Michael Spence Discusses Inequality and Growth

economies are just changing the entire world. Um Spence has had a number of really fascinating forecasts that have all turned out to be quite prescient. Uh. He's almost blase about it. He he describes them as all beevitable. Uh. This is really a fascinating conversation. If you're interested at all in information signaling, in how economies di elop and grow, about the impact of not just technology but government institutions and intellectual capital, you're going to find this to be

an absolutely fascinating conversation. So, with no further ado, my interview with n y Us Michael Spence. This is Masters in Business with Barry Ridholts on Bloomberg Radio. My extra special guest this week is Michael Spence. He is the two thousand and one Nobel Prize winner in Economics for his work on the dynamics of information flows in markets. He is the former dean of the Stanford Graduate School of Business. He is currently a professor at n HYU Stern.

He is a senior advisor at General Atlantic, a very large private equity firm which manages about thirty five billion dollars. Michael Spence, Welcome to Bloomberg. Thank you very It's great to be here. So I'm fascinated by the work you do um your Nobel Prize. I'm going to take what is normally a somewhat esoteric research area and see if I can make it understandable how people make decisions when critical information is hard to find. Is that a fair oversimplification, Yeah,

it's certainly part of it. Yep. So so tell us about that. What how did you find your way into that space and what are the dynamics of information flows? Well, so I got I got interested in this when I was a graduate student, probably little color commentary. By the time I had finished my general exams, which is the first two years of a PhD program. I've been in school up through high school, thirteen years in Canada. UM. Then I had four years at Princeton, These were all

wonderful experiences. And two years at Oxford UM a road scholar, A road scholar, yeah, doing mathematics eventually and UM, and then two years in the PhD program. And I've had about enough, and so I went to one of my advisors, he's a great friend, Dick Sauser at the Kennedy School, and I said, I think I'm gonna quit. And he said, what are you gonna do? And I said, well, I mean, you know, I'm tired of, you know, talking to myself and sitting in a library and stuff. So UM he said, uh.

He said, the problem is you don't have enough human contact. You should teach. And so he did two things for me. He he gave me a little bit of his course on social choice theory, which I screwed up royally my first outing as a teacher. And the second thing he did is he made me what he called rapport tour of a faculty seminar in the then new, new, one year old Kennedy School. It was extraordinary group of people,

you know. It was Francis Bathor and um Lestero came down to visit from m I T and Ken Arrow, Tom Shelling, Uh, just as a quite a run of Nobel laureates and that, oh no, it was pretty amazing. Not all of them have been recognized in that capacity then, And so that was fascinating. And my job was to turn what was a kind of general discussion you know how those go all over the place into nine pages that made it look like just brilliant you know, linear exposition. So I did that and I had a lot of

fun doing it. And Kenn Arrow, to who is dying day, said that that was the thing he thought was my greatest skill, Rappert touring um. In the course of that, Lessera came down and started talking about what he called statistical discrimination. So I don't want to, you know, make this too nerdy, but basically, whenever you have okay, when when you have missing information, then basically you get people classified, you know, by what you can see or detect as

opposed to what you don't see. Uh, and Less's idea, and that automatically produces discriminate nation. So what happens in any you know, economic or social context is that the members of a group who are otherwise indistinguishable from each other I mean, in in your world, think of asset classes, okay,

um is a little bit like this. Things get lumped into an asset class because they're supposed to be sort of similar and the end telemarkets get deep informationally, you know, you don't see all the differences, so they tend to

be averaged. Right When you average a bunch of diverse entities that are in one of these you know, silos that are distinguishable from other silos by what's visible or detectable, then you basically get the people at the upper end of some quality spectrum get treated as the average and that's not good. And at the lower end they get treated as the average and that's great for them. So you're discriminating against the high quality end of the spectrum

and you're favoring the low quality. So this has to have huge implications for people looking at, let's say, making investments in either private or public companies. Absolutely, yeah, son, But then it gets complicated, I mean for sure, um So what so the phenomenon that this gives rise to in markets is the one George Jakerlof wrote about. Although the insurance people have known it for years, it's called

adverse selection. And what happens in that in that context is basically have what I just described, this quality spectrum that has the unfortunate properties. You can't tell the difference between the the entities, think of them as things for sale and differing in quality. Used cars is the example

he used. So what happens in a market like that is that the price reflects the average quality, and the people at the top end of the quality spectrum say that's not a very good price for me, right, and they take their product out of the market from the top end, and then the average quality falls and eventually people figure that out and the price goes down, and then the people at the top end of the remaining spectrum say that's not a very good price. I'll take

mine out right. So that's that's the origin of the term adverse selection. People are selecting in and out of the market, and it's adverse because the top end of the quality spectrum leaves. First, let's talk about your book, The Next Convergence, because it's such a fascinating application of of information flows. Uh, there's a quote in the beginning

that I just found absolutely mind boggling. From seventeen fifty to nineteen fifty, the average income of people living in countries that underwent the Industrial Revolution, so their incomes rise twenty to forty times versus the non industrialized countries. And this was only fifteen percent of the world's population. Is

that about right X that's amazing. Yeah, So the growth rates weren't breathtaking, you know, probably on the neighborhood of two in real terms, are on a per capita basis, but if you if you do it for two hundred years, you get a fairly big ink magic of compounding exactly, so that that was basically it. Then then you know, the the other a living in countries that we now call emerging economies. Most of them some of them haven't

emerged very much, but uh but there. But that's the other group, and they were held back by m essentially uh global economy that wasn't really open and the colonial structure that was the governance. So the rest of the book you basically say, well, seventeen fifty to nineteen fifty was the Industrial Revolution. The next hundred years, I think you referenced nine six of the world's population will join the affluent. That's a big, bold number. We're about halfway

through that process. Our maybe a little more. How accurate was that forecast? And and how is this actually happening? So I think it's well underway. I mean, it may have been a bit optimistic, but you know, China looks like it's well on the way. It's a high middle income country with a very good chance of being, you know, a high income country, admittedly at the low end of the spectrum in another ten to fifteen years. India is a bit further behind, but there, you know, humming along.

