applications of those principles. That's why the subtitle of the book refers to principles and not to policies for the 21st century.

The second thing that the book emphasizes is that maybe we don't have a consensus, meaning we don't have an agreement on the right principles or on the right policies, but we human beings are wired so that we like narratives, we like stories, we tend to behave politically in reaction to some account of what society is like and what it should be doing. So

Call it a consensus, call it a paradigm, call it a narrative. To be politically effective, people trying to carry out social change need to have an account. Whether it's a consensus or not, I do not know. But this book works hard to try to provide such an account. So that's it from me. You've come to listen to our panelists here, so I'm going to each...

Ask each one of them a question to get the ball rolling and then we will make sure that we have enough time for Q&A with the audience. One housekeeping item before we get going, given that we're recording and ideally we will make a podcast out of this event, please turn off your phone. That will make for a better conversation. So let me begin with Margaret.

One of the things that the book emphasizes is that there's no good economic policy without proper consideration to politics. And sometimes what may seem like the right policy will have nasty political consequences, which in turn might lead to bad economic policies and economic outcomes in the future. Margaret has talked a lot about the relationship between politics and power and policymaking.

Tell us a bit about that thinking and about that research. Sure. So if you think about the original Washington Consensus,

Not only were the economics problematic, but so was the theory of the state and the theory of politics that were behind it. Now, the London consensus tries to... Certainly improves on the first, better economics, better economic policy. I'd say it only partially improved on the second for reasons that I'm now going to elaborate a little bit. It still had...

still has as its basis to some extent a Weberian theory of the state, a very top-down, highly bureaucratic, highly competent state, sense of state capacity. And in fact, the way in which I think a democratic governance and a democratic state evolves is through a much more of an interaction with the public.

and with the democratic public, and with mechanisms that make it accountable and responsive to the people it's trying to serve. And that was clearly not true of the Washington Consensus, which was very top-down. So how do we achieve that? The first way I've thought about that in earlier work that I've done was really the conditions under which

members of the polity would comply with or not comply with, consent with or dissent with government practices and policies. And in that way, in addition to voting for whoever they had voted for in a democratic process, they would also show, they could also withdraw support from

by refusing to comply, sometimes explicitly through various forms of mobilization and sometimes implicitly through kinds of weapons of the weak, the sort of James Scott idea, just hiding what you're doing but not going along with it. I think that explains a lot of what we've seen about government and responses to government and pressures to change, but not enough of what we need to understand about it

So more recently, and some of you have already heard this, so I apologize. So more recently, I've been developing an argument about expanded and inclusive communities of fate, F-A-T-E, not faith, fate, intertwined destinies, ways in which our destinies are interactive and combined with each other.

I did work with John Alquist on some labor unions that developed that capacity and therefore could act in the interest of others. So underlying this notion is a sense of human beings as being not individualistic, though they do care about their own private losses and gains, but

But they also are very fundamentally social beings who are interacting with each other and care about each other and engage in what I would call generalized reciprocity or can be put in circumstances where generalized reciprocity becomes the norm. So you pay it forward. It's not simply that you're engaged. It's not just that Danny does something for me and then I do something for Danny. Danny does something for me, I do something for Rihanna who does something...

For you out there, someone else. So that's part of what underlies an expanded and inclusive community of faith. Now, I've been thinking about how you could build that in places that aren't the unions, which already have some structure to begin with. And there are three areas that I've been thinking about particularly. If you think about what's going on in the United States and, in fact, around the world right now, immigration is a big issue.

And the deportation politics in the United States has led to demonstrations that reveal an expanded and inclusive community of faith, where people who are being deported are linked with people who are fairly safe but want to protect them.

I think about issues like protecting our planet and the species that are on our planet. Again, there is a basis there for all of us to interact with each other for a common cause and in opposition to a common enemy or set of policies.

And the third area which I've been developing the most is around care and care work and caregiving. And how do all of us need care at some point? We're all babies. We all get raised by someone. Someone cares about us, we hope, beyond delivering us. And at some point in our lives, most of us have to give care, either to a member of our family, to a friend, or it's our work.

But we're interacting with each other and interdependent on each other in a community that cares and cares about care.

and is providing care. Now I want to say two final things about that. So I see this as a basis, before I say those two final things, I see this as a basis of cohesion and creating a cohesive capitalism, a project where some of us are involved with. I see it as a way of mobilizing, as a basis for mobilizing, as a basis for collective action.

