Talking about... radical change with Ian Goldin

Nik Gowing

Welcome to talking about thinking the unthinkable our leadership conversation and webcast. I’m delighted to welcome Ian Goldin, who is a professor of Globalisation and Development at Oxford University, who leads the Oxford Martin programme on the future of work, technological and economic change and the future of development. He’s been a vice president of the World Bank, and worked at the European Bank for Reconstruction and Development, and the OECD as well.

The main reason for inviting him is that he is the author of this book Rescue published in 2021and in paperback in January 2022. Subtitle, here it is, ‘from global crisis to a better world’. The wrecking ball of Covid-19 has destroyed global norms. How has leadership coped? We’ll discuss ways forward shortly. But let’s see optimism and a positive message as well to inspire at the end. But first, your analysis please rescuing who, from what?

Ian Goldin

Thank you very much, Nik, for having me in your podcast series, participating in your Thinking the Unthinkable, which is making such tremendous progress in helping people to think about these big structural shifts and that’s what we’re going through at the moment.

The pandemic has changed everything in our lives and government behaviour. And it provides an opportunity to rescue us from what we had before, from business as usual, from that system, which is leading to catastrophic climate change, rising inequality and which brought us the pandemic. So rescue from the inertia we were in to create a sustainable, safer, more predictable and more equitable world.

Nik Gowing

Do you think people need to realise they need to be rescued?

Ian Goldin

Yes, I think so. The language that people use worries me. For example, bouncing back or bouncing forward implies that we’re going to go back along the same tracks we were on before. But this is the track that’s leading us over the cliff edge. This is the track that has brought us the pandemic, that is bringing us climate change, that is leading to the structural problems. We have the rising tensions, etc, geopolitically. So I think we do need to realise that going back to business as usual is not what we want.

When the World Economic Forum talks about the Great Reset, it’s implying that we go back to reset of the operating system we’ve already had before, like we do when we reset our computers. But we don’t need the operating system we had before, we need to do things very differently. And so my hope is that we’re going to be rescued from that inertia, that the pandemic is the wake up call we need - as happened in the Second World War - to do things differently in the future. And if we don’t see this as a great wake up call, then I’m afraid we are doomed to more pandemics, which could be even worse, and to increasing crises of a wider variety.

So we certainly need to be rescued. Rescue means we live to fight another day, we live for an opportunity to do things differently, as when we are rescued from a shipwreck. Doesn’t imply we have necessarily a safe future. Now we need to make the choices. What are we going to do to create this better world?

Nik Gowing

Why do you say our system is built on what you call shaky foundations? So building back on unstable foundations, as you put it, guarantees future collapse. Guarantees, you use that word.

Ian Goldin

I believe that while globalisation has been the most progressive force in history, brought immense benefits to more people more quickly than things before, it’s also inherently unstable.

The more people with more wealth, more connected, means that not only good things travel, like vaccines, like good ideas like the ‘Me Too’ movement and others, but also very bad things like pandemics, like the super spreading of all sorts of shocks, financial crises and other and the unintended consequences of this progress, leading, for example, to escalating climate emergency to antimicrobial resistance and to many other negatives.

So unless we do things differently, we inevitably will face crises. The butterfly defect of globalisation is this inherent instability and the faster we go, the wealthier we are, the more unstable it is. So we will inevitably 100% have more pandemics, have climate crises, have other financial crises and other emergencies unless we do things differently.

Nik Gowing

You issue a warning. You say roads are leading in irreconcilable directions. There’s a huge danger. You warn of complacency, quote ‘unless our societies operate in a fundamentally different way’. Do you think the people around us, you and me, where we live, the kind of lifestyle we live, really can be changed? That there is an awareness of just how profound this is?

Ian Goldin

We know we can change. We’ve changed many times before and we certainly changed over the last two years.

If someone had told us in January 2020 sorry, you can’t see your friends, you can’t fly, you have to wear a mask whenever you go into a public place, we would have thought we lived in a totalitarian state. We have changed our behaviours in ways that would have been unimaginable in January 2020. And not only we - people around the world, and governments.

If the Conservative government had said in January 2020, we’re going to increase that by a record amount in peacetime. Well, everybody would have lost power and the leader would have been replaced. Now there’s a cross party consensus that was a good idea. The question is, how much in the detail and when to stop and so on, but not whether to do it.

