Latest / King Dems Podcast | Growth Mindset, Leadership, AI and Business Insights / Wealth, Trade & Growth Mindset: Shanker Singham on Global Economics & Human Flourishing

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Wealth, Trade & Growth Mindset: Shanker Singham on Global Economics & Human Flourishing · King Dems Podcast | Growth Mindset, Leadership, AI and Business Insights

• 0:00
  So when I talk about wealth creation, I'm really talking
• 0:03
  about the realisation of ideas. So the journey from idea
• 0:07
  generation to idea crystallisation, you know, money
• 0:10
  is just a measurement of how how effective you are at that
• 0:14
  process. So that's when I talk about
• 0:16
  wealth, that's what I'm talking about.
• 0:18
  And the sort of final thing that I've sort of learnt is that
• 0:21
  competition is the most powerful force we know to actually create
• 0:24
  wealth. And we kind of, you know, know
• 0:26
  this intuitively ourselves, you know that nobody.
• 0:29
  Forces of demand and supply. And nobody wants to compete.
• 0:32
  You know, I used to be a a 400 metre runner and you know, I
• 0:36
  found that I always had my best races from the outside lane,
• 0:41
  largely because when you're in the outside lane in a 400, you
• 0:44
  run on fear. But if but nobody wakes up
• 0:46
  thinking, oh I'd love to compete today and everyone wants a quiet
• 0:49
  life. Welcome to the King Dems
• 0:56
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• 0:59
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• 1:03
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  I encourage you to take that first step.
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  If you've been thinking about it, sometimes the best
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  investment you can make these. Game yourself, ladies and
• 2:27
  gentlemen, life once again welcome to the Kingdom's podcast
• 2:31
  and the diary of the CFO. And today I've got would be a
• 2:34
  very, very important guest fighting out of London, England
• 2:39
  by way of Washington, the CEO of State of America, the Qualcomm,
• 2:43
  Shankar Singh. How are you, Sagar?
• 2:47
  I am very well. Thank you.
• 2:49
  Very good to be on. Whoa, whoa, whoa.
• 2:51
  I'm so grateful, you know, having you on the show, like I
• 2:54
  told you before we started that I told you, you don't want us to
• 2:57
  do this. But you know, the saviour,
• 2:59
  there's a real, there is a way. Not many people are privileged
• 3:03
  to have to be in space, to have their body of work have global
• 3:15
  impact and global relevance. And you do that.
• 3:18
  And I'm super grateful to have this discussion with you.
• 3:22
  Growing up, I read a lot of great minds, the body of work
• 3:27
  with great minds, top philosophers, you know, the
• 3:30
  ancient philosophers, the Greek philosophers like Socrates,
• 3:34
  Aristotle, Factory, even contemporary ones like we think
• 3:38
  Churchill. A lot of people did not know
• 3:40
  Winston Churchill was actually a great writer, won the Nobel
• 3:43
  Prize for literature. And imagine the privilege of
• 3:47
  having conversations with these great minds.
• 3:50
  And I'm privileged to have conversations with the great
• 3:53
  minds of my own time. I feel very blessed.
• 3:58
  I feel very, very blessed. Also good welcome.
• 4:01
  So I've actually pinned down this introduction and give you
• 4:05
  flowers. So you sit back and while I do
• 4:08
  the honours. So today are the King Games
• 4:10
  broadcast and Gary the CFOI have the honour sitting down with one
• 4:13
  of the world's most respected voices on trade, competition and
• 4:16
  economy prosperity. Shankar Singh Khan as chairman
• 4:20
  of the Growth Commission and CEO of competitor Shankar has
• 4:24
  advised across the globe offered Seminole works like a general
• 4:29
  theory of trade and competition and set as a trusted force to
• 4:33
  policy makers at the highest level.
• 4:36
  From shaping global trade policy to exploring how open and
• 4:39
  competitive markets feel human flourishing, these Carpier has
• 4:44
  been dedicated to helping nations unlock prosperity.
• 4:47
  Today, we'll dive into the pressing challenges and
• 4:51
  opportunities of global trade and also explore personal
• 4:54
  philosophies. The Dragons work.
• 4:56
  Shankar, welcome to the show. Thank you very much.
• 4:59
  It's great to be here. You're always welcome, of
• 5:02
  course, you know, let's talk about the foundations and of
• 5:05
  course, the philosophies. You've been described as one of
• 5:07
  the leading global experts in trade and competition law.
• 5:11
  What's packed your passion for these subjects, and how has your
• 5:14
  personal journey shaped your perspective on economic policy?
• 5:17
  Well, what's really shaped me is, is the experience at the
• 5:24
  coalface working with companies that have been trying to trade
• 5:30
  and improve economic opportunities for consumers
• 5:36
  around the world. What I've seen in the course of
• 5:39
  the last 30 + 35 almost years in doing this is that there are
• 5:44
  various barriers to economic growth that we see.
• 5:47
  Some are obvious, like tariffs and trade barriers that are,
• 5:50
  that are at the border. Some are less obvious.
• 5:52
  And in fact, the less obvious ones, the ones that damage
• 5:56
  economic growth, you know, inside the border are much
• 6:00
  harder to deal with. And so I spent a good bit of
• 6:03
  time trying to sort of understand the interaction
• 6:05
  between all of the different restrictions that apply.
• 6:09
  And I guess what, what I've come to believe and it is, it has
• 6:13
  been a journey as you, as you pointed out, it's not something
• 6:17
  I sort of grew up believing in. It's something I sort of came
• 6:20
  to, which is first of all, the wealth is, can be created or
• 6:24
  destroyed, but it's very easy to destroy and very hard to create.