But there are two other provisos that I want to add to this story before concluding. The first is that for it to succeed, it has to develop a set of institutional arrangements or organizational infrastructure that allow the differences of opinion about how to provide care, what to do about immigrants, the things that could divide us, for people to actually find a way to get information that they share,

to create, to overcome conflicts, to agree on policies, knowing that they might disagree over time and change those policies. So it's an evolving process, but requires a set of guardrails or institutional arrangements. The other thing I want to say, which is more negative, is that communities of faith can go either way. So I care a lot about building a positive, productive society

inclusive and expanded community of faith. But there are, of course, lots of examples, what's happening in Northern Ireland right now around immigrants, what happened in Germany with the rise of fascism and Nazism, in which communities of faith are built around exclusivity.

So again, the institutional arrangements matter, the organizers matter, the structure of the system matters, but I see this as a potential for transforming the state, making it responsive to us, and mobilizing around the issues that really matter. Thank you.

Thank you, Margaret. Your comments go to the heart of one of the threads that runs through the whole London Consensus exercise, and it is the idea that people care about things beyond consumption and income. A lot of the Washington Consensus was about maximizing consumption.

Today we understand what we should have always understood, that people care about their ties and their attachments and their communities and a sense of reciprocity in the society in which we live. Now, one reason why that could break up is if people get upset about the lack of jobs or the low quality of jobs. Danny, you contributed a paper to the volume called On Productivism, which makes the point that...

redistribution is important, but that the quantity and quality of jobs and the structure of what we produce and where we produce it and how we produce it is very, very key. And I think that also marks a big departure with conventional thinking 35 years ago. Tell us a bit more about it, please.

Thank you, Andreas. But before I get into my chapter specifically, maybe I'll say a little bit about our sort of ongoing debate about whether consensus and so forth. We've been arguing about this for the last 25 years. Of course, I have not been a fan of Washington consensus. I like London a lot better than I like Washington, but I don't like the idea of consensus still. The...

I have nothing against the principles that are articulated in the book. I just want to make clear we understand what the difference between the economics that we think about as social scientists, the economics that we teach our students, what's the difference between that

and the paradigm of economic policy that we need to have. And I think I see the London consensus as kind of being pushing towards sort of a policy paradigm. Now, I think paradigms are required, but I think we need to keep them separate from economics. You know, I like to say that in economics, the only...

answer that is always true, invariably true, is that the answer to any question is it depends.

And that doesn't make economics a weak science, that actually makes it a very interesting science because economics is all about what it depends on and how do we gather the evidence to determine how it depends and where it would depend and what are the sort of contextual factors that determines what the effects or what effects of policy or the effects of other changes would be.

Now, that's the kind of economics that's very open-ended. Everything depends. I think Andres and I share a lot of things. One of the things that we share is we have a common intellectual hero, Carlos Diaz Alejandro, who was an economic historian, international economist of Cuban origin, long time at Yale and Columbia. And he wrote...

Once he said, by now, any bright graduate student can produce any policy conclusion he desires by changing, by picking his assumptions appropriately. Now, that was more than 50 years ago. And by now, you don't even have to be bright. You can do it sort of, you know, just very easily. So...

That, I think, is important because when we teach economics, I think it's very important to understand the role of context and how, as Andres sort of said at the outset, that you want to be, you know, you want to understand how context shapes outcomes. And I think the empirical revolution in economics has, you know, has exemplified how outcomes can differ according to sort of where the experiments are undertaken and so forth.

Now, the downside of having an economics that in some ways is very rich is that it doesn't necessarily provide you any kind of a guidance for policy from the get-go. And yet when the policymakers and the world of policy needs guidance on that. So I think of policy paradigms as particular versions of

or particular packaging of economic theory and evidence that is designed to address the challenges, the constraint, the opportunities, and the context of a particular time.

So you might think you might not like neoliberalism, and neoliberalism, I've said, was really a kind of bad economics, but it was in many ways was a response to the perceived need of sort of macroeconomic stabilization to overextension of the state, the gains from globalization that could be reaped through globalization. And so it was a particular answer for that time.

I think today we need a kind of a similar kind of paradigm that addresses what the binding constraints of our time is and addresses with a kind of a newly articulated set of values that goes beyond efficiency and growth, that also incorporates things like equity, social cohesion, resilience. These are additional things that we have to put in.