If they had done many other things that they’ve done in January 2020 it would have been regarded as inconceivable. So, we can change our behaviour. Governments can change what they do very quickly, and that’s happened historically at times, like in the Second World War. The question is whether we’re going to continue in this way or revert back to what we were before.

Nik Gowing

You do say, quote ‘Covid-19 has shattered the mental mirrors that have prevented us from breaking from the past and embracing new horizons’. In other words, there’s a mental blockage there to understand what you’re saying.

Ian Goldin

Yes, I mean, I’m an economist, you know, economists are amongst those that had very rigid rules about what governments could do. For example, if you increase debt by over 100%, you’d have a debt crisis, where we know that that’s not the case. The sort of monetary policy that we’ve engaged in in terms of printing money would lead to hyperinflation. We know that didn’t happen.

So we all, within our mental constraints, thought things were not possible that we now recognise are perfectly plausible and doable. And so there has been a shattering in what we’ve done, the sacrifices we’ve made, the extraordinary sacrifices that not least the medical professionals and other essential workers that put themselves at risk for us have done.

We can do this in peacetime. And we can do it very quickly if we believe it’s in the common interests and our interests. So that is a big big recognition that there has been change and we can change. The question is now what do we do with it? Do we use this to create a better society and better world? Would we revert back to where we were, in which case we in this inevitable spiral of more crises?

Nik Gowing

Now, what about the ability - I said at the beginning, we want to be positive as well - what about the ability of leaders and everyone at every level to grip the enormity of what is happening because you say, the pandemic has shattered oppressive taboos. But you also say, as we do it at Thinking the Unthinkable, that big ideas require big thinkers and the importance of - you use the word as well - maverick ideas here.

Disruptive times call for innovative solutions and attitudes. Have you in many ways been surprised and impressed by the way people have responded, those who have been able to?

Ian Goldin

What we’ve seen is one huge natural experiment around the world. We can compare different countries, we can compare different leaders, we can see what businesses have done. Rather like we can see with climate change and what the response to the climate emergency is. But with Covid-19, we’ve been able to see that some countries have had very low infection rates, have had very low death rates, and have coped with it economically and medically in much better ways than other countries.

It has been not only democracy, autocracy. Some autocracies have done terribly, some have done well. Some democracies likely the UK, like the US, like Brazil, have done terribly, and others have done much, much better. Those led by women, incidentally, have done much better. And so we can see that choice of leadership really matters. Really matters for the well being of the societies.

And we’ve seen this in the UK with the Gray report, how people didn’t even walk the talk that they were doing in the press conferences, in their own houses and gardens. This matters. It matters for public trust, it matters for health. whether people believe the leaders and follow the norms that are being set. And it matters for all of our health. We’ve recognised that we can only be as healthy as our neighbours and the person next to us on a tube, public transport or in a hospital ward. And so I hope that this will lead to wiser choices in the future. We haven’t yet seen the political consequences, although we did see this in the US. Would Trump have not been re-elected if it hadn’t been for Covid? I think I would say almost certainly, he would have had a much better chance of re-election.

Nik Gowing

Let me just put to you one of your quotes which really has intrigued me about ‘what I’m proposing is far less scary than business as usual’. Because most people think they take refuge in the way they do things and the way they’ve been brought up to do things. But what you’re saying is not the way people naturally, including leaders, see things. “What I’m proposing is far less scary than business as usual.”

Ian Goldin

Yes, Nik, we all, I certainly would include myself in this, are scared of change. We prefer the comfort zone of what we know about. We prefer, you know, incremental and slow change, if change at all, to radical change. The term radical or even revolutionary change worries a lot of people very deeply. But I think we need to recognise that if we don’t change, we are doomed. And that’s why it’s the scariest thing.

If we don’t change, we’re going to have more pandemics, we’re going to have more climate extremes, we’re going to have more inequality, more financial crises, and geopolitical tensions. As our societies become more unequal, they become less cohesive. And that leads to more protectionism and nationalism, and slower global growth and rising geopolitical tensions. These things are all intertwined.

