Sean Pillot de Chenecey (00:04): Hello. This podcast is care of Speakers Associates, the global speaker bureau representing a select group of the world’s finest thinkers and thought leaders. Founded in 1999, today Speakers Associates operate out of nine offices across seven countries covering the UK, Europe and the Middle East. I’m Sean Pillot de Chenecey, author of the Post-Truth Business and Influencers and Revolutionaries. In this series, I interview a range of fascinating individuals, proudly represented by the bureau. These change agents and industry experts give an update on their specialist areas of knowledge, and also on their motivations and viewpoints regarding the future of business. Today, I’m delighted to be joined by Roger Bootle. Roger made his name with his direct approach and ability to forecast major economic events from the credit crunch to the property crash and issues within the European Union. Roger Bootle is chairman of Capital Economics, one of the world’s largest independent macroeconomics consultancies. Roger is also an Honorary Fellow of the Institute of Actuaries. Formerly Group Chief Economist of HSBC, and a visiting professor at Manchester Business School. Famously under chancellor, Kenneth Clark. He was appointed to the government’s panel of independent economic advisors. The so-called wise men. In 2012, Roger was named economics commentator of the year and together with a team from Capital Economics, he won the Wolfson Prize. The second biggest prize in Economics after the Nobel. Roger has written many articles and several books on economics, his book, Making a Success at Brexit and Reforming the EU is the fourth edition of the trouble with Europe. His latest book, The AI Economy: Work, Wealth and Welfare in the Robot Age is already drawing immense applause. So Roger, welcome.

Roger Bootle (02:11): Hello.

Sean Pillot de Chenecey (02:13): Roger. Tell me your background is quite phenomenal to put it mildly. So it has to start somewhere. So where did your story begin from the perspective of where you are now?

Roger Bootle (02:25): Well, I suppose I began by being a bit interested in economics when I was at school, but at the time I was particularly interested in politics and economics was really a sideline to that. I thought, well, gosh, if I’m ever going to go into politics, ’cause believe it or not, I thought I would go into politics. How mad can that be? I’d have to understand economics. So I got into it and then university, I got more into it and the interest in politics faded a bit. I thought, gosh, this subject is really, really interesting. And then, I became an academic actually at Oxford University, which is where I’d studied. I was all set on a path to an academic career there. I am age 25 in Oxford, Dom, and I thought to myself, this is a bit duh. I mean, you can’t do only that you know nothing about the world. So I gave up my position. And would you believe it? I started off as a trainee banker with Citibank and I went from being an Oxford Dom to learning how to trade Euro dollars in the space of about eight weeks.

Sean Pillot de Chenecey (03:24): Wow. And what did your fellow Doms think about that?

Roger Bootle (03:30): Well, awful. I was bonkers of course. Perhaps I was. It didn’t take me long though in the banking world to realize that, okay, Oxford wasn’t quite right for me and academic economics wasn’t right for me, but neither was being in a bank and certainly not being a dealer in a bank. So then I made my way back to the world of economics. So first of all, worked for the Confederation of British Industry as an economist. And then I went into the city, first of all, for former stock brokers. And that then really set me on my path and I knew what I wanted to do. I wanted to do economics, but not in the way that it’s done in universities. I wanted to be in the practical world. I wanted to be, I wanted have the buzz of markets. I’d like to actually the fact that as a market economist, this is difficult of course, but if you can take the pressure it’s, it’s good. I like the fact that when you said something to be valuable, you had to be taking a risk and you could be proved right or wrong. I really like that. As opposed to the academic thing where you take sort of years and years and years to say nothing.

Sean Pillot de Chenecey (04:30): Can I ask one of the points we spoke about, which also I think leads on from that? Should you say style of thinking you mentioned yesterday. So with regards to your new book, the current book, The AI Economy, a lot of the media coverage around AI, particularly from the perspective of the future of work over the last couple of years has been incredibly negative and alarmist. You know, they’re coming to get us. It’s all over, you know, will the last person attempt to turn the lights out? I think you take a far more progressive and positive viewpoint. So perhaps you can tell us about that.

