During a recent presentation at the London School of Economics Nobel Prize winning economist and Princeton University Professor Paul Krugman pointed out that “most work in macroeconomics in the past 30 years has been useless at best and harmful at worst”. The road out of the crisis is uncertain. Economists are used to criticize what policymakers do. A handful of them including NYU’s Nouriel Roubini may have anticipated the crash. Where do we go from here?
In 2006 NYU’s William Easterly published The White Man’s Burden, a best-selling title and a must-read in today’s environment. In his book Mr Easterly points out that “the right plan is to have no plan” and that “big plans will always fail to reach the beautiful goal”. This was not the case with the Marshall Plan. I should have double checked with Mr Easterly before naming my forthcoming book “The Monfort Plan”.
Along the road while writing the book I have conducted 220 phone interviews and 270 face-to-face interviews. I felt that among the categories of experts that I interacted with during the last 18 months, academics were most reluctant to speak to someone that has no reputation, no reputation to lose when it comes to proposing a new economic architecture.
We lived financial times. We no longer do. We lived the white man’s burden. In addition we now live the academic man’s burden. A part of academia is reluctant to embrace change. A part of academia lives in an orthodox world and is imprisoned in the prison of thought. Thinking out of the box is not rewarded in today’s academic environment. Orthodox academics have become friends with the pirates of heartless capitalism. We ought to evolve as a society according to their models. Let’s turn the modus operandi around. Let’s turn the status quo around. Let’s adapt our models to the reality of an unequal world, to the reality of a world on the wrong path that will not reach sustainability and the era of global public goods if we do not turn the course of this journey.
I built a list of experts that is reaching 106,000 individuals every month. The list includes 13,000 Senators and Members of Parliament from 35 developed countries and 45 developing countries and 12,000 academics. A subset of the expert community can be categorized as expert dreamers. Only a handful of experts are expert dreamers, true believers that a new paradigm is around the corner. The list of 106,000 experts has helped me identify the expert dreamers of today’s capitalism. Experts can opt-out of the expert list. I have realized that although academics only represent a 10% of the members in the list, a 60% of those that wish to opt-out are academics. Academics are unable or incapable of dreaming beyond their bounds of rationality. Dropping the user’s manual is like giving up your faith or switching sports teams. But we must embrace new ideas if new ideas prove to be realistic and forward looking. But we must implement new policy-making if it proves to be creative and foster an environment conducent to the elimination of extreme poverty and the reduction of inequality.
I have suffered from the academic man’s burden. I remain ignored by one of the many categories of the expert list I have built up. Academics are laggards, eternal followers that lack the ability to innovate and continue to inhabit a world of quantitative models oftentimes not descriptive of today’s reality.
The major changes the World went through in the 1940s and the 1950s were not driven by academia. They were driven by the urgency of the time, by the devastation of World War II, by the collapse of the economy in the 1930s and the inability of the League of Nations to maintain the understanding among peace-loving states. The UN Charter is based on the principle of “sovereign equality of members”, members that should be “peace-loving states”, which excluded the Axis powers (Germany, Italy, Japan) and Spain.
I admire academics. I think William Easterly, Jeffrey Sachs or Paul Collier are outstanding scholars with impressive analytical skills and the ability to fight perpetual debates that keep their brains busy. Academics are to the policy-making process what phycisists of mathematicians are to civil engineering. Social scientists are well needed, they are a necessary condition, but they do not suffice. They are part of the value chain of the idea. Universities have produced a myriad of theoreticians and a scarcity of implementators. A similar statement could well apply to business schools that produce entrepreneurs with a user’s manual based on the previous capitalist paradigm based on the maximization of short-term profit prioritized to fulfill the shareholders’ promise of shareholder value and financial return.
I decided to conduct a practical exercise. I decided to build the best team of expert dreamers that has ever served the global public interest. Except for John Maynard Keynes and Harry Dexter White, none of the key figures in the construction of the Bretton Woods architecture were academics. The great men of the 1940s and 1950s were Roosevelt, Truman, Marshall, Kennan, Hoffman, Clayton, Monnet and Schuman among others.
Where are thou men and women of political stature, visionaries of today, disciples of Marshall and Truman? We may soon find out. A new era takes off in 2010. The train is departing and I do not want to miss it. The next stop is Subsaharan Africa.
Jaime Pozuelo-Monfort is the multidisciplinary European and author of The Monfort Plan