So we do need the paradigm, but I hope that we always can keep sort of half of our mind at least on the notion that if we become too wedded to our paradigm...

then we suffer the fate of neoliberalism, which it became kind of a cartoon or caricature of itself. If you look at the original Washington Consensus, right, in 1990, as Andres Velasco said, there's nothing disagreeable in the original Washington Consensus. Like, they're really, really, you know, banal things. Like, you know...

don't run a huge fiscal deficit or pay attention to markets. Property rights are important, nothing that you would disagree with. But today, of course, in the minds of people, it's become very specific set of policy, very concrete recommendations.

And I think any kind of policy paradigm that we articulate might suffer the same kind of-- so all of that, just to be by way of caveat. Now, how do I think of this sort of policy paradigm? I think there are three critical challenges we're facing. One is we need to restore the middle class in the advanced countries. I think that's fundamentally the source of our social and political ills and a very important cause of the rise of the political right.

We need to address our climate transition. That's, of course, a threat to our physical existence. And we need to foster poverty reduction and development in the global south. I see those as the three critical challenges that this new paradigm has to address. Now, what connects them, I think, is the imperative of structural change.

It's the need to push economies, employment, innovation, technology in a direction that markets on their own are not able to do because the process of structural change is rife with market failures. Whether it is promoting green technologies, whether it is promoting employment and innovation in higher productivity activities in the developing world,

whether it is sustaining good jobs in developing countries, in the advanced countries, in a post-industrial era. This process of structural change is complete with market failures. That's where I think the role of the government comes in. And the notion of productivism is, you know, forget the term. I hate it and others hate it too, but it's more the style of policymaking which...

Margaret was talking about, which is it just goes beyond the notion that there is markets and there is governments and the markets, you know, governments are smart enough to know exactly what the market failures are, will implement the correct Pigovian taxes and subsidies, and then will discipline the private sector. It's a very different type of policymaking, uh,

where the government works with the private sector through a cross-sectoral coalitions and trying to elicit information from the private sector where the obstacles are, where the failures are, engages in a kind of iterative sort of policy making and an experimental form of policy making to provide a variety of remedies, whether it is to develop good jobs or to develop

green technologies or to sustain higher productivity job and services in developing countries where prematurity industrialization has made export-oriented industrialization impossible. So there's a kind of a style of policymaking which, if you will, is an updated model

updated version of old style industrial policy except that it is not top down, it is not focusing on manufacturing industries. And that's the kind of approach that I develop in this chapter as a sort of a critical element of addressing these common, these challenges that look very different but I think require a very similar kind of approach to policy. - Thank you very much Danny. Let me underscore one thing Danny said which is very important.

You said one half of one's brain should remain skeptical and be aware that the answer is, it all depends. Completely agree.

Hard question is what we do with the other half of our brain. I once ran for office in my country and I was asked at a national debate, what is the right policy? And I replied, it all depends. Guess what? I lost the election. So we need to navigate, you know, a careful course between skepticism and convictions. And that is the path that we're trying to build and navigate with this book.

you will be the judges of whether we succeed when you buy it and read it. Now, if there's one thing that the Washington Consensus had nothing to say about, was the economics of gender and the role of women in the labor market. 35 years ago, that was a non-issue. Today, it is, as it always should have been, a major issue.

And Oriana, with Barbara Pretongolo from Oxford, wrote what I thought was a really eye-opening chapter on what we have learned in these 35 years and what we should be doing in that respect. The floor is yours. Thank you so much. So I will start by thinking about what is equity. What do we mean by gender equity? Do we mean equal outcomes? I think what we really want to achieve is not equal outcomes necessarily, but rather...

the fact that gender would have no bearing on occupational choice. As much as your preference for rice versus pasta, which is something that in my family is discussed daily, obviously, you know, we all know the right answer, but that should have no bearing whatsoever on whether you work in the private sector or in the public sector, whether you have a job or whether you stay home. Now, why do we want equity? Why do we want gender to be irrelevant in labour market choices?

It's for two reasons. I think the first one, and by far the most important, is redistributive justice. There is no doubt that the current division of gender inside the home and outside the home is not just. For the simple fact that when you meet a woman who stays at home and you ask her, what do you do? The answer is, I'm just a housewife.