Roger Bootle (05:06): Yeah. You are absolutely right about the tone of most of what’s been written on this subject. And some of it is really frankly, apocalyptic. There’s an awful lot of pessimism around. I think a lot of ordinary people are frankly, very scared. There are surveys that show that they’re very scared about the future. I think one of the reasons for this is that the people who’ve written about AI and robots let’s put the two together are almost all techies. If I can use that term, they know no economics. And in most cases it shows, I think you’ve got to approach this subject from the standpoint of economic history, which is what I do in the book. Now it’s not to say that the techy pessimist are wrong, they may be right, but I think they’ve got to, if they wanna make their case, they’ve got to do it through the lens of economic history.

Roger Bootle (05:53): Because the simple facts of these for the last 200 years machines have been coming along, making human beings, redundant, making whole skills and activities redundant. And yet what’s been the result. The result has been rising employment. As new jobs have appeared to replace the old and rising living standards. So the question they’ve all got to answer is why is this different this time? And I don’t think it is different now. There’s one other reason. I think why there’s so much pessimism around. There’s a great tendency in modern society. And I’m not clever enough to know why this is, but there seems to be a great tendency to want to believe in disasters. Now, of course, a lot of people aren’t not gonna argue against this. A lot of people believe in climate disaster, but that’s only, the latest of a whole series of other possible disasters that could befall humanity. I think this should be seen in the same light. A lot of human beings want to believe for some reason, I don’t understand that the future is really grim.

Sean Pillot de Chenecey (06:51): Can I ask, does this have a, are there cultural differences around this? I mean, again, we spoke earlier on about your perspectives on, let’s say on a national or regional or global basis. So if you are talking about this subject to a UK audience, as opposed to a Chinese audience, as opposed to, let’s say to, an international audience at Davos or whatever it. Does what you say change?

Roger Bootle (07:16): What I say doesn’t change, but the attitude of the audience is indeed very different. And in general generalizations of course are dangerous. But in general, in Asia, the advances that AI and robots bring are looked on much more favorably. There isn’t the same sense that humanities, in some sense, threatened, nor do I say it in countries like China, for instance, is there the same anxiety about possible infringements to personal freedom and threats to democracy that there is in the west? I think probably the negativity is strongest of all in Europe, which I include the UK where people see threats to democracy, threats to personal privacy. And at the same time they more readily see jobs disappearing than new jobs appearing. To some extent that’s true in America as well, but then you’ve got, you know, the overall American optimism, which I think tends to carry all before before it. So although the many people in America have these same fears, it’s difficult, I think to get the Americans really pessimistic about a coming technological change because their natural default position is to assume that it’s gonna be good for us or, and what’s more, America’s gonna be particularly good at it.

Sean Pillot de Chenecey (08:31): I think it gets interesting on that. One of the points you’re making there attitudes towards robotics from a bluntly put, you know, Asian versus Western perspective, I think Karen Byrum. Jillian Tett, a writer, I’m sure we both admire, the FT, she wrote a very interesting piece about precisely this subject. Think about four months ago in the FT weekend magazine. Talking about the way that, and again, I think again, your new book alludes very much to welfare from a home perspective. The Japanese are very comfortable with robots in the home. They’re very comfortable generally speaking culturally through the entertainment with robot culture. And so there isn’t this, frankly, frankly, apocalyptic viewpoint of what a robot represents in Japanese culture. And it’s a really interesting point she made though, which I think links into your thinking.

Roger Bootle (09:24): Yes, it is interesting. I mean, culturally in Japan for a long time, actually robots have been seen in very, in cartoons, in films, videos, books has essentially helpers rather than threats. Whereas in, if I call it Western culture, we’ve got now going back a few decades, this notion of them taking over, it’s a bit like the sort of Frankenstein story getting outta control, you know, we set them up, we invent them. Then they take over, they turn nasty and we are obliterated.

Sean Pillot de Chenecey (09:55): Yeah. Precisely. Yeah. So the way they’re portrayed in media culture, entertainment culture is absolutely on a polarized basis. Yes. I think interesting. Also your point about privacy and AI. So again, I think a lot of, I mean, I’ve written about this and I know you have written about it in incredibly detailed manner. The way that the privacy debate that quite frankly, wasn’t ready a debate a couple of years ago is absolutely sent to stage now has been one of the big, big topics of the last year and viewed again, I think very differently on a Western and an Asian basis in terms of what it represents.

