princ [Music] how about start with last night presidential debate how did you find it I was encouraged like most Americans we don't know camela Harris very well and I thought she did was very poised and stood up very well to The Bullying angry man on the other side of the debate she really provoked the Trump I think she certainly did and he couldn't stop himself being provoked which is he doesn't have a lot of self-control in that department M your book is released in Korea and name is good economy and bad economic how could you define what is good economy well it's a little hard because you know my definition might be different from someone else's and but I wanted to make the impression that economists actually know a lot and you know we've learned a lot over the subject's existence for 150 years maybe 2 years but I think in recent years we've applied it very selectively and that we've made a lot of mistakes by using some parts of economics and

ignoring other parts, my old friend Tony Ainson, who's no longer with us, used to say that what is really important is that the economy should serve people and not people serve the economy. And I think a lot of policymaking over the past 30 or 40 years has been about the economy. People have to be subservient to the economy instead of the economy doing things for people. I think you have already answered, but what is the biggest mistake in economic history? I don't want to go back in the whole of history. I mean, we're not going to talk about the Irish potato F or something like that. I think in recent years, the financial crisis certainly changed the minds of a lot of us. And there was this, I think, overly strong belief that markets could do just about anything and that we should leave markets alone and not mess with them. And that if some people got very rich, that was okay because in the end, that would help everybody else. This is a trickle-down, as it were, and I think

After the financial crisis, it's really hard to believe in trickle-down anymore because the people who caused the crisis got really, really rich, and enormous numbers of people who were hurt by it were never compensated for that. So, I think that's been part of it. The other part for me, at least, is just being the work that Ann and I have done and Case and I on looking at what we call deaths of despair. So, even though the economy might be doing okay recently, there's still an enormous number of people dying from drug overdoses, from suicides, from alcoholism, and things that are not really happening in nearly all other countries around the world. So, we may be doing well in money terms, but we're not doing very well in life, and life is very important. You know, if you're dead, money is not worth very much. Was there any strong motivation you start to interest in kind of death? Well, I've always had an interest in demography, and so I've always been sort of amateur in thinking about these things. You know, the most recent work

We really came across by accident, and then putting it all together, and sort of you've got this financial crisis at the same time all these people are dying. So that, you know, people in America who don't have a 4-year college degree are living shorter lives every year, which is not happening to the people who have a college degree. And only a third of people in America have a college degree. So this economy is not serving people very well, and there's a lot of very angry people who are represented by a very angry man on television last night, you know. And so you can see why some of that motivation is coming from. But these days, someone said they are helpful to control inflation because of their low wage. I don't think that's the case. I mean, I think inflation has to do with many other things, like controlling the money supply and so on. So I don't think we can cure inflation on the back of poor people by saying you have to be paid even less. So that's a complicated question, but I don't think it's true.

that paying poor people more. I mean, you know, if you look at the period, the 30 years after the war, you know, there was a lot of common prosperity and a lot of people getting rich or richer together, and there was almost no inflation during that period, so that can be done. The pandemic is a crisis. Yeah, the US Government had a very aggressive fiscal policy. It was very helpful to boom up the economy, but it caused a side effect like inflation. So how could you evaluate the government policy? It's hard to put yourself back in that situation. You know, Korea had a very aggressive policy from the very beginning, and not that many people died there as a share of the population, whereas here people were very, very frightened, and here in New Jersey they were building emergency morgues to store bodies in. So, you know, it was pretty bad. People were very scared, and there was really concern that the economy would shut down altogether, and so you had to take strong fiscal measures to try to prevent that. Those measures were voted by almost

unanimously by the political parties. So, you know, this was not Democrats versus Republicans. This was just about everybody spending that money. Other countries did similar things, maybe not quite on the same scale, but similar things. And as to inflation, there's no doubt that some of the spending, the fiscal response by the Biden administration at the very end, may have in retrospect looked like it was too generous. But I don't think the fiscal posture of the US government is a major contributor to inflation. I mean, the inflation was due to supply chains breaking down. You know, you couldn't get anything. The ships couldn't discharge. You couldn't get motorcars. There were years' waits for not years' weights, but months and months' waits for. They could not expect war or something, right? And if you look at the inflation, it was similar in Europe. The US was not sending checks to Europeans. Yeah, right, certainly not. So, you know, you have some other explanation for it. And this happened to a lot of countries, and it's much, I think, much

more to do with the fragmenting of supply chains during the pandemic. I know this is a very stupid question, but I really like to ask you, did you expect inflation when the pandemic began? I think we were focused on other things, like people dying, and I'm not someone that thinks a lot about inflation. That's not the sort of economics I do, but I was not surprised by it. And the lack of surprise, I mean, it just seemed fairly obvious that if you can't import gas or you can't import cars or you can't import a lot of stuff that we import, then its prices are going to go up. In your book, you refer to the increasing the minimum wage does not affect negatively to employment. I wouldn't put it quite as unqualifiedly as you put it. I mean, that I think if you made the minimum wage $60 an hour, it would certainly have an effect on employment. But the sort of things we're talking about between $7 and a quarter an hour is now up to, say, $15. I don't think these

