Which Jobs Are Really Worth Saving?

governments are facing in every country in the world. Which hasn't got on top of COVID nineteen, Which jobs should we try to save and which are already lost? Our Spanish economy reporter Jeanette Newman has been spending some time on the front lines of the battle to save jobs in the ancient Spanish city of Cardi. She also found another Johnny Cash fan while she was down there, or will be revealed in a few moments later on. You will also hear the economist John k and Support Collier

explain exactly why Greed is Dead. Could have fooled me, I hear you say, Well, you can listen to them explain their new book and decide for yourself. But First, here's janet That cacophony is coming from inside a factory. At a storied ship building on Spain's Atlantic coast, dozens of welders, riggers and engineers are piecing together five warships. It's their first big naval contract in years. For centuries, shipbuilding has been a vital part of the economy here

in the Bay of Cadi's. The bay has a privileged position next to one of the world's busiest waterways, the entrance to the Mediterranean Sea through the Straight of Gibraltar. At its peak in the early nineteen these, this shipyard employed nearly four thousand workers. Demand was high for warships and oil tankers. Since then, South Korea and China have eclipsed Europe in Nadi ship building. Now the shipyard employs around six hundred workers, the same number it had in

the eighties. Juan Carlos Carrascal oversees the factory at the ship builder called Nevantia. That's always looking for a more skilled people instead of a lot of my power, always under looking for efficiency. As I walk across the shipyard, I see black smoke rising in the distance. Hundreds of furloughed workers at a nearby aviation company are burning tires.

They're protesting and pending layoffs triggered by the pandemic. Those desperate aviation workers lie at the heart of a debate in Europe about how to wind down programs that have preserved millions of jobs. COVID nineteen has upended the airline industry. We will no longer need to fly to attend every meeting in person. Some people think those protesters are fighting for an industry that might never fully recover. You could

say they're the Spanish shipbuilders of their day. If that's the case, the argument goes, then Europe's governments and companies should rethink the need to keep spending billions to preserve such jobs. Yet others warned that pulling the plug too soon could lead along spells of unemployment for workers in heart hit sectors. That's something that many naval shipbuilders have

also faced. Before we delve into that debate, though some contexts on how European governments have responded to the pandemic. I spoke to Katrina Utama. She's a senior economist at financial services company Allians and Frankfort. When the pandemic hit Europe in the spring, Most countries wanted to avoid mass layoffs, so they put in place what are known as furlough programs.

Furlough schemes allow employers to reduce their employees working hours instead of laying them off, and the government then steps in and replaces a large part of the lost income. In the range of sixty and why did European governments choose to do that. The idea is to retain human skills um and to allow for a quicker um snapback, let's say, of the economy, because the workers are in place and um um and are ready to go as the recovery starts to unfold. The results of furlough schemes

in Europe are nothing short of remarkable. Um. At the peak of the crisis, around a fourth of Europe's workforce, or what we calculate as thirty five million jobs in the five largest economies alone, benefited from these schemes. Compare that to the US. American companies fired millions of workers when the pandemic had The government then stepped in to provide more generous unemployment benefits, but they didn't try to prevent mass layoffs in the first place. Why did Europe

do things differently. There are a lot of reasons. For one, many European economies aren't very dynamic. Once a worker is fired, it can take a long time to find a job again. The furlough programs were meant to be temporary, but this crisis has turned out to be more of a slog than many expected. So Spain, Italy, France and Germany keep extending the furloughs. That leaves them in a tough position when and how do they pull back on their aid.

There has to be this re calibration of UM, the labor market support UM to target in particular viable jobs and less so what we have coined zombie jobs, because we think that in some cases, and actually we say that about every fourth worker that is currently taking advantage of a furlough scheme is at risk of not returning actually to the office or to the work days. Francisco Rometo and Mariano Serrano understand all too well the risks

that Katarina is talking about. Both were among the protesting aviation workers I saw in Cutty's. I spoke to them and their wives at a nearby restaurant. They have been on furlough since March. Now they might be laid off. Almost said, We're going to be just the beginning. We're going to be the tip of the iceberg. Francisco and Mariano work assembling airplane parts. Their company, Alesties, is one link in a chain of aviation companies in the region.