Roger Bootle (10:34): Well, I suppose unsurprisingly, really, one can’t really expect the communist regime in China to be that exercised about personal freedom and privacy, but for Western societies, this is the very stuff of what we are, isn’t it. And I think this is a very major threat, which has to be taken seriously. And there’s only one entity really in society that can deal with this and that’s the government. I mean, there is a sense, I think in which this whole subject area does point you towards the need for beefed up government powers in a variety of ways, ’cause you can’t expect the private sector to police itself in this regard. And one of the dangers that I’m very conscious of and I allude to in the book is that recognizing that these threats and difficulties do lead you towards and enhanced role for the state in some respects as so often happens.

Roger Bootle (11:24): I think the danger is that the state over does it and it clunks down with an iron fist and tries to suppress this stuff. Now so far this hasn’t happened, but there’s lots of stuff around in the literature about the desirability, in some cases of banning robots and AI and more generally of taxing them. This is a powerfully advocated view across Europe and America, actually. I think it’s profoundly misguided myself, but there is I think a danger that because there are some realistic downsides to AI, we end up reacting in the wrong way. And I think throwing out the baby with the bath board.

Sean Pillot de Chenecey (12:01): In terms of inspiration for you personally, where’s this coming from? So are you getting in terms of what you’re reading and watching and listening to, et cetera, are you looking to colleagues in the world of economics in the city broadly? Are you looking to political think tanks or are you looking in a completely different direction? So who and what inspires you?

Roger Bootle (12:23): On this book?

Sean Pillot de Chenecey (12:24): Yeah.

Roger Bootle (12:24): Well this is really, I think pretty much out of kilter with much of the other things that I’ve written. It is a book by the way about economics. I mean, obviously it’s a lot about AI and robots in it, but it’s a book about economics rather than a techy book about AI. Well, the inspiration is really quite simple. I mean, I didn’t know much about it. But the more I read and talked to people and spoke to businesses and spoke at conferences and so on and so forth, the more it became obvious to me that they were thinking in many cases, worrying a lot about AI. And so I started reading and the more I read, the more interested I became and particularly as it became obvious to me that not many economists had written about this subject, but the AI techies wrote an awful lot about economics. And I thought to myself, actually, there’s a gap here that I think someone needs to be filling. And I thought as I went on, why not me? And so I came to think it was a subject that really had to be dealt with by an economist, from an economics point of view.

Sean Pillot de Chenecey (13:31): In terms of that aspect of looking forward, if we can go in fact backwards to look forward, your previous book did incredibly well, we were talking earlier on translated, I think into nine plus languages now, is in, was incredibly prescient. So perhaps just talk about that and what you were thinking about in the book, the points you were making there and just how you feel now, looking back at it?

Roger Bootle (13:57): You’re referring to the Death of Inflation.

Sean Pillot de Chenecey (13:59): Yeah. Precisely.

Roger Bootle (14:00): Yeah. 1996 that was published. And I started thinking about it and writing things for private circulation in the city, along those lines in around about 1990, actually. Well, it’s interesting. The inspiration for it actually again, came from my knowledge of economic history as I’ve been in the city for ages. And at the time I was Chief Economist of HSBC. And, I was very conscious of the fact that not only did all the youngsters that were around me, even then, they were much younger than me and not to mention now. No, no economic history, but if you were asked them to get some data on something or charts on something, obviously they go on to Bloomberg or Reuters or whatever. And the data series would only go back about 10 or 15 years, or if you were lucky, sort of about 20, 25 years and knowing economic history as I did, or to some extent, I knew that the prewar period was very, very different.

Roger Bootle (15:00): And, I was familiar therefore with periods of deflation, I was aware of just how very odd in the widest sweep of history, the postwar continual inflation was nevermind the rampant inflation of the 1970s. Now, I think it was actually from economic history that I began to get this sense. Hang on a minute, here’s a lazy consensus. That’s to say that everything’s bound to be like this, and it’s gonna carry on ed nauseam. I began to sense this was a lazy consensus from people who knew know history and there’s, that’s the first thing. And then secondly, I thought I could sense among the policy makers as sea change, whereas at least in Britain, also in Japan and some other countries, there was a sort of almost tolerance of inflation in the sixties and seventies and real paranoia about unemployment in Germany was the opposite.