You had them those two together, and you've got two point I think it's seven billion people, which is a significant fraction of the world seven right, Yeah, that's half of my sixty percent. You've got you know, the rest of Asia. That some of it came earlier, some of it came later, and so on. So it's it's I think this convergent process is going to be very hard to stop because people, because the structures are there to enable it, and because people have gotten the hang of

it that it's actually possible. You discussed in the book that post World War Two Japan was a very unusual example compared to other so called developing nations. What what made Japan so unique, especially over that seventeen fifty to nineteen fifty era. Yeah, so Japan is a kind of hybrid. Um so most of Asia, by the way, and right after World War two, Asia was by far the poorest

part of the world, worst in Africa, worst in Africa. Yeah, And they and the economists at the time, you know, when asked development economists, when I asked, you know, where was the real trouble going to be? They said Asia. Many of them said Asia, because Asia doesn't have natural resource wealth on balanced and Africa is by far the

richest royal diamonds, you know, you name it um. And that turned out not to be a good guest, because that turns out that the kind of real capital that enables this growth as people provided they're educated and so on, and not not just uh, you know, mineral wealth. Yeah. So so basically, I think, you know, what the situation was, Japan was a hybrid because it had gotten to middle income status. And the reason it got there is that in eighteen sixty eight, the Meiji Restoration, it abandoned the

policy of isolationism, embrace trade. Embrace trade, braced openness, and they had started to modernize. And then that, of course, World War two wasn't and they were an imperial power you know, all over Asia, you know, China, Korea, etcetera. Um, So that World War Two was a huge setback, but basically they got back on track. So over the same period that that post industrial period, pre war post industrial period, how come China fared so much worse than Japan. So

there there's two kind of crucial ingredients. And in the post war growth that we've I've seen and by the way, this is growth that we've never seen before. I mean we're talking about extended periods like two and a half decades of five, six, seven growth even higher in China just never happened before. So one of the things I was trying to do in the book is explain how you could do that? Right? How could you have a max of two you know before that or two and

a half? How could terms yeah in real terms, how could you have advanced countries growing at max three in real terms? And these people are growing at seven, eight and nine. And the answers they're catching up, right, all of that technology that you need to drive growth in the long run. You know, the the solo insight UH was already developed, so it just had to be brought in and adapted. In other words, this isn't one country

amongst many that are all emerging at once. When you take an emerging economy and they're surrounded by developed economies, that's an accelerant provided they're open and provided their investing at high enough rates. So so well, clearly China is making massive investor. Do you consider them open enough to continue taking full advantage of what the rest of the globe can do for their growth at the moment? Yes, and certainly historically once they decided to open in ninety

eight undergoing chapin Um. Now, is it logically possible that they could close themselves off enough to to put a major dent in their growth, Yes, it's it's it's unlikely, I think, but it's possible. You asked about the history of China. So China had a revolution in nine the Communists took over. The Communists, on the positive side, probably

had the intention of making everybody better off. Right that, you can find a lot of governing structures in the developing world where the governing elite, whoever they are and however they got there, are doing something other than trying to make people better off. Lots of corruptions. There's mineral resources, royal all I kind of thing. So if they're doing that,

nothing good is going to happen. The Chinese weren't doing that, and they did put a hell of a lot of resources, given the side the low levels of income in the economy into education. What they didn't do is run a market economy. So for the first twenty nine years they basically got nowhere, but they built assets that were useful. And when they changed the the development model a growth model to opening up and and using markets and initially selectively,

then it just took off like a rocket. That was the post Knickson era. That was the post Knickson eira, So it was they date the Chinese date the reform process from Let's talk a little bit about job market signaling. We discussed some of that before. You've done a lot of work on this tell us about the origins of

job market signaling and how it's evolved over time. So the origin of it was was that discussion that we had earlier that had to do with informational gaps, so that the adverse selection problem is basically what happens in markets if you can't close the gaps, and then we talked about brands as a way of closing it. What do markets do, They're going to try to close the gaps. That's one of the things that between buyers and biber doing buyers and sellers is the best way to think

about it. The second thing is signaling the things that the the the sellers can do to convey actually accurate information in the market. Um uh. The third thing that we do collectively is regulate. Right, So financial markets have

enormously large gaps, uh. In principle um So it isn't a great surprise that every set of financial markets in the world has disclosure requirements, and they're pretty stringent, and the penalties are pretty high for violating it, and and and and when those disclosure requirements are not there are not enforced, then you get bad misbehavior in the markets. So what you see in the developing world all the time.

So there's there's that's interesting you bring that up because it makes me think of the way we approach regulation in some areas is to prevent a behavior, say this behavior we're not going to allow. There are other aspects where we say, well, we're gonna let you do what you want, but you have to make these disclosures, so buyers know, most people don't read the fine print. They're not reading the credit card disclosures, they're not reading their

brokerage account disclosures. Given that, how does that information make its way into the marketplace? Is the signals still there? If of us don't read the disclosures, maybe it's of us don't read it. Yeah, no, the answer is no, it's not. And then you need if if it's important to close that informational gap, then you then and you can't close it, then you have to do do something else.

So we do all kinds of things. So we assume that there are classes of investors who are not capable of understanding the risk characteristics of certain kind asset classes, and they're simply precluded from it. And you know, meaning if you're not a credit investor, go into a hedge fund, or don't have assets of a certain size, we assume you can't withstand the kind of risk characteristics of that asset class. So regulation in that sense has multiple avenues,

and they've done properly. They tend to be pragmatic response to to real human behavior as opposed to some kind of theory about it. Yeah, quite interesting. What about the impact of technology on both signaling in the job market and and the impact of regulation. Yeah. So this this when I when when the Internet was sort of in its early stages, meaning a kind of public property, let's call it the mid nineties, people you know, had all kinds of theories about what its impact was going to be.

