Let's come back to the US. What do you think of the Trump’s economics policies? What's your view about?
It's mixed. I think economic policy is best done when you have a group of people who are talented, have somewhat different views, have insights into the way the economy works and so on. Given the turnover in the economic team of the White House, Trump has got all of the pieces that he needs. You know, he seems to want to have people to sort of agree with him.
I think his instincts on trade aren't as bad as some people think. There's at least a reasonable chance that he will , until the balance back in favor of working on, although it's delivered with a kind of belligerence.
You went to put people off and certainly put the diplomatic community off. I’m not a fan of arresting people for the misbehavior of companies. I mean we had a lot of alleged misbehavior by major financial institutions and they've paid very large fines in those cases are settled. But I can't think of a case where we arrested the chief financial officer. So I want to be clear. I think there are boundaries that shouldn't be stepped over.
He's not a multilateral store, sure. So he's not going to be helpful with that. But at least changing the kind of rules of the game in such a way that, you know, there's a balance of benefits and costs among the parties. There's a lot of open questions. I mean, how really are we going to get on with the climate change challenge if the united states pulls out of it, then and so on. On the American side, the economy is doing pretty well, but it's benefited a lot from a big fiscal stimulus. That's going to wfall off and we may most of the forecast are we're going to slow down and we do have a fairly large pile of sovereign debt building up in the economy. You know, you can't do that forever. I mean that's true in China, and that's true in the united states. So I think it's a mixed record, but it's had the benefit of a pretty strong economy, and it may run into some slightly greater head winds as we go into the next couple of years.
You know the globalization or the technology has really benefited the top ten and the bottom fifty have not really benefited anywhere. In fact, wide wealth gap has been the source of populism globally, not only in united states, this is in everywhere. How do you see the deglobalization? If globalization causes a wide any of the wealth gap, does the deglobalization change that?
Not necessarily. It's partly because you have the technology influence and the technology is getting more and more powerful. So with various versions of artificial intelligence, you've increased the scope of activities, if not hold jobs that are susceptible to some version of automation. It's also susceptible to making people much more productive because you have digital assistance, you know, that are enabled by these deep learning algorithms. Take doctors for example, there's a massive literature in medicine and biomedical science that doctors probably should read. But how are they going to do that? With the right kind of digital assistant, you can have somebody sort through it and say 'this week these are the four things you really need to read'.
So I think , the job in the developed countries, the job loss side of this equation, has been talked about more than the productivity increasing. My buddy here, you know, which happens to be a computer system. It’s going make me for more productive and it's more complementary rather than substitute. So I think that's where we're going. My personal view is that there are ways to deal with imperfectly. Admittedly, there are ways to deal with the inequality aspects of the growth patterns we've seen and that you have to get on with doing that is a kind of prerequisite for being able to cooperate internationally.
So let me give you an example. France president Macron france introduced, a tax or an incremental tax on on gasoline. That was supposed to be a carbon tax. You know, it wasn't a lot, right? It was a mighty growing over time, and it triggered this massive protest, but now threatens the stability of his government. I think if we try to get on with some of the things that are required to deal with, like climate change, we're going get this reaction. We got it from the people I run out of money halfway through the month is what the yellow jackets are saying exactly. You know, we've got to deal with that first before I’m on board dealing with these sort of longer more challenging issues based on scientific forecasts and stuff. Nobody has a perfect, sort of map for that, but it seems pretty clear: you have to invest even more in people over a long period of life. You have to have real and very high quality training and retraining options, for them and other institutions that support it. And you have to redistribute income and wealth so that people have the resources to make these transitions.
So I’m not totally pessimistic, but we've got a lot of work to do. And I think if we don't get it done, we'll continue to see, anti-elitist, you know, anti-established parties, rising nationalism, populism, sometimes undercutting the ability to cooperate trade off.
There's a reason why people thought in social security systems, you know, it carried to an extreme would have adverse effects on incentives and their debates goes on. A balanced view is yes, society owes you, the resources to have reasonably, a reasonable set of opportunities to be productive, to work, to get, to contribute, to be creative and so on. And so I think in designing this, we're going have to kind of flesh these things out, and the one sided versions of it don't really sort of quite passed muster.