Roger Bootle (15:57): Of course they, they were paranoid about inflation. They were always worried about inflation. But I sensed in the Anglo Saxon countries as we moved from the eighties towards the early nineties, that the mind typical mindset of policy makers in those Anglo Saxon countries was changing. And they really were prepared to go to very strong efforts to bring inflation down. And then the third thing, and I do attribute, I think my presence at the time at HSBC is the found an origin of this. I became aware, I think, much earlier than other most other people did of the rising importance of China. I’d been to China. My first visit was in the mid to late eighties, no earlier than that actually in the early eighties. And, I could see what was happening. I could see that again. I knew the history.

Roger Bootle (16:51): I could see the potential that Chinese manufacturing could have on the west. And I saw this as effectively delivering a series of downward price shocks in the way that in the seventies we’d been used to upward price shocks from the oil price. And the whole economics profession was obsessed by this notion of oil and upward shocks and other economists on the money supply and thinking all you had to do was control the money spot. I never really believed all that. I could see as China rose to prominence a series of downward price shocks, making it easier for the monetary authorities to achieve the low inflation that they, I thought at the time would be aiming at very strongly. So really those three things coming together.

Sean Pillot de Chenecey (17:32): And it’s say at the time it was incredibly prescient and.

Roger Bootle (17:36): Very bold call. I mean, when I look back now, I think, gosh, that was a creative defining moment because, but you see, this is typical of my economics really. I mean, if I’d been horrendously wrong, which I could so easily have been wrong, it would’ve been very embarrassing to me, but I believed, I believed what I wrote very strongly and I was prepared to take the risk. Rather than saying, oh, it might be, this might be, that might be the other, you know. I wanted to take a decided view.

Sean Pillot de Chenecey (18:02): Okay. And in terms of taking a decided view and standing up for it, to other points you mentioned yesterday that have also seen you, having a view to sort of an array of media, recent media appearances in which you are a sort of a regular guest, Brexit and interest rates oh, dear.

Roger Bootle (18:21): Yes. Brexit. Well, again, this is sort of slightly different because there are clearly, there are sort of political tinges and other tinges as opposed to the straightforward economics. My view on Brexit from quite an early stage was I thought actually, most people on both sides of the debate were wrong. I mean, on the strongly remain side, I think people were wrong. I mean, wrong economically. I don’t mean wrong entirely. You know, I mean, that’s to be debated and I’ve got lots of remainer friends by the way, who are still on good terms with and respect their views. But on the economics, I thought they were much too pessimistic about what Brexit would imply for Britain’s future. And this pessimism of course, infected the UK treasury in the Bank of England. In fact, the whole establishment thought that they’ve even the vote to leave.

Roger Bootle (19:09): Nevermind. Anything else was gonna cause the UK to fall into recession. I thought that was balded dash. And I said, as much, but on the Brexiteer side, I’m ashamed to say, I think there are quite a few people. My colleagues, if you like, some of whom I think have been too optimistic that’s to say they think it’s simply a matter of coming out and suddenly prosperity descends on us all in the UK, like manna from heaven. I’ve never believed that. I think there’re gonna be quite a few bumps, but also I think what Brexit does is it presents to the UK a series of challenges and opportunities and how things pan out depends upon how we face up to those, what choices we actually make. I’m quite confident that we can be better off as a result of Brexit if we make the right choices, but we have to make the right choices. And that’s not, of course inevitable. Although I think after the election, it’s pretty likely.

Sean Pillot de Chenecey (20:06): And I think, mentioning one of the, interviews you, maybe the CNBC in terms of choices that you’re talking about, your belief that, you know, no deal Brexit is the best thing.