And I got asked a lot of questions that the gist of which we're is this going to close informational gaps? And my answer then is the same now, but I underestimated something. So my answer was, it's not going to eliminate private information meaning information that I have because it's me that you know, you're only going to get if

I somehow transmit it to you. Um. But but what the Internet does is it gives you so many access at very low cost of so much information that's correlated with this kind of thing that I actually think it does close informational gaps. And the best example of that, I think is, um, what we see now in fintech. You know, so you so in like and financial and for example, an Ali babbie, you have a massive amount of data because they basically they're half the mobile payment

system in China. They can use that data to issue credit to little tiny businesses. There's there's a partially owned subsidiary called my Bank that just won an award for this using this data to make credit assessments and price and price the credit appropriately. And uh and this these people are otherwise blocked away. I mean, they can only borrow from family and friends. A bank can't either assess

the risk and and or it's way too costly. So this day and this information effectively creates a whole new mark, creates a whole new market. I mean, and when we're talking about I mean this, my bank has seventeen million small business customers. Uh average number of employees five, no collateral, nothing. They just look at their credit history, their transaction history, transaction history, their payments history, you know, and and their online activity. So let's talk a little bit about growth

and trade. And I want to start with the project you did for the World Bank. Tell us a little

bit about that. It was quite fascinated. Yeah, so they they I kind of stumbled into this because I had not been a specialist in in um development growth related to developing economies, and so I around about two thousand, the early two thousands, I got a call um from uh some folks at the World Bank who become good friends, and they said, would you come and give a lecture on investment and growth at the one of the spring conferences,

the Poverty Reduction and Economic Management? And I said why me? And they said, well, you sort of you know, kind of a microeconomic focus and pay attention to these things. And so I thought to myself, this is this is signaling or screening. I thought, okay, so here you meaning that yours. They saw the Nobel and said, oh, let's have him talk about this. Is that what you mean by signaling? No? No, no, no, no was the decision I made. So I made the following decision, Barry. I said,

I'm gonna do this, and there there's one of two outcomes. Uh. Either it'll be a disaster and which I'll have learned something that I shouldn't be, you know, mucking around with the ten thousand people who are the experts in development in the world. Or it'll go okay, and then I'll learn something else. Right, So it was deliberately a screening device, and it seemed to go okay. And from that came a Commission on Growth and Development, and the idea behind

that commission wasn't to do original research. It was approximately fifteen years since the Washington Consensus had been enunciated, UH, which was it's it came out of Washington. Uh. I've temporarily forgotten that John Williamson wrote it. It's been much maligned and unfairly to be honest with the Washington Consensus is perfectly sensible. Uh. Assessment of what it takes to kind of grow and developing and developing. What was that

assessment said, well, there's a list of things. There's about thirteen things that are crucial components. Um. Some people interpreted as a kind of you know, uh, turnkey system. You can't do that. Every country has idiosyncratic characteristics. But the thing that gave the Washington and sense as a bad name is it was taken, especially in Latin America, and stripped down to liberalize, privatize, etcetera. And UH, and that gave rise to kind of accesses and you know, not

terribly good results. UM. So we decided this it was a good time. We had a lot of experience that had been accumulated in countries like China and India and others. Brazil had started had come out of its um twenty five year funk and looked like it was starting to grow um, et cetera. It was a good time to kryd of figure out what research, what experience and so on had taught us about that was useful and could we kind of summarize it and give it back. So

that was the exercise. We wrote a seventy five page report based on kind of two years of listening to people and uh been thinking about it, and it was meant to be an up and none of these things are ever kind of you know, definitive, right, it was an update. Right now we know this that we didn't know before. And the course of doing that work, we went and looked for countries that have grown for at seven percent or more for twenty five years or more,

not every year, but on average. And there's thirteen countries. Really, because that's a giant number, seven percent. Seven you double every decade at se and uh, there's thirteen countries that have done that at various points. China's one. Brazil in the early post war period was one Korea. They won't be surprised you the Timewan easy economy. Japan was in that group. Uh, there were some surprises little Botswana. Really he was a member of that group. Yeah, uh so,

different sizes, different government structures. It was it was pretty interesting. Were there any consistencies across all thirteen. Yeah, they're they're basically all the same growth model, which has come to be called the Asian growth model. So it's it's high levels of investment funded domestically, openness, including especially foreign direct investment, which is the one of the principal channels for technolog

inbound technology transfer and leveraging the big global marketplace. If you try to do this on a standalone basis, it just doesn't work. I mean, you look at the demand in a country with a per capita income of five dollars, it's kind of food, shelter, energy, and not much else. So everything we know, specialization and the atom Smith sense, you know, taking advantage of comparative advantage. That none of

that works on a standalone basis a bit. But you know, even a country the size of China in the early stages is small relative to the global economy. Small economy meaning yeah, small economy, not small number of people, but small economy, so they can they can grow at very high rates without really big coming a major presence in the market and starting to turn the prices against themselves. Um So in the book you write about China, and remember the book was two thousand two or two thousand

three something like that. No, No, the book is two thousand ten or eleven, Okay, exactly. You wrote, Um, China is of U S or EU economy in ten to fifteen years, it will be the same or bigger. It looks like that's a very precedent forecast. Um where are we in the process of China passing the EU or the US in terms of their economy, not on a per capita basis, but just on a growth basis. Yeah, and grow. I think they're around sev now on a growth basis, maybe a little bit more so we're just

a few years away. Yeah, it depends on I mean, you know, the trade war could put a dent in the kind of speed of the trajectory. Uh and and a and a natural slowdown is occurring in China too. I mean countries you know where they have per capita incomes in the team meaning thousands. Um, just don't grow at seven percent anymore. The catch up effect isn't as powerful. They're generating technology they're becoming like advanced economies, all of

big numbers just starts to rear its exactly. Yeah, they're kind they're they're they're becoming part of the kind of global system that generates the technology that enables the growth for all of us. So they mature into more of a developed nation. So let's you mentioned the trade war. Let's let's talk about that. Is how much of the trade war and tariffs are heard in China? Is this really having a major effect and what is it doing

here in the United States? Um? So in China, it's slowing them down because they still have some dependence on the export sector. Um And it's slowing everybody down through uh somewhat different channel, which is uncertainty, which means globally on globally. Yeah, So in other words, corporations are holding back, holding back and making capex and hiring decisions because of the uncertainty or know how this resolves? Yeah, where where

are we supposed to put our supply chains? You know, we're just gonna gonna go away, right, There's some things that are happening pretty fast. So, for example, China was in the process of you know, basically moving the labor intensive process or manufacturing assembly, which was the early expert growth engine out And the reason has got nothing new with the trade war is just their incomes are too

high to be the competitive place for that. They can replace it with a higher yielding They replace it with a higher yielding thing, and and they and the activity itself to the extented it's not cut off by automation. Digital technology goes to Vietnam, Bangladesh, Turkey, maybe Turkey, Ethiopia. What about Mexico? Mexico is yeah, is there a little