I think there are not perfect answers, but there are ways to go about this that you can tax wealth, right? Without hurting employment. The wealth inequality in some places, including here, is really quite extreme. Now you have to reset the kind of social contract in order to do it, and it's not clear we're going be able to do it. You know, we have a political system in which money is a very powerful part of the equation. So we may not be able to get there, but I think the cost of not getting there is rising economic, political, and social polarization. And then you get gridlock, you get instability in the governance structures, you get poor policy choices, you lose the long time horizon, and that's fatal.
So I think what we're learning is that a more general principle, you know, that if you want to solve a whole lot of problems in a cooperative manner, the first thing you have to do is find a way to, through values, through culture, through a combination of top down and bottom up efforts. You have to find a way to make these growth patterns meet some definition of inclusive even if people don't agree on exactly how much inequality is okay and not.
You mean that even among the countries, there's going to be conflict, we have to change the growth pattern, and we have to probably change the distribution pattern.
Yes. There's some kind of crisis of capitalism. There's a real discussion going on in asia about whether the western so called western model isn't falling apart. That's perfectly reasonable. But my view is that the premise that the start is wrong ,capitalism is not now and never a kind of markets and private sector property. And private investment was never meant to solve all the problems by itself and always had a proper government to make public expression of values and stuff, in the best circstances is working partner.
China is going forward, and there are many challenges and topics to talk about. If you were to look at certain topic that you wanted to really dig deep into it and then had a panel talk with some chinese scholars, what would that topic be and how would you go about it?
The first one I pick is i'd wanna talk with my chinese colleagues and friends about this balancing act. China is positioned itself differently from some of the western countries in terms of the role of the government control. You have a government that still has a very big balance sheet. They've chosen to hold that those assets in the form of concentrated ownership of a subset of the corporate sector. Meanwhile they are experimenting around with cross ownership of assets and other things. So what would like to do is sit down with people who thought deeply about this and this balance, what I call balancing act. So the balancing act as you want to have a degree of social cohesion and control and you don't want a bunch of people flying around. On the other hand, you want a dynamic, innovative company because it's pretty.
In the system, China's policy making process is pretty good at making, what I call mid course corrections, that we don't get everything right every time, but what they're really good at is responding when they kind of missed the target event and moved it back in the right direction. But I think this balancing act is a real challenge. And I’m interested in it because I think we're going have to get into that business too. But I think this balancing act is a real challenge. And I’m interested in it because I think we're going have to get into that business too.
The other discussion I would like to have, is Jack Ma starting an academy in hangzhou to promote research on how economies become digital. And and I'm intrested in can we really understand this? You know, what are the opportunities? What are the challenges? And I at the insight, I think is correct, which is all of our economies are starting to be built on digital plan, you know, not platforms in the technical sense, but foundations. I think there's the chinese experience with other social media economy, and mobile payments and stuff is actually pretty important set of experiences to understand and share.
And I think they're about to produce, you know some early reports that docent this is that the growth patterns that come out of these relatively open platform standard ecosystems of the type that have developed in China, not just Alibaba and financial, but produce growth patterns that have very impressive inclusive these characteristics. You know bringing people that you know aren't really going to have decent retail stores into the economy. You know making it possible for there's this store this some of this is anecdotes but they're impressive. A little town in the south that becomes one of the furniture making centers in China. This is digital technology in one aspect promoting inclusive growth patterns.
And the second thing i'd like to know is how what does it take to apply the lessons of this and the opportunities in other countries, especially developing countries. So not all of them are as big and technologically advanced as China. I don't know if you need a mobile payment system where you have relatively high speed internet connection, mobile internet connection. I know there's payment systems that are based on text messages and stuff in other parts of where the technology isn't as advanced the mobile technology, but you probably don't get the artificial intelligence out of that.
So one of the things I hope comes out of that is that do you need a cloud computing system? Or at what stage with what volume do you need it? Is there an argent, say in africa for pushing these things, but having some general purpose utilities that do some of the things that are probably too expensive for individual countries to do? So I'd like to see it to be part of a discussion of that.