Roger Bootle (20:18): Well, I mean, I say the best things always difficult when you use those words. I mean, there’s not the best of all possible worlds. The best of all possible worlds will be one in which we get a deal from the EU, which meets all our requirements. You know, doesn’t cross over our red lines and we get everything we want. That would be the best, but I don’t think that’s very likely, I think, you know, we’re gonna be faced with quite a few difficult compromises. What I mean is that I think, you know, if it comes to it, if we don’t get a deal that meets our objectives and I’ve got no fears about leaving the EU without a deal, but those words without a deal, we’ve gotta be careful here because they’ve changed their meaning because for most of last year and indeed before that, what leaving without a deal meant was leaving without any withdrawal agreement with the EU.

Roger Bootle (21:06): So we say, you’re not getting any of our money. We’re not having any agreements on aircraft, landing rights, academic exchanges, rights of EU national sustain in this country. We haven’t agreed anything literally without a deal. Now that’s all pass a because we’ve got a deal. Boris Johnson negotiated a better deal, which is made a deal, but he’s negotiated a better one I think. They’ve agreed. Parliament’s going to pass this deal. So the notion that we can leave without a deal in that original sense is bonkers. We can’t. So what people now mean when they say leaving without the deal is a much narrower thing. What they mean is leaving without a trade deal. And the result of that would be not that we don’t trade. Of course, we’ll go on trading. It’s just that we trade under World Trade Organization terms. That’s the arbitrary, arbitrating body governing world trade relations. And we impose tariffs on our trade with each other in accordance with those rules. That’s what it means. And I don’t think that’s desirable. I think we can do better than that, but neither do. I think it’s a disaster.

Sean Pillot de Chenecey (22:12): Okay. And in terms of the other issue the, whatever the sword of damage leaves, everyone said, interest rates go on then.

Roger Bootle (22:23): Well, this is a always been a fascinating subject to me. I mean, I referred earlier on to my first period of employment outside university when I worked actually at the market and believe it or not there I was. First of all in the Euro dollar market and then subsequently in the Sterling into bank market. And I was dealing in, into Bank Sterling, a Four City Bank Sterling book. I was putting money out and taking money in to balance the books at the end of the day. I had a really live interest in interest rates and the mechanics of them and in the factors that affected policy, interest rate policy and the positioning by the banks throughout my career. This is if you like being my leading subject. And I brought off some, I think it says in modestly, some pretty amazing coos on interest rates.

Roger Bootle (23:12): And I was one of the few people to have said that they’re gonna come very, very low. When I said early on after the financial crisis that I thought they would reach 2% and stay there for a decade, which many people thought was bonkers. Well, of course in the end I was wrong, but I was wrong. Cause I didn’t go low enough.

Sean Pillot de Chenecey (23:33): Yeah. Yeah.

Roger Bootle (23:36): Yeah. Now I’ve got a decided view now. Now that everyone in his dog is of the view that this very low level of interest rates is here forevermore, my view has changed. I think we’re not far off a period of higher interest rates. Not that I think they’re going back to anything like they were before in the seventies or eighties or whatever, but, I don’t think they’re gonna stay at these emergency levels for much longer.

Roger Bootle (24:01): Well, I got remember quite why we got this low. And in the UK, the current level of official interest rates is three quarters of a percent. Now, just to ram home how low that is from 1931 to 1951 interest rates, official interest rates in this country were 2%, which was the lowest ever. And that level was brought in, in reaction to the great depression and the Wall Street crash and the, all the crisis of the 1930s, the departure from gold and so on and so forth. That was, you know, desperately, desperately low, the lowest ever in our history. And we’ve currently got a rate of three quarters of 1%. Now the emergency that came on us with the financial crisis 2007, 9 has thankfully passed. And although the recovery is not impressive, there is a recovery and we should be gradually getting back to normal and over that’s one reason why I think rates are should rise.