Of course, their jobs are viable. Mariano says, well, we're thinking a matter of six months. If there's a vaccine in six months, eight months, things will keep working juice like always when things come back to normal. But what if the slowdown in aviation isn't temporary? Economists say one solution is to retrain workers who are laid off, to give them the skills they need to get jobs in a sector that is growing. I asked Mariano and his wife Manoli what they think about that. They shake their

heads and laugh. I have that more courses, then, what can I tell you? I've done all kinds of courses. I tried to put away all the books he had, and they didn't even fit on the bookshelf. Francisco was sixteen when he began to work at one of the shipyards here. It was the nineteen eighties. Two years later, the ship builder announced the restructuring Francisco was out of work.

He's had spells of unemployment since then. That's when he's done some of those training programs, building solar panels and wind turbines, learning to weld. Mariano agrees more training isn't what's needed. They both just want to keep their jobs. There's a ton of people in Cartage who are well trained, incredibly well trained. But the thing is that doesn't come with a key ingredient, which is industry. I want to emphasize that what God these needs is more industry. This

doesn't need any more hotels or bars. Mariano raises an interesting point. The pandemic has upended the aviation sector, but other industries are bouncing back, and so were Germany and other European countries whose economies rely more on manufacturing. Places like Spain, where the economy is powered by services, hotels, restaurants, bars have been particularly hard hit. Most of the employees who are still on furlough in Spain work in the

services sector. I wanted to know how companies and workers are faring as we head into low season. Tourism is important in this region. Hotel owner agrees to speak with me and Rota a town. That's a ferry right away across the Bay of Caddis. Once I'm there, I take a taxi. The driver is playing American country music. I've been in many taxis during my time in Spain, and I've never heard country music through face masks. The driver and I talk about our favorite singers as a classic.

The wistful music seems to match the driver's mood. It's been a bad summer, he says. There haven't been many tourists, and trouble is brewing at the aviation companies. It's only going to get worse, he says. We arrived at the play at de la Lous. Hotel owner Stephen de Clerk comes out to greet me. The building where we meet was an abandoned nineteenth century tuna factory before Stephen's Belgian grandfather bought it and turned it into a hotel. We

sit down in the restaurant. I asked him what's happening with his workers in the fur Low program known as edites in Spanish. They're starting to go to the again. They're going back, They're going back to the editors. Stephan had just closed one of his hotels the day before we met. Occupancy was only a fifteen percent. They're closing every day, hotels all over so because it's it's they

there is no demand, there's no tourism. So but I tell you, if I close, we have a lot of costs too, So so that's why I tried to to keep open. Hotels that are closing and more workers in the furlough program, I mean less tax revenue for the Spanish government and higher costs. Remember, the state is paying a large portion of the salaries of furloughed workers. That puts Spain in a bind. The country already had a huge pile of debt and a big deficit when the

pandemic hit. That limited its ability to offer financial support to companies and workers. At the same time, though, Spain had to respond decisively because it was one of the hardest hit countries in Europe. Further complicating things is the fact that the Spanish economy isn't very dynamic. Economists talk about creative destruction let companies go bankrupt, for instance, because people will create new ones, but in Spain created destruction

usually just ends up meaning destruction. The labor market in particular does not rebound quickly. Stuff And says the employment laws are very strict and very and not flexible for the company. So Spain couldn't really afford to act decisively, But at the same time, it couldn't afford not to because the damage would have been even worse. Stephan is frustrated about what this fiscal predicament means for him. The Spanish furlough is less generous than in some other countries.

I looked to German and to Belgium and and and the area. The economy goes well, much better than in Spain. And like I told the Germany is helping and with rites until aimed aimed of twenty one, and Belgium too, So I think these countries are they're doing it better than us. Spain's program is said to expire at the end of January. Stephen says many hotels will go bankrupt if that happens. We are demanding that it will be a standard at least at March one. And why is

that important? Because we started the new U seed. The season starts for us in the area starts around March April. So if if we keep that until March, maybe, if if if God's help us, well, we will have a kind of a normal situation next year. So that's we are. We're we're praying now for that, and we're trying to work for that. Leaving the hotel, I can see the shipyard cranes towering along the shoreline, a reminder that jobs, industries,

and economies don't always bounce back as expected. Europs for low programs were meant to be temporary. The crisis has proved to be anything but, so the programs have been extended. It's likely that the scars from the pandemic will be deeper than we expect. Your Jeanette Newman, Bloomberg News. You could hear they're our short term crisis over jobs and the cost of government support packages has also been forcing Spain to confront long term choices about the direction of

the Spanish economy. The same could be said of Europe and the US generally. Now. Two people who think that kind of debate is long overdue are the economist John k and Support Collier. You may know John. He's been a columnist for the Financial Times for many years. It's also my first boss a long time ago at the London Business School. He's written many excellent books, mainly about economics, including most recently the book Radical Uncertainty with the former