Mexico is a moving upscale a little bit. Yeah, it's a middle income country if you take an average, but there are pockets you know where where it's it's very lumpy distribution, it's not even so that's kind of yeah, that's kind of where we are. UM. I think probably for your listeners, the most important thing to understand is China would have been clawbered twenty years ago if something like this happened because they were dependent on the export

sector for the demand that enabled the growth. Now they have this huge growing middle class with rising incomes like like the United States, Um, they can enable the growth with the domestic demand to much greater extent. That's interesting. My sense of China versus the way the United States has been approaching tariffs is that they play a much longer game than we do. We think in months and quarters,

they seem to think in decades. The response to hit the soybean farmers and the heart of the Trump base seemed very, very calculated and not random at all. Uh, Are they just going to wait us out until the next president comes along? Or what's there? What's their approach from your perspective, Well, they're probably a little puzzled, because I think it's hard for them, as and and many of us to figure out what with any precision the current administration in the United States is really after. It

seems to be a bit of a moving target. But no, I don't think they'll I don't think they'll just definitively wait it out. They'll see if they can make agreements where it looks like it's sensible from both mutually beneficial to make an agreement. We have been speaking with Michael Spence. He is a professor of economics at the n y U Stern School of Business. If you enjoy this conversation,

we'll be sure and come back for the podcast. Extras where we keep the tape rolling and continue discussing all things information structure related. You can find that at iTunes, Google Podcasts. That's your Spotify, wherever your finer podcasts are own. We love your comments, feedback and suggestions right to us at m IB podcast at Bloomberg dot net. Give us a review on Apple iTunes. You could check out my weekly column on Bloomberg dot com. Sign up for my

daily reads at Redholts dot com. I'm Barry Hults. You're listening to Masters and Business on Bloomberg Radio. Welcome to the podcast, Michael, Thank you so much for doing this. This is really fascinating stuff. I am absolutely intrigued and and when you talk about I don't want to get too wonking. No, no, these these listeners love going into the wonky weeds. Um. There's a couple of things, both from the book and some of your other writings that

we didn't get to that I want to discuss. But first I was mentioning during the break that I thought the book really has has held up very well. It there's nothing in it that's outdated. What are you thinking about for your next book? Well, on the it takes about a decade to recover from writing a book. That's my experience. Ten years later, you're almost ready to almost ready to start. Yeah, no, I I mean on the development side, Verry, I would say the biggest potential shift

is it does come from the digital technology side. So you know, you have we are either at or very close to the point where the digital technologies, which you know how kind of high fixed, very little variable cost technology software replication, zero marginal cost, etcetera, basically overtake the labor intensive ones replace. But that undercuts a very important part of the growth model that we saw being used essentially in every country that was really successful. Jobs. Yeah, jobs,

what are you gonna do? What's so you've got to sell something, a good or a service to the global economy that that part hasn't gone away? The question is if it's not to ways and assembled electronics and stuff and shirts and uh, textiles and apparel is the starting point for most of these places, then what is it? And all that stuff has gone robotic? Now is going robotic? You know so? I mean it doesn't happen overnight, but um,

but it's happening pretty fast. I mean, you know, so textiles is difficult because the materials soft and the robots have trouble kind of And we actually go talk to the people who are trying to automate this, they say, we're not quite there yet. Um, who can't sew the stitching straight on on your shirt yet? But it's not that far away. So so there's a real question about

um this growth model. And one of the things that that part of the answer is probably going to turn out to be another aspect of digital technology, which is you can create ecosystems, platform centered ecosystems that enable entrepreneurs to create businesses and employee people poll and whatnot and and I'm sorry, And an international version of that would be moving in the direction of a partial substitute. So when we talk about inequality, we used to talk about

developed world inequality versus emerging markets or undeveloped world. Now, thanks in part to digital even within developed worlds, there's inequality that has apparently risen to levels we haven't seen for a few generations. How much of this is based on information asymmetries and information gaps, and how much of this is just the nature of capital and a sort of winner take all system that seems to have been evolved over the past few decades. Yeah, I think it's

more the latter. I mean, I think it's more a combination of globalization and the evolution of technology have since about the late seventies has based sickly reverse relatively benign growth patterns with respected distribution. So they the whole thing went started to go south, let's say around and you know, we have big changes in approach. I mean, that was the that was the Reagan Thatcher era, right, So we probably had some deregulation and other things that might have

contributed to that. But but basically, you know, you've got something that's by most people's standards, just gotten out of control. And and of course the you know, because so income, if you have income rising income inequality for long enough, then it then it's on the wealth side, it's self perpetuating. Once you get to a critical mass of wealth, you should theoretically retain it. Yeah, in theory, unless you make big mistakes. Well that's the old shirt. What is it?

Shorts leaves to shorts leaves in in three generations. So so that raises some really interesting questions. We've always had income inequality and wealth inequality. It seems to be inevitable um in capitalism. What what you're what I'm getting a sense that you're referring to is when they reach extremes to the point where, uh, it threatens the social order? Are we remotely close to that anywhere around the world. We look at the EU and the UK and the US.

It seems there's some signs of unrest, but nothing like France before their revolution. No. I mean, we're probably not at that point yet, but we're pretty late in the game because I think that the people who have been sideswiped by the way our economies have evolved, it's a pretty large group and they're pretty angry, in part because it is my conjecture anyway, because we didn't do anything about it. Right, Well, what are we supposed to do about So let's back up a set, because that's a

fascinating subject. We've had globalization for a long time. There's a reason why my iPhone is more powerful than what took us to the moon forty five years ago and plus thirty or forty a month. It's because of globalization. It's because of automation and technology. It's given us a higher standard of living on average. But there are clearly winners and losers from the decline of unions, the rise of globalization, and the increase of automation. What are we

not doing to moderate the negative impacts of that? Well, I mean, you know, probably not using the potential for progressive taxation on that. I'm not suggesting that's the whole answer, but you know, but it probably needs to be part

of the answer. You know, there's there's a I think one of the reasons is coming into focus now is there's a bunch of really good research, you know, with a long time arise and picket E Sayez you know Zookman, Chatty rad Chetty at Stanford, you know that are bringing out dimensions of this and you know, so it comes in cycles, right, uh So, in no ways this has been here for a while, but now we really understand it better. We understand it better and understand the history better,

and and now are kind of rapp grappling with the responses. So, I mean, we haven't had a presidential primary season where people are talking about wealth taxes for a long time. Did we previously have this? This goes back post depression or around that era. Uh I don't know the history well enough to be able to answer that whether we had an actual discussion of wealth but this but it's it's new in the post war era. I guess that's

the way I would say it. Um And but we're in the early stages of kind of thinking this through. I think the other thing that we learned from a wide range of both developed and developing countries is that is that one of the things you want to So there's there's two there's two ways to think about inequality. There's what economists call x post that's what actually happened. And on that front, I think most people agree with