Roger Bootle (25:03): I think they will rise, but something over and above that, increasingly I think it’s come to be recognized that rates this low, this ultra low aren’t necessarily doing very much good and they could be doing quite a lot of harm. And the harm comes from the distortions to economic activity that occur when you’ve got interest rates so low and money is well not quite free, but actually there are some countries where mortgage rates have been negative. Can you believe it? Banks have actually paid you to take a mortgage out? I mean, this is, this is absolutely bonkers. And of course, a number of countries you, and you’ve gotta deposit with the bank. You now actually lose money. You pay them to hold a deposit with them. This is a mad world. And I think in some ways it could sow the seeds of the next financial crisis. So this is the second major factor here. I think Central Banks, well, they know this the more and more coming round to the idea that it’s not a good, a good notion to be sustaining these interest rates for very long. And that we’ve got at some point before, too long, make a return back towards normality.

Sean Pillot de Chenecey (26:08): Obviously fascinating. Can I ask again on that point, alluded to earlier on about the sort of things that interest you personally that may well not have anything directly to do with economics or indeed politics. What is it that gets your, that sparks your imagination, that gets your interest? So what have you been reading or watching over last year or so?

Roger Bootle (26:32): Well, I read a lot of history. I have to say, my some economic history, but quite a lot, not economic history, mean straightforward political history or indeed social history in terms of things to watch, I’ve been absolutely bowled over by The Crown I didn’t think I would be, it was my son who pretty much forced me to see it. I was poo pooing. It, I don’t wanna watch all that. You know, he said, Dad, you absolutely must see it. And there’s several things that I think are absolutely wonderful about it. Obviously rehearses the history, some of which I knew and some of which I didn’t, but just the brilliance of the acting and the production values. I mean, absolutely wonderful, wonderful, wonderful must have cost a fortune to me and that all, you know, weaved together with the history, I think has made a wonderful entertainment. So I’ve been watching that and can’t wait to see the new series.

Sean Pillot de Chenecey (27:21): It has been quite extraordinary, and in two nights ago, the Golden Globes, Olivia Coleman I think very few people myself included didn’t really couldn’t really see how she’d, sort of, I think she was actually fantastic. She act,

Roger Bootle (27:33): She incredible. I mean, I’ve seen her in a number of different roles. I mean, that’s the market course of a tremendous actor, isn’t it? You know, I mean, sometimes you see actors who are really, really good, but they’re always playing themselves. I mean, John Wayne was one of, he was always playing wasn’t he, that I can’t imagine him doing a series of very different roles, but Olivia Coleman, I mean, she can do almost anything,

Sean Pillot de Chenecey (27:52): But, and also in terms of them sort of selling global rights to something that as you were saying, may well have many people may have assumed is going to be quite frankly, not an overly interesting story from a family that on the surface are hardly sort of a Sparky characters. And yet obviously, obviously when one sees the absolute chaos going through that family over the years and all the things that any family has to deal with, along with all the extraordinary things they hear to deal with is quite phenomenal.

Roger Bootle (28:23): Yeah. I think it’s an interesting mixture, really, if some people, but like myself, I suppose, older people who’ve lived through a lot of these events and remember, oh, I don’t remember the coronation, thank goodness. But it was in my parents lived through all that and the abdication crisis and so on a combination of people who’ve lived through the events and therefore are very interested in them with younger people, like my kids who obviously haven’t lived through them and are absolutely fascinated. And as we’ve been watching it, and these last few weeks, they keep saying to me, Dad, did that really happen?

Sean Pillot de Chenecey (28:52): Well, I mean, those issues in terms of, in terms of, you know, your specialist, subject economics. And, you know, Dennis Healy, zooming off to the IMF cap in hand and then famously turning back at the airport and all the rest of it. I mean, just extraordinary days.

Roger Bootle (29:04): And there was fascinating stuff about devaluation which I remember very well in 1967 under the labor government led by Harold Wilson. My middle daughter actually studied economics university and we were listening intently to the justification for why we had to devalue on what the consequences were and so on. And of course the economics must say, of course, I think the economics much of it was totally dreadful and awful. But that, wasn’t a, an adverse comment on the show. It’s a comment on the level of thinking in the government at the time they were saying, oh gosh, you know, if this would happen to the pound, you know, London would be finished. Britain’s position in the international economy, our prestige would be severely damaged. Anyone who knew any history knew that was Boulder Ash. And when you go back to 1931, when Britain came off the gold standard. So my daughter and I were sort of, looking at each other and grinning thinking that this is a very bad economics.