No man would ever say, "I'm just the prime minister" or "I'm just the CEO of this company" and no woman would say that either, were she the prime minister or the CEO of a company. So that basically sets two different playing fields. So justice is the first issue. Now, being economists, we also worry about how much would it cost to bring justice. It turns out that for once,

it costs nothing. To the contrary, it would probably increase efficiency. So this is a parade improvement, which is the economic speech for a win-win. It's not a zero-sum game. We would actually gain from having equity in occupations. Why do we gain? There is a kind of a... This is very ironic. The normal argument for what we gain from allowing women in the labour force is that labour force participation increases.

But that's not true. And it's due to the fact, the same assumption, the work that the women do inside the home is not work. Measured labour force participation increases, but actual labour force participation depends on whether the woman hires somebody else to do the housework or whether she does it on top of her job, in which case labour force participation increases, GDP increases, but at the expense of the welfare of the woman.

So the question is, given that this is both equitable and efficient, what are we waiting for? Why don't we go ahead and achieve it? Well, we're not there not for lack of trying. Maybe people are not familiar with the fact that by now the education gap is completely closed. If anything, in many countries women's education exceeds that of men. And somehow paradoxically, it's more likely to be so precisely in the countries where labour force participation is lower.

So in Pakistan, for instance, women are much more likely to have graduate degrees than men do. The education gap is gone. The rights gap is gone. All property rights, any form of rights in most industrialized countries, as well as in low-income countries, are pretty much the same. So why isn't this happening? Well, if we look at it, what all these policies have done is to bring down individual barriers.

to gender, to women, labour force participation. Women can go to work. They have the right to. They have the education that they need. But what these policies don't look at is exactly what Margaret was pointing out, which is they don't look at the norms. They don't look at the fact that we are social beings. They don't look at the fact that by going to work and earning more than the husband, a woman might make the husband look bad.

in front of his peers because these are the norms that unfortunately we live with. So we need to do more to understand the norms because no woman, no matter how educated, no matter how many rights she has, the husband is sad if she goes to work and they have daily arguments about it. That is a huge cost that we're not taking into account. And that cost depends on society's view of the acceptability of women working outside the home.

Now, there's a lot said about childcare because this disparity between men and women actually happens when the first child is born. But I want to conclude just to shift a bit our attention to another period, and that's the period after the children have gone to school. Now, that period happens to be a lot longer, thank God, than the period during which kids are small and need constant care.

The time spent at home is counted as long-term unemployment. You could be sitting there drinking beer and playing the PlayStation for five years, you would have exactly the same labor market returns as the return that a woman who runs a household has on the labor market. We need to find a way to put a value on that period, on the skills acquired in that period. Every woman here who has had young children will know

that it's a matter of logistics. So you effectively running a small firm. Why don't we test managerial abilities after kids have gone to school? And we find jobs for women as managers. So there is a long period after the children have left the home, which is very rarely taken into account into policy. Starting from that is the point where there is less conflict in society because you're not abandoning children.

There's all the debate about whether children are better off with their mothers or not. So you don't even have to enter that. So that is a practical law hanging fruit. Like that, there are many others. But the principle has to be that we have to go past the individual level constraints and try to understand society's constraints a lot. Thank you, Oriana. So lots of food for thought there in connection to the broader problem

project of the London Consensus, I'd emphasize too. First of all, things are more complicated than they seem. And secondly, it is not only individual outcomes, but also, again, social norms, social attachments, community that plays a role. Sometimes good, sometimes not so good.

All right, I will be tempted to do another round of questions, but I will refrain from that temptation because I have been warned that at 6 p.m. sharp we have to stop. There's another event here later on. So I'm going to open it up for questions with one request. Make it short, make it sharp, and tell us who you are. Right here in the third row. Yes. There's a microphone coming your way.

Thank you all for the insightful interventions. My name is Lien, I'm doing my MSc in Development Studies at the LSE and my question is for Professor Roderick. So from your discussion on paradigms, I understand that in order to do the restoring the middle class, climate transition, poverty reduction, the policies need to be endogenous to whatever economic realities we have.