what you just said, which is it's okay. People understand we're not going to all be you know, have the same incomes and stuff, but it can get out of hand. The extremes are not okay. And then there's what Americans call it quality of opportunity, which is exciting. That is, do you have a fair shot on a level playing field at whatever this distribution out there is. And people have been complaining that's been what's been contracted. They are

and and it's connected. You know, if if the income in equality gets sufficiently extreme, then the lower end of the spectrum doesn't have the resources to invest in getting to that playing field, which is probably why this whole IVY league, um, you know, pay extra money to get your kids in, has has resonated so much and outrage people so much. Have they been under illusion that there's an equality of opportunity or was there genuinely equality of

opportunity for for most of our history? No? I mean, relatively speaking, I think yes, but not perfect the quality of opportunity, because that's unachievable that you know, the this um gosh, we've got to get into USC or Harvard or whatever. Stanford puzzles me. I mean, I've always thought,

you know, I grew up in Canada. Canada is more like other countries in that there's a most of the higher educational institutions are publicly largely publicly funded, and you know, and there's a few of them, and you know, it really matters if you get into the right ones. In America, we've got hundreds, We've got public and private institutions. We've got all kinds of really top flight colleges, and a lot of your friends of mine went to these colleges

and whatnot. I went to a state school here in New York, and I don't quite understand what the kind of you know where where this you know self impost pressure to get into these you know eat institutions comes from. Because my sense is a kid going to anyone of a huge range of institutions has a pretty good running shot at a pretty well let me let me push back at you. You went to Princeton, you went to Oxford,

you went to Harvard. There's not a slouch and that you talked toward a Stanford teach an n y U. You've been affiliated with fairly elite institutions. Are you suggesting that you could go to a I don't want to say, a lower to your school, but next to your school and still have the same sorts of opportunities that you would get at the best of the best of the best. Is that the concern from so many people, the snowplow parents want to remove every obstacle to their kids success.

I think, what, let me, I'm gonna guess what they're thinking. So one of the benefits you get from going to these schools is the education and the signal the others the network of course, Okay, and so if you believe the net work is crucial, then and that that's the

main thing. Then then I can start to understand. So you know that the Princeton network in New York or the Yale network in New York and Washington, maybe you know you're desperate somehow to make sure your kid is part of that, and the opportunities that that that opens up.

That that's the part that that I think is um perhaps real, but it's also worrying, right, I mean, you don't want to think that, uh, if you're out of any of those networks or all of them, that the meritocracy has failed to a point where you know, you don't have access to the top government jobs or whatever. So to the extent that's true and that the parents are right, then I think we have to start worrying

about about this dimension of equality of opportunity. So so on that note, let me ask you some questions that didn't get to that I think are relevant. One of the quotes in the book, um, and I don't want to mangle this adversity is a is surprisingly awesome in the birthplace of successful change. What what is it about adversity that leads to change? And you also talk about the change in dynamics during a crisis where the entrenched

interests lose a lot of their hold on on power. Yeah, so it's not a sure thing that a crisis produces good results, but it does create at least an opportunity because it essentially weakens the vested interest power to maintain the status quo. And that's why you get routine statements like never waste a crisis, you know, etcetera um. And

there are examples. I mean, you know, one of the members of that commission, what is a Turkish citizen at least at the World Bank and now elsewhere, you know, was finance minister when Turkey at a crisis and was able to put through some reforms that you know, arguably just you couldn't do in quote normal times. Well, a lot of the post Depression Great Crash era reforms we've never seen anything like before or since in the United States. One of one of my favorite comparisons in the book

Singapore versus Cuba. Here are two countries relatively the same size to island nations, similar populations, enormous different in enormous differences in economic outcomes. What what explains those differences, Well, it's basically the choice of this It's the development strategy

that that explains the difference. So um, I mean there's a kind of literature and you know that you know, goes back and forth between policies and institutions on the development literature, and I think the sensible sort of a set that his institutions do matter, but policies matter as well.

Singapore basically was relatively autocratic. But they were pretty clever. Uh. Well, for example, you know, they figured out early on, first of all, they have a multi ethnic structure, so they have Malaise and Chinese and Indians, and they they probably leakwan. You figured out that if those people got at each other's throats that you know, would kind of they'd place apart.

So they set out to get to make the growth patterns inclusive really from the get go, and anybody who was not on board and that was simply marginalized kicked out um. And they and they figured the most important part of that was housing. Really they went after housing. UM. So housing. The two critical elements were housing and education. So the education is stunningly good, um over a long period of time, and housing is subsidize so you don't really ever have a problem with you know, where you're

going to live. And whether it's affordable and stuff like that. Huh. And then they left things like saving free your retirement up more or less up to you. So there's not a lot of pension big liabilities and pension funds. But they but that crucial piece they got right there. They did one other thing, which is I asked, uh a senior person who was a partner of Lee Kuan you in the early days of development. I said, well, it was the secret to success and in sing Pore. And

he said, well, there were two things. He was a little this is a little tongue in cheek, but because there were a lot of things. But he said there were two things. One, we were really harsh on corruption. We basically stamped it out. Uh. So we we took care of that problem. Also, rule law really matters. Yeah, rule of law in the sense of you know that part that has to do with corruption, you know, a civil servant is it's just got to be clean. Um. And when and when there was a violation of that,

we really stamped hard. And so I said, I understan and that part and and they said the second part was luck really yeah, they acknowledged that, And so I said, what do you mean and he said, well, uh, he said, this this isn't really luck. This is sort of pragmatic opportunism, you know, responding to things that you can't anticipate in advance, so which sometimes is indistinguishable from luck. It was indistinguishable.

And in this case what it was was in the post war period and during the Cold War, UM, a system that came to be called the multi fiber agreement

was set up. And what it was was an attempt to make sure that the textiles and apparel industry globally was spread out across a bunch of countries and because they wanted those countries to thrive and stay on quote our side, um, And so there were quotas basically, and an early major center of textile manufacturer was Hong Kong, and they hit the quota, and the entrepreneurs in Hong Kong, who are no slouches, started looking around the world, Hey

let's go over there. Yeah, and Singapore went, well, well we'll do that. Um. That's what we meant by luck, you know. So, I mean you don't plan to have a multi fiber agreement where you know, the major player hits the quota and you're just about ready to take it on. But but it's but they're really not a big text style not manufacturer anymore. They very quickly morphed towards technology and another industry. So you don't see this much in Hong Kong. You don't see it much in Singapore.