Sean Pillot de Chenecey (29:58): Can I say drawing back to the world of, the world of conferences and speeches? One thing I was fascinated at recently as, in terms of, you mentioned things like the issues around the environmental crisis. The climate change, et cetera, and the impact on business, and then the impact on, you know, the economy, obviously, both being entirely interlinked. I thought it was fascinating recently, that we’ve seen people like Extinction Rebellion, being asked to give talks in the city about their viewpoints on where this is all going. And I think it’s interesting to see something like, you know, what some people may have considered a year ago to be a, an extreme pressure group. I personally, I have a great deal of respect for them, but, some people absolutely thought they’re an extreme pressure group being absolutely welcomed into the world of think tanks and the world of the management consultancies and of the banks who were saying, what is going on, you know, how is this gonna impact our impact on us? And so I think that is see, I think it’s fascinating how hardheaded economists are listening to people like Extinction Rebellion going, right. How is this going impact on the obviously part of the environment on the economy? How is that gonna impact political policy?

Roger Bootle (31:13): Well, I don’t find that so surprising actually. And in many ways, you know, it’s a reaction against the focus of business and financial business, I guess, perhaps economics itself to narrowly on reported income, money GDP as though that was some sort of reasonably reliable indicator of welfare, and we’ve known for decades, more than half a century that it isn’t. And of course there’s a whole brand of economics devoted to that particular subject. So it’s always been there. Let’s say people thinking that actually business maximizing their profits within the law. But in accordance with the price structure that’s thrown up at them, isn’t necessarily gonna lead to human happiness, or ultimately of course, survival what’s happened, I think is that that stream of economics has already, already always been there, sort of moved more towards the center and it’s become more recognized by businesses.

Roger Bootle (32:15): Even of course, energy ones, especially energy ones. They have to take account of these environmental factors, but I’m not completely surprised by it. And then also of course, it does grow out of what many people I must have thought was an even more surprising thing after the financial crash, there were mass protests in the City of London and also in the financial district in New York and various other places against the capitalist system. Now I think a lot of what the protestors were talking about from my own point of view, I thought was dribble but there was more than a grain of truth in what they were saying. And you actually found quite a few prominent bankers and central bankers taking seriously, the idea that there’s something wrong with the system. Of course, there was something wrong with the system to produce the gushly crisis and crash that we had. And also of course, what so many of these protestors were in my view correctly protesting about was that those people who’d helped cause, or least contributed to the crisis and the crash, most of them seemed to have got off Scott free, whereas millions of ordinary people suffered the consequences. And that was a view that was echoed and supported by many senior bankers and central bankers.

Sean Pillot de Chenecey (33:26): Well, I remember, I think it was two years ago as we begin to draw to a close, I think the head of Goldman Sachs at Davos, in one of the key note talks there was talking about, you know, the next big thing was, you know, taking the issue of community and an ethical stance, absolutely centrally, as you just alluded to that it wasn’t, business wasn’t purely about an solely focused on providing shareholder value. There was a bigger story at play here. I think it’s fascinating the way that that argument has gone, you say sometimes from the fringes more to the center, and also from the more forward looking economist and policy makers as being something that is actually central to,

Roger Bootle (34:11): Yes, I’m worried about that by the way. I mean, recognizing that there is an awful lot more, to life and the world than money and recognizing that business can sometimes be led astray by the wrong price signals and incentives and so on and so forth. I’m actually wary of this idea of businesses trying to conduct their affairs on the basis of some sort of wooly pursuit of the welfare of stakeholders in general, whatever that means. I believe still in the profit motive, I think the key thing is to get the interests and the prices properly aligned. So prices for energy and pollution. All these things must reflect wider considerations in society, the dangers and costs of pollution and running out of resources and so on and so forth and businesses therefore must react to a diff, sometimes to a different set of prices than the ones that would rule in a normal market that was untraveled.