My question is, would you say that existing metrics that we have today, like input-output tables or technology intensity of different sectors, employment generation potential, are good enough for policymakers to use and target sectors effectively, or would you say there's an issue of endogeneity there? Thank you. I think that's a great question. Thank you. I think it's very important to...

to raise the question of whether we're measuring the outcomes that we want to achieve, because if policymakers don't have good measures, they're not going to make it an objective. And we know that it's, you know, even things like growth have become policy objectives only after we had good measures of GDP and so forth. So I think

One area, I think, where we need a lot more work is in developing what would be sort of the national accounts equivalent of the measures of good jobs. I do think there is now increasing...

increasing consensus, I can use the term, among economists, and that's not news to sociologists or social psychologists and so forth, that good jobs are incredibly important, not just for sustaining middle class levels of living, but in terms of social recognition, sense of identity, sense of contribution to society, and I think the disappearance of good jobs

has been causally linked to the rise of far-right politics and many of the political malfunction we've experienced in Europe and in the United States. But, you know, sort of...

what we measure are wages, we measure employment levels, but a lot of the characters of good jobs are things that are experienced subjectively, whether you feel you're treated well by your boss, whether there's a career ladder, whether you can think you can progress, whether you have autonomy and agency on the job,

and whether the job provides flexibility. And so many of those things, I think we have to find ways of measuring much better, and that we can also track in a high-frequency kind of a way that we want to raise the political salience of this as an important political objective, because whatever we don't measure, we're not going to make a policy objective. Thank you, Danny. I want to take a question from this side to be equitable. Yes, sir, right there, third row.

Again, please identify yourself and keep it sharp and to the point. Hi, Pedro Rossi. I'm from Brazil, the Global Fund for a New Economy. I have read an interview of John Williamson where he said that the term he created, the Washington Consensus, was unfortunate. Unfortunate because he couldn't handle what it has become in terms of policy orientation and unfortunate because it seems something that was imposed from the North

to the South. So people went to the streets against IMF and against the Washington Consensus. So my question is, what is the place of the global South in the London Consensus? And what is the place of global governance and North-South relation? Thank you. Who wants to take that? You should.

I can give you a very short answer. First, I don't know what the Global South is. I am from the South, but I'm not sure I am global. Secondly, the passports of the people writing these papers are from all over the place, including many countries from south of the equator. But more fundamentally, I am going to agree with Danny in his initial remarks that

There are general economic principles. There are particular applications. And we would be doing everybody a disfavor if you were applying the policy that is right for Norway in Brazil or in South Africa or in Indonesia. So I feel very comfortable with the way we are doing.

handling this important subject. Andre, can I add something to that? Because I think both what Oriana was saying and what I was saying are general principles about, one, how you govern and how you think about equity for gender, but not only for gender, for other kinds of marginalized or excluded groups.

So I think those principles apply to the North as well as the South and are global.

I'm going to actually defend the Washington Consensus. I can't believe I'm doing this. You're going to defend the Washington Consensus? Oh, this is getting interesting. There is a sense in which the Washington Consensus reflected developing countries much more than, if I can say, the London Consensus. Because as John Williamson at the time was, he was unfortunately called it the Washington Consensus, but that was where the conference was being held.

the contributors, it was meant to distill the lessons that Latin American policymakers had internalized and were applying in a process of reform in Latin America. So in fact, all the contributors were from Latin America, and the ideas were supposed to originate from Latin America, at least in the form of the policy. Now, of course, most of these people had gone to universities and gotten their degrees in the U.S., but that was actually the global south. It was Latin America. So

doesn't guarantee necessarily that it'll work. Let me add one thing about that. In defense of what we're doing here, the Washington Consensus is a bunch of Latin American people with PhDs, many of them friends of mine. This is also a bunch of people with PhDs from Latin America and elsewhere. But I think that is making a more fundamental point.

The reason why the Washington Consensus focused on certain things is that those were the problems of the day in that particular region. 1989 was the end of the so-called lost decade in Latin America. A massive debt crisis had been taking place. Hyperinflation had broken out in a bunch of places, so people were reasonably worried about inflation, budget deficits, debt. That doesn't mean that

In other places, with other priorities and other problems, we need a different emphasis on politics. So I'm perfectly happy with both approaches. And of course, we still worry about debt and we still think that inflation ought to be low and that sort of thing. A few ideas have not entirely gone away. Let me take a question from this side. Yes, sir, over here. Microphone, please.

While the microphone reaches, let me just add one thing about this division between global north and global south. Where do you draw the line? I've never really understood what the difference really is. Of course, every place has its unique set of problems, but there are universal principles. We like to think that we deal with the universal principles. I graduated from RSE many years ago.

currently teaching at UCL. My question goes to a professor who raised a very important question about gender equality. You may have noticed the crisis we're facing in terms of raising children, motherhood or fatherhood, is an alarming effect, the digital surrogacy. So we're babysitting by using digital device, AI device, and more and more. So do you see that as a menace

It's a man as not just to motherhood of females integral role to raising our children, but also to, it's a man as to the humanity as a whole. What's your take on that digital motherhood surrogacy? So it depends what the counterfactual is. It always depends on the counterfactual.