Bank of England Governor Lord Mervin King. So Paul Collier's known more for his contributions to development economics, though more recently he's written modest book called The Future of Capitalism. We had an online conversation recently convened by the Royal Society for the Arts in London about their new book Greed Is Dead, which for an economics book, contains a surprising amount of political philosophy. I started by asking John why they wrote it. So, Paul and John, thank you

very much for talking to me. John, let me start with you just to get more of a sense of what this book's about and perhaps how why you decided to write it. Yeah, this book originated Stephanie in our lunch we had in Arrest Thai restaurant and Oxford called

the Giggling Squid for some incomprehensible reason. And I was as I've just recently finished the book you describe on Radical Uncertainty, while Paul, as you will, also mentioned and written The Future of Capitalism, and we were talking and I really I was aware that what I wanted to do next was to write a book about something about business, emphasizing that the presentation of business essentially as a group of individuals who happened to find it convenient to get

together every day and work together, failed to recognize that successful businesses, particularly the knowledge businesses we have in the twenty per century, are made up of essentially communities of people were able to solve problems together. That seemed to me a much more powerful way of thinking about business than the reductionist approach which has dominated economics for last

fifty years. And Paul was interested in many of the same issues, but from the rather different angle of communities of place. So, um, what is the community of place? We're hard wired for community, Stephanie. He said, we were drawing a lot on philosophy in the book, but we're also drawing a lot on modern evolutionary biology. And the news from modern evolutionary biology is really very good for people who believe in communities, both communities of work and

communities of place. We're very distinctive. Mammals were designed, were hardwired to bond to each other and for mutuality, for reciprocity, for pro sociality. The big bad idea that we aim to demolish in modern economics is that notion that greed is good, which came out of the idea that humans were basically economic. Man were gredient, selfish, and greed was therefore the fuel which got people up in the morning and and fueled capitalism. If that was the fuel, greed

was good, well it isn't. It isn't the fueler capitalism. The fueler capitalism is our ability to work together around a common purpose and to imagine and create. So we're very well designed both for communities of purpose, whether they're per communities of work or community of place, and we're very well designed for radical uncertainty because if you're if you're in a world radical uncertainty, you need to work out what to do. And we're hardwired for creativity. We're

very imaginative. And so the fuel of capitalism is not greed. It's that collective common purpose and imagination and creativity. And when we say greed is dead, the normal responses to say, but look around you. The world is it's absolutely saturated. Increase as saturated in greed is actually the first the opening sentence of greed is dead. What we mean by greed is dead is intellectually the pillars that built the notion greed is good and now untenable, and so that's

why we're saying greed is dead. We are now at peak greed because gradually these ideas will filter through. So let me turn just to pick up on John's queue of communities of place. Um, we need communities of place because so much of our public policy and our lives are lived in place. Our politics isn't very heavily dependent on place, and what's happened recently is big spatial divides. We've seen it in Brexit, which was basically a mutiny

of provincial Britain against London. We've seen it with Trump, which was basically a mutiny of provincial America against the metropolis. And so rehealing that that's what's really needed in the community of place, restoring community of place. Let me pass back to John, because we've got lots of ideas about

how to do it. You know, we're learning a lot about this interaction of communities and place and work in the current in the current crisis, we um, the three of us are able easily to this productive conversation together over zoom. We're able to do that because actually we've met each other in real life quite frequent in the past, and quite a lot of businesses are discovering to their surprise that they can conduct business reasonably well over zoom

and other online aids like that. Would they be able to do that if people hadn't been able to meet each other, work together, talk to each other, form relationships with each other in the past, I doubt that. Can you know the community of place which happens in the office can be conducted online because it is a community of people who are used to working together. Did you come away hopeful after writing this book? Because one could read it as saying, yeah, we really are in a

bad way and I can't see a way out. We're not saying we can't see a way out, but we've been going in many ways in the wrong direction. For in recent decades in the business area, we went badly in the wrong direction. With the fifty years since Freedman wrote that notorious article, the social responsibility of business is

to maximize its profits. The social responsibility of business is actually to produce goods and services that people want, to provide satisfying employment, to meet the needs of the communities in which business operates. That's the social responsibility of business, and I'd contrast that on the one hand to the

social responsibility of businesses to maximize its profits. But in the other the social responsibility of business is not to do good social responsibility of business is to do good business. And that's true of all the other communities we're talking about. As far as business is concerned, I think that the pendulum is at least swinging back in the right direction.