Roger Bootle (35:06): Then there’s also the very notion of shareholders and the way they act to restrain management. I think this part of the capitalism is quite frankly, completely broken. I mean, executive pays utterly bonkers. The I’m gonna sound like a real lefty now, which I’m not, utterly bonkers. And I think this is interesting again, through the lens of economic history. You see these different, I remember at school and we had a few left wing teachers and, one of their targets used to be these sort of, I imagine ’em in top hats, top hated Victorian entrepreneurs, BlackRock coats, and the going round sort of, you know, with the, what was the, with the whip hand in these gassy, satanic mills, making sure they were as absolutely actually now I look on these top hated Victorian entrepreneurs as heroes. I think they were the great heroes of the 19th century.

Roger Bootle (35:54): So many of course of them were imbued with values other than making money in Britain. A lot of them had very powerful civic values and religious values too. But one, I think was particularly interesting is that as owner managers, they, of course always had the long term view. It wasn’t just them. It was their families. So the notion that they’d maximize profits over the next three months, or next three years is bar, of course they didn’t, it is the separation of ownership from control. And then the attempt to try to get over that by ridiculous incentive packages for managers, which frankly incentivize them to drive up the share price in the short term, this is, I think is a fault line running through capitalism. And if we don’t fix it, I think the future could be very dangerous.

Sean Pillot de Chenecey (36:40): That’s fascinating. And I think that’s really, really fascinating point about taking a long view is also something that Simon Sinek and his new book talks about precisely this, that taking a long view and not acting on that has be said that horrendous sort of three months, three months quarterly cycle. And, you know, and your only world is the opposition those around you. He’s like, no stop, stop, stop, you know, calm down, you know, be, have some authenticity, have some integrity, you know, just think on a long term basis and all the rest of it is absolutely absolutely key. Well, look, I think, unfortunately we’ve just about run out of time and I could very happily spoken with you all day. Roger, it’s been fascinating that before we finish off, I just want to make sure that the Speakers Associates audience, whether they’re listening in Beijing or Rio or New York or Helsinki, et cetera, I want ’em to be absolutely crystal clear about exactly what it is that you’d like and to take out of this. So perhaps if we could just finish off with you, just giving us a couple of minutes of your really, really of the key points that you’d like to get across to ensure that they are crystal clear about exactly why it is they should get to you to give a keynote talk at the

Roger Bootle (37:49): Right. I’ll give you a thumbnail sketch of some of my major calls and views at the moment, firstly, on artificial intelligence far from being a threat, it’s a boon. It’s gonna be a factor that’s going to boost economic growth. It’s gonna propel humanity to much higher living standards. I expect people actually on average to choose to work a bit less I’ve endorsed in the book, the idea of the four day working week as being the norm and the shape of employment. A lot of it’s gonna change towards satisfying the human need to make the most of leisure time, but I’m very, very positive about AI and what it can do for humanity. I’m not at all positive. I’m afraid about the future of the European union. I don’t think it’s gonna last, I mean more narrowly. I don’t think the Euro’s gonna last. And that really, I think will be seen to have been an integration too far.

Roger Bootle (38:36): It wasn’t necessary. It was done in a botched manner. And in the end, I think it’s gonna undermine the European union itself. And just as I think happened with the Soviet Union, I’m not suggesting the EU, anything like as bad for humanity, the Soviet Union was not at all, but just like this other union, people came to think of it inevitable and they couldn’t get their head around the idea. This was a temporary phenomenon and its day would come. And that’s what I think has happened with the EU. People haven’t thought fundamentally enough about the fault lines. I don’t think it’s gonna survive. More narrowly in the UK. Brexit’s gonna be a success we’re gonna do well. We’re gonna strike trade deals with various countries around the world and Britain’s gonna strike out on its own. But in cooperation with people global Britain, we are going to do very well on narrow economic things, interest rates and inflation.

Roger Bootle (39:27): I wrote the book Death of Inflation. It’s still looking pretty mangy at the moment actually but that doesn’t mean to say that it won’t ever at some point or rather be resurrected. I think in some countries it will be, but more particularly interest rates. I don’t think we’re gonna carry on ad nauseam with these ultra low levels of interest rates in some cases, negative. To some point in the next few years, I think in more or less all Western countries, we’re gonna see central banks starting to move these rates back towards normal.

Sean Pillot de Chenecey (39:56): Roger Bootle on that note, thank you.

Roger Bootle (40:01): Thank you.