would have, and I think there's pretty much wide acceptance. I mean, Britain has had a minimum wage since the days when Tony Blair was prime minister, and it's been studied by people on the right, people on the left, people all over the place, and I don't think anyone has come up with a good case. It's been, it's reduced employment. Do you differentiate between labor and union? Yes, well, not all labor are in unions for one thing, and in fact, in the private sector in America today, only 6% of working people are in unions. It's much higher in the public sector. America would be a better place if private sector unions were more widespread and more powerful. In Korea, for example, one certain company has to get permission if they want to new factory abroad. A lot of company try to leave the our country because of high wages. I think the us there is the same thing happened like a lust belt. Yes, but I don't think you can blame the Rust Belt on high wages. If you look at what's

happened to wages throughout the whole period when the motor industry was falling apart. Those wages were going down through that period. Maybe they should have gone even faster, but you know, a lot of it had to do with exchange rates, with the US running a huge deficit, tax cuts that made no sense, and I don't think people fully agree on all of what handed that, but there was a very overvalued dollar exchange rate, which made it very difficult for exporters to export and very easy for importers to import. Um, and I think that had a lot to do with the creation of the Rust Belt too. So, I wouldn't put it B on unions. I think the unions have done badly because they've done badly. So, you know, if they're not very good at increasing wages and working conditions for their people, then people don't see why they should join Union. You said in your book economics has to return to the philosophy. What kind of philosophy Economist to should focus on? Well, I think they could focus on different

strands in philosophy. I'm not laying down a particular philosophy that people should believe in. You know, when I was a student and starting out in Cambridge in England way back in the late 60s, early '70s, there was a lot of debate with philosophers and economists. Amartya Sen was there at that time. I remember we sat around and discussed Rawls's new book, The Theory of Justice, which had just come out. We used to have a subject called welfare economics, which was studying the well-being of people, and that is not taught anymore in any American graduate program, for instance. So students and professional economists really don't know anything about it. They have a sort of half-understanding of utilitarianism, but there are other things out there, and they don't know about them. And I think they take this very narrow view of human well-being, which is to do with how much you spend, and that's a terrible way of thinking about things. And none of the major philosophies would endorse that as an objective. What is the most important

thing you want to deliver through this book. Well, I mean, I think you know health is a big part of it because the minute you start thinking about what matters to people, then money might be important, but so is health. And then the other thing that's not often talked about but is incredibly important to people is family and relationships with other people. So, one of the things that happens when people lose their jobs, especially if you close down the town as an effective unit, is they lose a lot of relationships with people. There's this phrase that RS used called the social basis of self-respect. So, if you want to respect yourself as a human being, you have to be related to other people, you know, you have to matter in your community. And these things are really, really important, and economists just blow that away. I think, you know, they'll say, Yeah, sure, but they never do anything about it. And when they're looking at trade deals and so on, all they're doing is adding out benefits and costs in money terms and not bothering.

about the rest of stuff in Korea during the pandemic period. People started to be interested in the US Stock Market increasingly. They are starting to be more and more interested in the US stock market, and then they are starting to be interested in US politics, which president is going to be a good leader for Global foreign policy. You're talking about the stock market. A lot of people seem to think that if the stock market goes up, that shows there's a good economy. That is awful complete nonsense, right? I mean, it's good for people who own stock. Most Americans don't own any stock. We usually think stock market equals economy situation. Well, that's ridiculous. Let me give you an example. Let's say a big Airline finds some way of firing half of its staff or reducing its wages by 50%. Stock market immediately goes up. What about the people who just lost their jobs? You know, this is terrible. What the stock market is, is the valuation of capital. So, the stock market does not respond to the value of labor at all. US Stock Market has jumped up a huge

jump. Do you think it can represent the US economy these days? Not that huge jump is mostly driven by artificial intelligence, and during the pandemic, it was mostly driven by the upward evaluation, re-evaluation of high-tech, because people didn't watch Netflix all the time before the pandemic, and they do watch Netflix all the time or whatever, right? So, that made Netflix a much more valuable company. But that's what it's about. It's not about human well-being, you know, let alone the things I were talking about, the relationships and people's lives and how they get on. So, do you think there is some bubble these days in the US market? I'm not an expert on that. The economists have been fighting over whether bubbles can exist forever, but you said we have to be careful. Well, it's just that the stock market is very good if you own stocks, right? And if you're a capitalist, own capital, you know, the stock market tells you what that's worth, and everybody likes to be rich, and no one likes to be poor, but it's irrelevant for

the vast majority of Americans very silly question and wise answer thank you so how about the which president can be a very good Global policy leader foreign policy leader well I mean if if we're talking about Trump versus Harris you know you might have your doubts about Harris and about her experience in foreign policy but Trump is not someone you'd want to put in charge of anything I mean the one thing that I think is really genuine about him is he doesn't like these endless Foreign Wars and I agree with that I think it's been too easy do you have or do you want to say something to Asian reader including Korean people Beware Of The Economist [Laughter] [Music] [Music]

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