After the Meltdown
George Akerlof, Tim Besley, Pierre Fortin and moderator Gene Lang came to Glendon this past Thursday (March 24). They launched the new Centre for Global Challenges with an outside-the-box discussion of lessons to be drawn After the Meltdown. We will soon be posting their speaking points and summaries. They were superb, aware of the limits of their discipline, open to other sources of understanding, non-ideological and committed to making things better.
The discussion also revealed just how much uncertainty remains. Did the stimulus save us ? Absolutely, said one; pretty much, said another; maybe, said a third, but at what costs. Is the solution more and better regulation? Absolutely, said one; to some extent, said another, but Canada is already in good shape; maybe, said a third, but we need a light touch and a global strategy. How do we close the productivity gap? Nobody knows, said one, it’s a mystery, but maybe excellence in education, science, infrastructure, openness to the world, and an injection of ambition and aspiration would help.
What was absolutely agreed by all panelists was that the recession has magnified the challenges facing governments and particularly how to manage the simultaneous pressures of lower productivity and lower tax revenues, increasing debt and the demands on our health and social systems of an aging population? Also agreed, more or less, was that an economics narrowly based on the notion of perfectly efficient markets and economically motivated individuals was part of the problem and a new behavioural economics that draws on other disciplines and other notions of rationality could be part of the solution. Governments individually and collectively have an important role to play, perhaps more important than many mainstream economists have allowed.
The quality of presentation and questions gave reason for optimism about our collective capacity to come to some answers, to find a way forward. At the same time and not surprisingly, members of the audience – students and professors, government and private sector leaders – were asking big questions about political leadership and statesmanship, about the quality of our science and knowledge, about where issues of environment and social justice play, and whether our basic models were coming apart at the seams. And then we all had some wine. More to come.