You know, the the handoff process is interesting. So it went, it went to Korea, uh, and to some extent that Taiwan, and then their their incomes rose to the point and they had to move again, moved to China. Some of it was in Indonesia. Um for a while, Vietnam for sure. Um, now China is handing it off again. I mean this passing the baton is a natural part of the dynamics.

I have a friend who used to be located in San Diego and ended up in Vietnam, and he said, Vietnam is today the wild West of capitalism, the just the purest expression of Uh. Let's try an I d and see where it goes. What do you see as Vietnam's future in terms of future convergence? Al Right, you know they haven't quite hit the seven percent club mark. But um, but it's basically they were, They're part of

the process. They're on the way. I mean, if you wanted to be skeptical, what you would say, Well, the tensions in the South China Sea area are sufficiently high, they'll get in a fight with China and something bat will happen or something like that. But on at least on the economic grounds, I don't see any reason why, uh, you know, Vietnam won't be continue to become more and

more prosperous. So you recently wrote about three mega trends driving structure rules shifts, uh, digital transformation, which we talked about growing em purchasing power, and then rising nationalism and popularism. How are these three all colliding? So I think that they're connected with each other. So you have so the digital I think we understand it. It's it's not one thing, it's many things. So it has um the potential to

generate benign and highly inclusive growth patterns. But it but it will give rise to difficult transitions as people retrain to do some different things. So that that's kind of coming into focus. Um, and and we're just gonna have to sort of amplify the benign part and and deal

as best we can with the other part. Second, the rise of these emerging economies means it powerful, which means that the governance structure of the global economy, which for many many years was essentially the G seven in terms of priorities, this isn't to work anymore. Now it's CLO's G twenty and the G twenty is more heterogy, heterogeneous and harder. It's harder for them to kind of reach conclusions that you know, aren't just milk toast um and stuff.

And so we're getting we have a kind of the part of the consequence of the rise of the emerging economies and Asia is a kind of set of centrifugal

forces with respect to governance and whatnot. Um and then and then you know this partly economic, partly social phenomenon that I think people are seriously studying, but I don't think it's perfectly understood, which is people are really aren't comfortable living in a world where where the unit is designed is called the global economy, right, They just aren't.

And some of it's kind of they get sideswiped into economic terms, and some of it is culture, you know, I mean, we're not it's also history from all human history except the last half century. It was always local. Maybe it was regional at most, regional at most. So so you're getting so, you've got so you're getting a really powerful reaction again against the kind of post war kind of trends. And if it's strong enough, then it'll

sort of dismantle. It's including some things that we don't want to dismantle, come from the benefits of an open global economy and specialization and all that kind of thing. So, I mean, nobody knows where that's going to take us. But this is this is this is a world I would say that has more centrifugal forces and more tensions than that I can remember for a long time. There's a quote in in the book that I was fascinated by, um,

and I want to get your thoughts on it. Sustainable wealth creation is ultimately built on people, human capital and knowledge, on continuous structural change in the economy, and on systems of economic and political organization that permit the productive deployment of those assets. Now, when I read that today, that seems pretty obvious, pretty self evident. I get the sense when you wrote that that it wasn't quite as obvious. Um,

what what's your key takeaway? Why is it human capital and not natural resources or oil or things that we used to think of as as so important to the economy or at least to the local wealth creation. Yeah, so you one doesn't want to overstate these things. So if you take an economy that's rich in human capital and take away its energy, it's not going to do very well. Right, So we're talking about complementary inputs, and probably that and and statements like are a bit of

an overstatement. What I was doing. It was trying to counter, you know, this notion that you know, there's some source of wealth that's really important, of comparable importance to the kind of knowledge and technology based. So let me let me tell the way I used to think about them myself, and I sometimes do it in class. I say, so, I'll give you a choice that you know is completely hypothetical. You have an economy it's doing very well, it's quite advanced.

And Choice one is you destroy essentially all the physical assets, or a substantial fraction of them, but everything that's in people's heads or in the libraries or in the scientific community, a huge range of stuff. All the traffic engineers still know how to run traffic and stuff like that. That's one and the two is everybody gets amnesia and you lose all that, and then I say which one would you take? And the students always take destroy the physical assets,

and they're right there. It's hard to always rebuild that. You can rebuild that. And the other thing is centuries have accumulated knowledge and wisdom. So what do we think of certain countries? And we've seen this in i Ran as a good example, where they throw out half of their intellectual class. They throw out around the time of the revolution, they throw out all the educated professors and the doctors and the lawyers. And does does that set

them back decades? It takes that long to recover? Yeah? I think so, Yeah, definitely, especially if you know it's an environment where it's it's hard to get people to come back. Uh. And some of these developing countries, you know, they export people in the early stages to go get an education and then they and people don't return then and for a while, I don't return. And then if you get lucky and went, you're further down the road, the opportunities start to to come and then they start

to come back because the opportunities are there. That's China today. They used to send people here to get educated. They wouldn't go home. Now a big chunk seems to be I want to go back to Shen's in orspit. So that's I mean, that's a tough one to multi year thing to navigate through, but that's that's an example of that. Yeah, I mean Europe, you know, coming into World War two,

export read an awful lot of talent. That was a pretty important part of the the advancement of the American I mean, well you look at our nuclear program from Germany, effect scientists, you know, engineering talent, Weinstein von Neumann and Morgenstern, game theory, I mean, what's on and on um. So, yeah, it's not a good idea to export talent, and it's not a good idea to underinvest in things that keep

you know, that kind of person around. So I live in Italy part of the time, where in Italy malone on pretty well put together city. And but but you're but a general problem in Europe and they're falling behind. And this but especially in places like Italy, is that we don't invest enough to keep the top you know,

biomedical scientists and whatnot. It's not that I mean they want to stay right, but you gotta have the the research funding, you have to have the programs and stuff, or they're gonna you know, these are the most mobile people in the world. You know, they're gonna end up in the United States and Britain or something like that.