I am recommending that we move radically and rapidly to a system which is more sustainable, more predictable, has less crises, is more equitable, has greater social cohesion, that produces nationalism protections, and we have higher growth and less geopolitical tension. So that feels a lot less scary to me than where we are heading if we don’t make that change. And that’s why I’ve come, you know, it’s taken some development of my thinking on this, to the conclusion that radical change is something we should embrace with comfort, and much more comfort than the status quo.

Now, the danger is the wrong radical change. Just like status quo is dangerous. I can imagine some radical changes that I would be scared of. And that’s why people from around the political spectrum, centrists need to embrace it. Why intellectuals need to deepen their understanding of what changes are required, and why we need to ensure that this change does not become, as many radical changes have in the past, the basis for extremes, but change which leads to a system where we stop the next pandemic. And that’s absolutely possible if we devote the resources to, where we ensure our societies are more cohesive, I believe, is a sort of radical change we should be embracing.

Nik Gowing

And of course, you’re lucky you’re not a politician. And you’re not a corporate leader. You have the luxury of working out of the Martin School at Oxford University, you have that kind of protection around you. But how do you persuade those who are running companies, those who are running countries, those who’ve got to get re-elected on the election cycle - three years in Australia, maybe up to five years in a place like the United Kingdom? How do you persuade them that they have a need and an obligation to rescue in radical ways in the way that you’ve been discussing? Because that is a damn difficult thing for many leaders to actually encompass.

Ian Goldin

Well, I have a few scars on my back from my time working with President Mandela and and at the World Bank in this regard, and also on various corporate boards, so I don’t think I’m an idealist.

I think the lesson I would point politicians to is that of Winston Churchill. And I know the Prime Minister of the UK, don’t know how long he’ll stay as the Prime Minister, Boris Johnson, likes referring to Churchill. Churchill was swept away, of course, in the biggest landslide victory Labour’s ever had. Despite Churchill being the war hero. And this really has puzzled me and I spent a lot of time thinking through how was it possible that six weeks after the end of the war, the war hero could be deposed? And the answer was he wasn’t radical enough. He would not embrace the fullness of the Beveridge report, and what it implies, the creation of the National Health Service, of free education, of providing for the troops coming back from the war a better guarantee of a better life.

And that’s what I would point politicians to - don’t underestimate the public’s appetite for change.

If you have a credible, believable narrative around what that change is leading to and why you need it. That’s what’s important is the narrative. The credibility, of course, the ability to finance it, and take people with you. But don’t underestimate. And when you look at the opinion polls, and I cite these in Rescue - 97% of people in many countries don’t want to go back to business as usual. You know, the lowest is, I think, 70% in the US if I recall. These are high numbers. So using the public as an excuse not to set out the progressive agenda, especially if you say that we’re going to do the following things to stop pandemics. We’re going to do the following things to stop financial crisis. We’re going to stop the following things to stop escalating climate change. And we’re going to do the following things to stop people evading taxes and pay a fair tax.

I don’t think that is anything that people will toss out. You have to win the financial arguments about being able to finance this without a hyperinflation and so on. But I think if one thing that two years of the past has taught us, it’s that, that we can finance these things, and that they are doable. And that’s across the political spectrum. So that’s for governments, we can come to businesses in a minute.

Nik Gowing

We need to do that. We’ve got about five minutes left. But let me ask you, because you are an economist, but you make a point about unhealthy addiction to economic growth. Unhealthy addiction to economic growth as the only or best measure of progress. And the British Academy recently, for example, has done a very extraordinary examination of the future of the company, saying that actually companies should be about helping solve problems, not create problems.

Do you reckon there is really an appetite - really an appetite - to change the fundamentals of the economy? Because you also make a point about the curse of inequality, which is where the poor are going to get poorer, much sooner?

Ian Goldin

I think there’s a widespread understanding that this is an issue. You see it in all the citations. It’s even politicians speeches. They all claim to be doing something about this, and caring about it. So obviously, there’s a political touchpoint there. And there’s a business one.

I mean, everyone is jumping on the ESG agenda. And there’s a real danger of greenwashing. You know, what is the connection? All companies are saying, we’re doing the right thing now on climate, on people, etc, on diversity. Are they? And drilling down into it? So I think the mood has shifted, and what was acceptable even five years ago in many areas is totally unacceptable now for a public facing company or politician.

The question now is deliverability, and holding people accountable for what they’re saying. And that’s where I think there’s a lot of work to be done in, including by the media, in accountability.