It's got a long way to go before it gets to the central position it was in fifty years ago, but we are now getting a fairly satisfactory reaction to that, and that's what business needs. And business needs to stop describing itself in ways that actually are actually both repulsive and do not correspond to the reality of what successful

business is actually like. I thought I was wonderfully bracing in the book that you point out that any company that's really tried to implement that very individualistic business model has tended to do extremely badly. Yeah, it's almost funny the extent to which that is true. Classic, of course, was Burst Earns, which was the business that had a sign above its trading floor saying we make nothing but money. And what happened towards in the long run they turned

up or not to make that either. I've been writing a little piece for myself on called The Fall of the Icons, which runs through how the businesses which we would have regarded as paragons of good business fifty years ago. I see I Marks and Spencer in this country, General Electric, Sears, Roebuck in the United States, one after the other. These businesses have been damaged by essentially this individualistic approach to what businesses are like. And there are just so many cases.

The most extreme case is actually Deutsche Bank, which has moved from being h the bank that was the powerhouse of financing German industry, into an essentially a failed US hedge fund. And for that to happen in twenty five years is a quite extraordinary and entirely negative achievement. I'm going to go back to question, are we hopeful greed

is dead? Is a prediction. It's a very hopeful book, and it says we're at pete greed and why we are at pete greed because gradually ideas filter through, ideas matter, and the ideas on which peak on which greed was founded, these individualistic ideas turn out to be just wrong that they are against the grain of the new evidence from evolutionary biology. There against the grain of the evidence from business performance. They're just not how we are designed to

work well together. And those ideas will gradually filter through, and you see it in a tidal wave of new books basically all along a communitarian theme and by some very influential people across the board. And so I think intellectually we are already comfortably past pepe greed. Those ideas will take a decade to filter through, but they will, And of course COVID as an accelerator, because COVID is a splendid example of the need to come together. Just

look around Europe. The most successful country as far as I can see as Denmark. It's had about the lowest economic hit and about the lowest mortality hit. So it's not even set it up as a trade off. Do we save the economy or do we save people? It save both. Why has it done that because repeatedly over the decades, Denmark has demonstrated an ability to work together

for a common purpose. That's why on all the indicators the subject give indicators of well being and happiness, the objective indicators of lifestyle, it comes out as top in the world, and so along comes this new crisis of COVID and Denmark, unlike a number of other countries, has a very modest leader, a very ordinary person, very humble person,

single mother. When she says we people listen, I think a lot of people would wonder for those countries that have gone down the individualist route, that have trashed many of these institutions and find it with social media particularly harder and harder to have single conversations around important matters

and constructive dialogue. Are you not concerned that we now have taken away the levers in those societies to get back to a better equilibrium, that we might in fact be trapped on a bad and a bad equilibrium where without any of the tools to be able to go back. I think that's right. I think that there's a real worry there. And one of the things we trace in the book is the way that the organization of political parties,

the historic organization, essentially collapsed after communism collapsed. What we need is actually a rebuilding of political parties and political institutions around about some of the ideas we've talked about. The question which you posed right at the beginning, which is the question of what are economists doing writing about political philosophy? And the answer to that, and my answer to that certainly is I don't think we've anything new

to say about political philosophy. But what has happened is that over the last half century, economics became associated with a particular political philosophy that was at odds with how successful business and economy is actually operated. And we're trying to redress that. So thank you both very much, Support

Collier and John Kay, thanks for listening to Stephanomics. We'll be back next week with more on the ground reporting and analysis of the economic fallout from the COVID pandemic and anything else we think is important that's happening in the global economy. Remember you can always find us on the Bloomberg terminal, website, app and wherever you get your podcast. And for more news and analysis through the week from

Bloomberg Economics, follow us Economics on Twitter. This episode was produced by Magnus Hendrickson, with special thanks to Jeanette Newman, Rodrigo, Arduela Alonso Soto, Laura Milan, Thomas Galtieri, John k Sir Paul Collier, and the Royal Society for the Arts in London. Lucy Meekin is the executive producer of Stephonomics and the head of Bloomberg podcast is Francesca Levy.