Be informed

This annual keynote lecture is usually in my diary. This year the speaker was Professor Luc Soete of the United Nations University- Maastricht. In a previous life, Professor Soete had worked extensively with colleagues at SPRU, University of Sussex (with which my research group shares a building).

Professor Luc Soete

It was an extremely interesting lecture; indeed, I was not expecting it to be so. Professor Soete is an economist. His thesis was unexpected. Essentially he turned on its head Schumpeter’s notion of Creative Destruction whereby economies and humanity move forward, sometimes by the destruction of the old – whether it be products or modes of production. Professor Soete posited the idea that perhaps not all innovation was good (a bizarrely accepted phenomenon). So what we were presented with, alternatively, was Destructive Creation. Professor Soete focussed on the financial crisis, but equally, this destruction is taking place in the public sector with any number of services being destroyed by cherry picking private sector companies being invited in to leave the state with rump services all in the name of innovation, entrepreneurialism and economic development.

In terms of policy responses, Professor Soete offered a number of familiar initiatives; notably rearming the regulators so that they can tackle the abuses by private sector utilities in particular. These are old hat. States are not particularly interested in rearming regulators in our interests. We’ve all seen how regulators are routinely disarmed by policy makers (all readers of this blog should see Inside Job by Charles H. Ferguson). There was no suggestion that perhaps the system was broke and needs replacing (not fixing).

Professor Soete had one interesting policy suggestion. Because children are going to bear the brunt of this Destructive Creation, perhaps they should have proxy votes in elections. What form these proxy votes should take was not clear. But I think it is a good idea providing the proxy is not the very same people who have brought us to this nadir.