So is it it's not just for career for money opportunities, it's for research opportit, research opportunities and everything the one that you love to do done, and so the top talent ends up leaving it. Is that strictly a problem in Europe or where else do we see that problem coming up? Well, I mean no, it's not, you know, confined to Europe. I mean I think Europe has, relative to the income levels a kind of problem and that

they're falling behind, especially in the digital area. Maybe when you think about it, that really influential entities in this world, a subset of them, or the mega platforms they're all in the United States and China, mega platforms like Ali Bamba or Facebook or Google or go down the least Amazon or whatever. Yeah, and that's what's attracting all the intellectual capital. Well, it's certainly the kind of epicenter of

a lot of you know, applied innovation. So Artificial intelligence in this modern form is a highly data intensive activity, tends to occur around lots of data, cloud computing power, and uh an ability to attract talent. I mean if if if you and I were talking ten years ago and and and I said to you, what, what's what are the odds of this? The autonomous vehicle? You know, business is going to be driven forward by you know, Google,

you would have said, are you crazy? But you know a lot of that technology is coming out of Buy Do and Google, and it's data and engineering skills, data engineering skills and consulting car. Yeah. Quite interesting. Before I get to my favorite questions, I ask all my guests, I have to ask one question because I've had several previous Nobel Prize winners, and everybody seems to have a charming little story about that phone call they get and and we're in that time of year right now, what

what was your experience? Like, I never got the call, So never got a phone call. No, no, they tried, but they phoned my home in California, and then we had taken a little trip to Hawaii, right So what happened was they couldn't get through and they can't wait forever. So then if some minutes later they post this on a website and I had I had a friend, actually more pro more than one who u A was up

in the morning. This is probably on the West coast four thirty or five in the morning, so he saw a flash up on the screen and knew where I was. So the phone call I got was from a friend of mine. And how do you know, no one's really pulling your leg or by that point it's on the news and you by that point it's starting to get to be the news, so you can be I was

not expecting it. I mean I was completely really yeah, well because it's not a lifetime achievement award, but you know, I had been an academic administration up until fifteen years, you know, not kind of yeah and whatnot. So I thought, well, that was a choice I made. I don't regret it, but I'm not going down that road anymore. So that came right out of the blue for me. Quite quite interesting. So let me jump to My favorite questions are are speed round? This is what I asked all of my guests.

Sometimes it's revealing. Um, we'll start out easy. What was the first car you ever owned? Year making model. Uh so it was a Chevy Nova and I think the uh it was yellow. My parents bought up for me and I don't remember the exact year, but it's got to be nineteen sixty one or two. They're they're collectible now. Also, what's the most important thing people don't know about Michael Spence? Gee?

I don't know, not much, I guess. I mean, I don't think of anything that uh I've been some people are you know, people don't know that they're about a secret hobby or something. You're you're an open book. I'm pretty open. But I mean there's probably lots of things that people don't know. Maybe I wanted to be a professional hockey player and stuff like that, But well, that's your from Canada. You already said that, so we just

assumed that we did a merryment. Tell us about some of your early mentors who influenced your career and guided you early on. Wait a lot there were a lot of them, you know. I mean I went to a school it's like the Lab School at Chicago in Toronto, attached to the University of Toronto with a very uh charismatic and influential coach coached us in football and hockey and and other things. Just a guy who made a big difference in our lives, the values and the kind

of way we went about doing things. Um, and I've been blessed with really wonderful teachers, but I think, you know, eas would be what I finally became, you know, an economist. I would say my thesis advisors, which or Dick Zak, how was your Canarrow? And Tom Shelling were just enormously They're not only influential, they were supportive. I mean, you know, so I can imagine thesis advisers telling a young person who was sort of mucking around with something that didn't

sound like what other people were doing. You know, probably you should do that later. You know, that's a bit risky. Don't do that for your PhD. They never said that to me. They said, well, was it risky what we were doing? Well, it could have turned out to be nothing, So I guess in that sense, yes, But at that point I was prepared to quit. Uh oh really yeah, Well, to me, getting a PhD and going into academic life was an experiment, not a decision that I was going

to stick with, you know, through thick and thin. I mean, it turned out to be an experiment with a great outcome from my point of view. But and and ken Arrow eventually himself wins the Nobel Prize and act well, he was well well before me. He was one of the early ones, the one, the one that was surprised. I don't know if Dick Zackhauser receive a Nobel Prize. Uh, he's very very smart. But Tom Shelling came after me, who was one of your advice was one of my advisors.

So that was a bit odd. That's interesting. Um, let's talk about economics in an economists in general, who influenced the way you think about information theory? Same group of people, say, same guys. I mean, I would say I mentioned Lester Thorow, but Dick Zackheuser, for sure. I wrote things with him, Tom Shelling, because he had, um how do I say it, a really creative mind in a different way of thinking.

So Shelling, as you know, was um responsible for a kind of branch of applied game theory in which you know that was really important in the Cold War in nuclear deterrence, very unconventional, kind of not not completely formal. And I spent a lot of time with him he that was a very big influence. Sermon. Let's talk about books. What are some of your favorite books. What what do you like to read when you're not writing your own books? Well,

it's nice, it just read for relaxation. I started to like, you know, my kids, some of the kids books are kind of fun. Uh, you know, these sort of sagas, like give us an example. Well, there's a book, a series of books, you know, the last one is apparently coming out in the spring, written by S. D. Smith called Green Ember. It's about rabbits. Okay, it's everyone said, while there's a saga about rabbits that comes out, and so they're kind of fun. Green Ember. Yeah, my um.

One of my favorite books when I was growing up was The Agony in the Ecstasy. It was it's the historical novel um about the life of Michelangelo. I just found that a fascinating and be aspiring and I've I've had a lifelong kind of fascination with the Renaissance, right, mainly because so many things blossomed at exactly the same time, you know, our architecture, sculpture, finance, banking, you know, it was just this explosion of innovation around that irving Stone.

So in the next convergence you reference that era, you say, previous to seventeen fifty, there was a long period where not a lot happened. So I mean it's almost in passing you reference. UM. The book that I've found intriguing about that was I don't know if you're familiar with it, A world lit only by fire explains for years, other than the windmill, nothing was invented. It was just a

dead period at least in Um Western civilization. China and parts of UM Muslim Turkestan area were but the Western world no forward progress. That's right, and to the extent the only modification of that is that there was probably in the latter part of that period some scientific progress that didn't translate into technology and economic outcomes. UM directly right, only with a lag, but that that's basically right. It's amazing.

