Adair Turner's Keynote Address

It has been a slow morning for interesting material.  I have been watching some of the videos from the INET conference in Berlin.  This video address by Adair Turner was thought provoking.  He commented on three challenges in the global economy.  While he is not opposed to growth, he argued that the rich countries have enough output to satisfy the needs of its citizens.  He believes that economic stability in these countries is a more important goal than squeezing out an even higher growth rates.  He also believes that manufacturing jobs will continue to fall as a percent of global output.  He likens it to the decline in agricultural jobs as a result of productivity growth.  Productivity in manufacturing will have a similar affect as well as the composition of output.  For example, computer products and other high tech products,  do not require large labor forces.  Globalization is a factor in some countries, but global manufacturing jobs will decrease no matter where products are produced.

Income inequality is another major problem, but it is difficult to change the pretax distribution of income.  He believes that post-tax inequality can be shifted by the use of more progressive tax policies, but he did not spend much time on that topic until the Q&A period that followed.  There were lots of good questions raised in the Q&A.  Inequality will become an even more important topic if the economic pie is not growing.  How the economic pie is divided will become the focus of attention.

The third topic was climate change.  He has been a member of the British group that has been setting the long range emission reduction goals.  He does not think that a purely economic approach to the problem is sufficient.  Even though net present value calculations show that the economic cost is relatively low, it is really an issue of fairness.  We have a responsibility to future generations to leave them an ecologically sound planet.  He is not against carbon taxes, and other means to factor in the true cost of fossil fuel consumption,  but he is skeptical about how well that might work. Again, it is a fairness issue and not a purely economic issue.  The Q&A on this topic was very good.  Climate change was one of major topics discussed at the conference and there were lots of well informed questions raised.

I also was interested in the way that Turner delivered his address, and how he dealt with questions.  Its hard to imagine a more confident and polished speaker making a presentation to a very knowledgable and critical audience.  Its easy to see why he has been so successful in his multifaceted career.