For one specific reason, I stayed clear of discussing the child-rearing point. That's why I was focusing on the place where children had been reared however you want, because that is a very delicate point, who rears the children. I think there are many fathers who would like to do that and are not allowed by the current norms.

There is a reason why grandfathers are a lot keener of spending time with their grandchildren because as fathers they never got the chance. So I think this is, you know, the inequality is bad on both sides. I don't think the counterfactual is digital childcare. One could imagine, and there is plenty of evidence that early year education has very high returns independently.

of the provision of care by the mother or the father. So early-year education would be an investment worthwhile in and of itself, regardless of the gender implications. But in general, the point that I was trying to make is not that women have to go to work and leave the children with an AI device, as you seem to suggest, but rather that everybody should have the same access to jobs.

Why don't we go back to that end over there? Not seeing any hands. I'm seeing a hand right here online. Okay, please. Are you going to read it? Okay, all right. Microphone is here. Thank you. Question for Professor Levi from John Alec from the Keystone Research Center in the U.S.,

Does the historical decline of union representation in the US, as documented by Henry Farber and colleagues, perhaps suggest that progressive communities of fate confront truly daunting obstacles? The question?

There's no question that there's no, it's absolutely the case that union density has declined in the United States and in many other parts of the world. And that's not by accident. That has been a government policy in many places and an employer policy, often backed by government, to attack unions, particularly in the United States and some other places.

And unions have been an important basis for solidarity, as several of us in the room have studied and documented. But they're not the only basis. I would like to see unions revived.

There was a lot of conversation today in the larger conference about the role that unions could play in producing better work, in producing more dignity at work, in producing participation. But I think we shouldn't only count on unions or political parties.

as the forms of ways in which we mobilize and express our views about what government should be doing or hold government accountable. And it's time, as it always is time, to look for alternative ways. If you even think about unions, the unions that developed in the 19th century look very different than the unions that evolved in the early 20th century, let alone the service sector unions and other unions that

that develop now. So even standard organizations change. And we need to really be thinking about what the right forms of mobilization are in different places for different purposes at this moment in history. Thanks very much. That side of the room is being a little shy. I see no hands over there. So there's no shortage of hands. Oh, I am really being neglectful. I apologize. Yes, right there, sir. In the fourth row. Thank you.

Yeah, microphone is coming your way. Hi, I'm interrupting this event to tell you about another awesome LSE podcast that we think you'd enjoy. LSE IQ asks social scientists and other experts to answer one intelligent question. Like, why do people believe in conspiracy theories? Or can we afford the super rich? Come check us out. Just search for LSE IQ wherever you get your podcasts. Now back to the event.

Hi, my name is Matias. I'm a master's student here at LSE and I had a question for Professor Oriana. Well, how should economists account for the growing trad wife movement like today? Where some women just stay at home basically while recognizing the economic value of domestic work.

I would like to know if you think there are some policy responses in regard to this matter, because it will affect the labor market dynamics. So, very good question. And, of course, the proper answer would require a panel in and of itself, not about the trad whites necessarily, but how do we deal with preferences that can go against economic interests,

I think the safe thing to say is that we should give everybody the same opportunities. And then those who don't want to take those opportunities, that's their choice. We are not at that level yet. So I would worry about tradwives only when women and men have exactly the same opportunities. Then if some women choose to stay at home, that is their choice. Then we decide what to do with that. But as of now, they don't even have the same opportunities.

So we don't know whether it's, you know, I'm more fatty. They can go to work, therefore they choose to say this is what I like to do or whether they actually prefer that. Can I add one thing to that? I'm involved in a project on the social science of care and caregiving.

And one of the things about developing a community of faith around care is to actually create policies that support women and men, children and elderly and disabled and others who need care with the policies that they need.

So someone can choose to be a trad wife or a working wife. They can choose to be a husband at home or a working husband. But they still need all kinds of support. Nobody can do it by themselves. There needs to be child care facilities. There need to be health care facilities. And we are not thinking seriously about the kinds enough in most countries, about the kinds of policies and support that

that families and individuals who have children or have elderly parents or whatever needs they have, what kind of supports they need from government and from the community and from their religious institutions. And we've really got to think hard about that. And part of what the TradWife movement is about, I think, is asking for that kind of support. They want to play a traditional role, but they don't want to do it totally by themselves. Right.