Any of the books you want to mention, no, that's it, okay. UM, Here's as always an interesting question, tell us about a time you failed and what you learned from the experience. It's hard to choose. It's very very long list. I mean, UM, and we we often find that failure can be more instructive than success, which is why I asked the question. Yeah, no,

that's true. I mean, when you're doing research, you know, there's a lot of they're not big, you know, kind of eye catching failures, but there's a lot of dead ends and you do learn from those. So that I mean, in the in a sense when I kind of aggregate all those up, those are probably the most influential ones. In Silicon Valley, where I lived for quite a long time, I learned over time that a failure is something that is important and being, you know, a culture that penalizes

it will kill entrepreneurship and innovation. And third, I learned that the venture capitalists like entrepreneurs that had a failure, provided it was the right kind of failure. So it's

funny you bring that up. I've spoken to colleagues in Europe and elsewhere, and I've heard multiple times when we've discussed the difference between the United States and Europe, they've said, the United States is the country that not only doesn't penalize failure, but practically rewards it, and that's very different than Europe. Yes, that's correct, and a lot of other places. I mean, this is it's really it's a little fuzzy,

but it's really important. Uh yeah, so that's pretty deeply embedded in our call uture and it makes it, it makes us, I think, more dynamic. I totally agree. So what do you do for fun? Well, when you get older, you have sort of changes. So, um, I grew up playing sports hockey, hockey in particular. Um, that's that's the reason I ended up at Princeton to play hockey. Yeah, right, they well, they made a mistake, but I think they're

okay with that decision. They were with Yeah but they wait, so I mean you made a mistake because you turned out not to be a great hockey player. Well, there were a bunch of us, you know, so I think they thought they were gonna have a great hockey team. But we weren't quite as good as they had hoped for. We were we were the Saturday night entertainment. Uh what But the joke about us was we could we we routinely um snatched defeat from the jaws of victory, and

uh but we were fun to watch hockey anymore. No, I played it for a while and then you know, when the kids skated, you know, and for a while, but at some point it's uh, I don't like the way the professional game has gone. You know, when we when I started playing hockey, this is not necessarily a good thing, we didn't wear helmets, and then we wore these helmes, you know, small helmets just to protect you, and we were pretty careful. But where sticks went and

what we did. Um, Now these guys are dressed up like you know, warriors and go to war and go to war. And I just I I like the International Games. Bigger rink, you know, more premium on you know, skating of the type that you saw with Bobby or and Wayne Ring, Wayne Gretzky. I mean, it's just a prettier game. The Um it's funny you mentioned that because I there's

an and I think it's an information issue. Every time we add a safety device to cars, the the accident rate doesn't go down because as people think, oh, I have an air bag and a crumple zone and a BS and a three point safety belt, I could drive faster, and so we end up with safer cars, but no decrease in automobile deaths at all. Yeah, that's a general principle.

I mean it's sort of like Martha's right, maas said every time we you know, our income score or productivity goes up, we'll have more people to use it all up. And we no, no, he didn't adjust for inflation. That was his his big prop um. So let's talk a little bit about these information gaps and structures and markets. What are you most optimistic about regarding uh, information gaps and asymmetries, and what are you most pessimistic about these days?

Basically your work and how it applies. So I think on the optimistic side, I think, you know, properly deployed, that this digital technology does close gaps in a sort of start legally important and inclusive way. So it's a huge opportunity, and it seems to be happening. I mean, this digital divide sort of semi vanished. Uh. The the mobile internet, the mobile phone and mobile internet is kind of taken over the world everything. I mean, it just looks like, uh, it's just a huge winner um on.

But on the same score, I mean, there are these informational gaps and and powerful tools like these can be used to exploit the vulnerable as well. Uh, so you've got more ways to cheat you know, sort of grandmothers out of their savings than you used to you used to have to actually go to the front door and knock. So so there's a like most things, there's a kind of flip side to all these coins. But but I

think that's not an impossible problem to deal with. And uh, if a recent college grad came up to you and said they were interested in a career in either academia or economics, what sort of advice would you give them. Well, I mean, I'd say try it, you know, I mean, I think that people are very different from each other, so and you just don't know, so you've got to experiment. I would experiment and without kind of pre determining what

the outcome is. Um and the other advice that I tend to give it and it's not necessarily what everybody else would give, which is I think planning one's career beyond a certain point is not really a good idea. I think a certain amount of you know, following one's nose, you know, going to the next thing that's really interesting.

But I think the most important thing people do. Happy people are not you know, not achieving some goal, but enjoying the process of getting there, doing something they love every morning. You know, to me, that's uh, you know your family life and and not a career so much as UM a vocation. Right, it makes a lot of sense. And final question, what do you know about the world of economics and information theory today that you wish you

knew forty or so years ago? Well, I wished I knew on forty years ago what the coming digital revolution. I think that's the thing I would have UM. I would have liked to see a snapshot of not for two reasons. One it it would just be fun and interesting to know this is coming and to kind of get ready for it, um. But the other but the other is um, maybe even accelerate it. But the other one is that it it brings into relief some things.

Let me put it this way. Very economic theory always involves simplification, right, And so what what you do in good economic theory is you sort of throw out a bunch of stuff and focus on the things that are important. What What what happens in the course of that is that there are sort of embedded implicit parameters that are never made explicit. You know, things like transaction costs and

whatnot that don't change very much. And then every once in a while something comes along and changes them, and then the models aren't okay because the parameters aren't visible, right.

I think that's what's happening to us now. You know, we have network structures in economies that are only barely starting to be modeled in the sense that, you know, you capture the essence of the way the economy from We're still ignorant about these changes were yet we're mostly mostly we're in the process of trying to you know, build, build the conceptual structures that allow us to think carefully about these things. Quite quite fascinating. Thank you, Michael for

being so generous with your time. We have been speaking with Michael Spence. He is a professor of economics at n y U Starned School of Business and senior advisor at General Atlantic Partners, a giant private equity firm. If you enjoy this conversation, well look up an entry down an Inch on Apple iTunes and you could see any of our previous three hundred or so such conversations we've had over the past five years. We love your comments, feedback,

in suggestions. Write to us at m IB podcast at Bloomberg dot net, Go to Apple iTunes and give us a review. Be sure and check out my weekly column on Bloomberg dot com. Follow me on Twitter at rid Halts. I would be remiss if I did not thank the crack staff that helps put together these conversations each week. Colin O'Brien is our audio engineer, Michael Boyle is our booker. Slash producer Atico val Bron is our project director. Michael

Batnick is my head of research. I'm Barry Retults. You've been listening to Masters in Business on Bloomberg Radio