Nik Gowing

Lord Martin Rees, who gives you a citation on the cover of your book says: “I would like to hope that your wisdom in [other words, Ian Golding’s wisdom], will influence political leaders.” But are political leaders likely to be backing a change to the economic system, where growth has to be measured in a different way, in ways which can guarantee that the poor are not going to get poorer, and therefore, exacerbating the enormous kind of hollowing out that’s happening at the moment in the world economy?

Ian Goldin

I’m not suggesting that growth or GDP should be thrown out. I just think we need a dashboard of different indicators, which give us a sense of the health of our people, of our system, of our society, and not rely and be preoccupied with one. Life expectancy, mental health, gender equality. There are lots of other things that matter. Wellbeing in various ways, and a lot of countries are embracing this in a different way.

New Zealand’s just embraced this, for example. And the OECD is doing more and more work on this. So I think when you hear politicians speaking, they don’t talk about GDP, they talk about a lot of other things, we just need to make that as a systemic metric that we can actually judge how our government’s doing. And then once you have the metrics, you tend to put the resources behind their improvement. So I think it’s absolutely doable. Companies are also doing this with ESG. And again, what I’m arguing for is let’s hold them accountable. Let’s really know what they’re doing. And whether this is just talk or whether there’s also action.

Nik Gowing

Final thought if we can, Ian. We’re talking where the Covid crisis remains, but it’s becoming potentially more an endemic rather than the pandemic. But that’s before the climate emergency, and the enormity of what’s coming down the track with the UNFCCC warning about essentially breaching planetary boundaries.

My final question to you about whether we are facing something even more profound in terms of what we have to be rescued from? In other words, the real existential challenge now being created by the climate emergency. Do you think political leaders, do you think corporate leaders, do you think the public really get that because the public is now beginning to put significant pressure on the political and corporate class and that this is the next issue we need to be rescued from?

Ian Goldin

I think the climate emergency is absolutely significant. But people that have enough money are able to insulate themselves. Just look at Las Vegas, growth boom in Austin, Texas. These are desert cities. If you have enough money, you don’t worry about these things. And that’s the real problem.

The people that are going to suffer from the climate emergency are mostly in poorer countries. And of course, in low lying areas. Miami, Los Angeles, for example, are extremely vulnerable to this. So the climate emergency is absolutely central for global reasons, not only for national reasons, and we have to move to zero carbon more urgently in the rich countries because we have the means to do so.

Nik Gowing

Do leaders really get the urgency of the emergency?

Ian Goldin

I think some do. But again, they are not having their feet held to the fire. And that’s what we need to do as citizens. We need to say that, you know, in the UK, we have a climate plan, but we’re not living up to it. So all citizens, I think, need to hold their feet to the fire of the politicians. And that’s what Extinction Rebellion and others are trying to do.

I don’t think we can be on one track, I don’t like ranking these crises. The next pandemic could be much worse. And the amount of resources we have to go to solve these problems is not great. In the case of pandemics, we spend more money on one aircraft carrier than we do on the whole global pandemic prevention system. Now, everyone in the intelligence agencies will tell you that pandemics are much greater threat to our lives. So why are we doing this? Why are we completely disproportionate in what we’re focusing on?

And that’s where I think we need much greater attention. So yes, we need to focus more on climate but pandemic can be resolved in many ways if we do the right things, and we can create more equitable societies. These are not beyond the wit of our national governments, or the international system, we just need to get on and do it and recognise our priorities and live up to them.

Nik Gowing

So your message for leaders in 15 seconds, Ian, so you don’t have to write another book in 15 years, in five year’s time, which is, why did no one listen to me?

Ian Goldin

My message to leaders is - one can do it, one has to do it. And for your own leadership, of whether it’s a company or a country, you have to embrace the scale of the crisis that we all face, and ensure that we do things differently in the future. Make sure that you rescue us from this global crisis and help create a better world.

Nik Gowing

Ian Goldin thank you very much indeed for joining us. And let me just say for those watching, we have a transcript, which will be posted in parallel on our website to pick up on everything that han has said . Do please join us when we next talk about Thinking the Unthinkable. From me, Nik Gowing, until the next time, keep thinking unthinkables. It’s both possible and, as Ian says, it’s necessary too.