And an additional challenge, if I may add, is if a lot of jobs in the future are going to be in the care sector, how do we make those jobs attractive jobs, jobs that people want, jobs that carry a certain dignity and status?

And pay. And pay, of course. And pay, indeed. That is not the case today, but it has to be the case in the future, given that more and more people every day will have those kinds of jobs. This is something we spent a fair bit of time talking about earlier today. Yes, in the back there. The red water bottle or whatever it is. Thank you.

Molotov cocktail? Not a Piazzas. Hi, my name is Sebastian. I wonder if you have some words on how to build good public policies in a moment like the present in which populism is rising in developing and in developed world and with populism pretty bad public policy. Populism and public policy, important subject, who wants to go at it?

I didn't hear the full question. Oh, if I can summarize it, and I didn't hear it entirely, so please correct me if I'm getting it wrong. At a time of rising populism in which the demand for good public policies seems to be dimming, what do we do about it and how do we aid five populism and ensure that policies remain sound? Did I get it right, more or less? Thank you. We mobilize.

We have to act. We have to demand those policies.

Times will change. Some of us have lived through something like this before. Some of us grew up in the age of McCarthyism. Some of us lived during the war in Vietnam and the kind of polarization that occurred. Some of us are children of Holocaust victims. I mean, this is not totally news to the world that we see these periods. And the only way to get out of them is to organize them.

and to make demands and to try to get the world to get back on the kind of plane we want it to be on.

So, I mean, I would say I think part, you know, I think the answer to your question, I think about it in two parts. One, I think, is definitely the politics. What is the how do we mobilize the countervailing political power and mobilize and organize civil society so that that we can stand in the way of the eroding of the rule of law and eroding of the fundamental institutions of

that's going on presently in the United States. That's sort of the political part is extremely important. But also I think that's where sort of, if you will, various extensions of the London Consensus or something like that is going to play a role, which is we also have to have an alternative set of ideas. We have to have better ideas. So I think, you know, and we need to understand that, you know, we're not going back

to what created the problem in the first place. I think it was the one thing that our period of neoliberalism and globalization created was the fundamental tension that as economies became more integrated with each other, they became more disintegrated within each other.

That is that nations split up on economic, social, political, and increasingly cultural grounds. And that is the source of our broken politics right now. And to a large extent, it's due to the kind of policies that we pursued for two or three decades that created many winners, but also created a lot of losers and a lot of laggards.

and we can't go back. So we need to have, we need to understand where this populism is coming from, and we need to generate the answers to that. So I think that's why, for example, I'm putting, I think the emphasis on

on community, on good jobs, on sort of the resilience. These are very important. These are things that were overlooked by neoliberalism. I think we also have to understand that we cannot go back to sort of Keynesian social democracy either. So that kind of sort of three or four decades after the Second World War that built the middle class was based on a model of industrialization and trade unionism that we cannot...

and a role of the welfare state that we cannot rely on going forward, partly because in a lot of countries, the welfare state has gone as far as it can, partly because the disappearance of good jobs is now much more a structural phenomenon that needs to directly target at policies. So I think that idea of developing the narrative, the ideas, that will help us elect, hopefully, politicians that will not...

go down that xenophobic, demagogic, sort of authoritarian path is, you know, that is also very important. - I wanna strongly support what Danny said, but also add a piece to that, which is that the theory of change that I have is, I call it the Francis Perkins theory of change. Francis Perkins was the first woman to be in the cabinet in the United States, and she was the Secretary of Labor

who was largely responsible for the Social Security program and for the National Labor Relations Act and other things. And even earlier in her career, she was responsible or partially responsible for the first Worker Safety Act. She was ready. She always had in her drawer policies prepared for when the moment came to act.

So when the Triangle Shirtwaist Factory, a terrible tragedy in the United States, occurred in 1911 and immigrant women were throwing themselves literally out of the building in front of her, she went with Bob Wagner to the legislature and passed the first worker safety acts. They were already, having spoken with the unions, having thought about the policies, they were ready. And that's what...

The London Consensus is trying to do what the Cohesive Capitalism Program is trying to do, and what a lot of people in the audience who are parts of groups all over the world are attempting to do, to think about the future and be prepared for what comes next. Mm-hmm.

I want to use my chair's privilege to add two sentences to that. I could not agree more that we need better policies, otherwise we would not be running this project or holding this meeting. Better policies are a necessary condition for better outcomes, but they're not a sufficient condition. Populists are not winning elections because they have better policies. Populists are winning elections because they're playing identity politics a lot better than the rest of us are.

And typically, the response of centrists or reformers or social democrats has been, I don't play identity politics. Here's my 10-point plan. Every election is a fight between somebody running on a 10-point plan and somebody saying, they're all crooks, kick them out.

nine out of 10 times the 10 point plan loses, right? So in addition to all the good stuff having to do with policy that we're trying to craft here and many other places, I think we have to ask ourselves the real question.

What is it about the politics that we practice that will make us more effective? Yeah, organizing and mobilizing is some of it, but I think we would be kidding ourselves if we don't recognize that highly educated elites have lost the trust of citizens. And that trust is not going to be recovered simply by going to a demonstration. It's going to be a much longer process, calling also for much better candidates than we've had in the recent past.

We have time for one more question. Right here, sir, in the front. While you choose, can I add a little thing? Yes, of course. I think that we almost have it because all populist policies are predicated on hate and individual identity policies. If we bring it to community identity policy, as Margaret Spitz said, then it is a lot more constructive and it is a lot more appealing, I think, to everybody.

The challenge there, as Margaret pointed out, is that community identity policy can be inclusive and lovely or it can be exclusive and nasty. And the challenge is to make it the former and not the latter. You're going to have the last word. Thank you. Thank you for the talk. It's been really interesting so far. So I'm Nadeem. I'm a PPA undergrad. I read a lot of your papers, Danny, so thank you. And I'm currently doing my master's at London Business School. So my question to you is kind of a little bit of what you were talking about just now.

around specific policies. So you spoke a little bit about the hollowing out of the middle class, then it's like how that's given way to populism and a lot of advanced economy. So I'd be interested to hear the kind of specific policies that you might suggest we implement, especially as a lot of

the dissatisfaction is being caused by trends such as globalisation and automation, the kind of structural labour market trend. So what kind of new policies do you think we can look forward to in the London consensus? Thank you.

Again, I'm glad you're asking the question, but given the short amount of time, I can only telescope maybe just give you a couple of very quick answers. First, I think it's important to understand where the answer is not. I think a lot of the concern about how we bring good jobs back and rebuild the middle class, both on the central left and the central right, has focused on manufacturing.

and that's not where the jobs are going to be. So I think that's a dead end, and I think the left bears as much responsibility in terms of working on that. So if it's not going to be in manufacturing, which is the traditional base of the middle class, where is it going to be? It's going to be in services, and we will have to work very hard at making jobs

in the kinds of sectors that we've talked about, like the care sector, which is going to be on its own the largest occupation in the years ahead in all the advanced countries. So the challenge is how do we make those jobs more productive in the broad sense of the word, in the sense of not just how many people are you taking care of, but in terms of how effective are you, are you able to reduce long-term hospitalization rates, are chronic disease incidences being lowered,

and the people you're caring for, they're more satisfied as well as you're more satisfied doing that job. I think the answer to how do we do that, whether it's the care sector or it's the retail sector or it's customer service representative or food service preparer, it's going to be a combination of organizational changes that we need to organize the work in a way that can be where we give more autonomy and agency to individual workers.

and also the use of technology that is much more complementary to the work rather than simply replacing work, making them much more complementary, augmenting the skills that these workers already have.

that I think requires a kind of a dedicated effort to invest in technologies and innovation that are worker-friendly and that's going to help bring sort of wages and work conditions up in those kind of sectors. So I think those are the kinds of direction, organizational changes, provisions of public inputs and technology that's sort of particularly worker-friendly, that sort of, you know, are different avenues in which one can start working on those.

Thank you very, very much, Danny. I'm afraid we're out of time, so let me just end with two quick comments. First, I am told that on your chair there was a QR code. If you use the QR code, you can go to a website which has the table of contents of the book, I think a couple of chapters of the book, and over time we're going to be adding more material there. And of course the book, as I said, will be out in October. Please buy it, give it, cherish it, and distribute it.

Second point that I want to make simply is that I think everybody will agree with me that this has been a very rich and wonderful discussion. So to our three guests, thank you very, very much. Thank you for listening. You can subscribe to the LSE Events podcast on your favorite podcast app and help other listeners discover us by leaving a review. Visit lse.ac.uk forward slash events to find out what's on next. We hope you join us at another LSE event soon.