• 6:30
  Absolutely. And when we talk about wealth
• 6:32
  also that it's also important to understand, you know, we need to
• 6:35
  use language. And you quoted a few people,
• 6:38
  Aristotle and so on, who talked a lot about language use
• 6:41
  language, you know, very, very precisely.
• 6:44
  So when I talk about wealth creation, I'm really talking
• 6:47
  about the realisation of ideas. So the journey from idea
• 6:51
  generation to idea crystallisation, you know, money
• 6:55
  is just a measurement of how how effective you are at that
• 6:59
  process. So that's when I talk about
• 7:01
  wealth, that's what I'm talking about.
• 7:03
  And the sort of final thing that I've sort of learned is that
• 7:06
  competition is the most powerful force we know to actually create
• 7:09
  wealth. And we kind of, you know, know
• 7:11
  this intuitively ourselves, you know, nobody.
• 7:14
  Forces of demand and supply and. Nobody wants to compete.
• 7:17
  You know, I used to be a a 400 metre runner and you know, I
• 7:21
  found that I always had my best races from the outside lane,
• 7:25
  largely because when you're in the outside lane in a 400, you
• 7:28
  run on fear sort of. But nobody wakes up thinking,
• 7:31
  oh, I'd love to compete today. Everyone wants a quiet life.
• 7:34
  In fact, there was a famous Supreme Court judge who said the
• 7:37
  best monopoly prophet is a quiet life.
• 7:41
  So, you know, nobody wants to compete, but we also, we all
• 7:44
  know that competition makes us better.
• 7:46
  It takes us to a place that we wouldn't otherwise be be able
• 7:49
  to, to, to, to, to reach. And that's, it's such a powerful
• 7:52
  force in, in the sort of human psyche.
• 7:55
  So those are the kind of principles that that we need to
• 7:58
  apply to economic systems. And the test of a of, of an
• 8:02
  economic system that works is how well it applies those forces
• 8:06
  and how will it therefore allows wealth to be created and
• 8:09
  prosperity to be unleashed. And that's kind of what I've
• 8:12
  been working on for my career, really.
• 8:13
  Wow, There's a lot to unpack what you've just said.
• 8:17
  First of all, I feel very, very people as you know, having these
• 8:21
  conversation because I do have a first degree in economics for
• 8:25
  the habit of bacteria that is a bachelor university.
• 8:29
  And when I was given the opportunity to have this
• 8:32
  conversation with you very sad out to quote it our partners,
• 8:38
  you know, they brought up the topic and said would you like to
• 8:42
  speak with this expert? It was a no brainer have a first
• 8:46
  degree economics, even though I never worked as an economist,
• 8:49
  you know, I keep it head into accounting work for the global
• 8:53
  be for accounting terms and you know, MBA entrepreneurship
• 8:57
  economics is at the it's a better because everything I
• 9:00
  would do like to social science. Man is a social animal and the
• 9:06
  financial the economic behaviour of man is what is studied in
• 9:11
  economics. You know, you have a macro and
• 9:13
  across the micro and you talked about competition.
• 9:16
  You talked about, well, you know, being easy to destroy and
• 9:21
  difficult to create just to bring it to a granular level for
• 9:25
  our audience for the lead man. You reminded me of something I
• 9:27
  was explaining to your friend. I said, look at this building.
• 9:30
  You have a beef. It's it's a five Storey
• 9:32
  building. How many months do you think it
• 9:34
  took to build this building? Maybe or yeah, but you know, we
• 9:38
  could hire contractors to bring break it all down in one day.
• 9:43
  So that is your classic example. It's very, very easy to destroy,
• 9:48
  but difficult, you know, to build.
• 9:50
  And you know, I come from Nigeria.
• 9:53
  Big shout out to my people. I'm always with my Nigerian
• 9:55
  flag. I love my country a lot and it's
• 9:59
  a developing economy and development economics is a whole
• 10:03
  branch of economics on its own. And I remember a lecturer called
• 10:07
  Rest His Soul taught me in university, he was fond of
• 10:11
  seeing something probably about Nigeria as a developing economy
• 10:15
  is the fact that we produce what we don't consume and we consume
• 10:19
  what we don't produce. And I'll tell you something,
• 10:23
  targeting economics helped me to shift my perspective in life.
• 10:26
  And you know, when you talk about the competitive advantage,
• 10:29
  it's interesting we're talking about competition here.
• 10:33
  I thought to myself, what are my talents as a person growing up,
• 10:36
  I used to sing and I used to speak, have presentations, but I
• 10:41
  oftentimes met people who could sing better than me.
• 10:44
  But I never really met people who were good at having
• 10:47
  intellectual conversations like myself or presentations.
• 10:50
  And I decided to go for the competitive advantage.
• 10:54
  Like, OK, I know I could be the best in the world at this stage.
• 10:58
  And as we speak right now, I I have two globally ranked
• 11:01
  podcasts. The King Games podcast is ranked
• 11:03
  global top 2.5% carrier for CF OS ranked global top 5%.
• 11:09
  And just to give you context, both shows are less than two
• 11:13
  years. The second show that is ranked
• 11:15
  global top 5% is just three months old.
• 11:18
  We need to within three months and two top 5% in the world.
• 11:22
  That means you have actually taken the line of your
• 11:25
  competitive advantage as an individual.
• 11:28
  But now we bring it back to, you know, the macro level and also
• 11:32
  not forgetting the micro level as well.
• 11:34
  If your work. You always talk about human
• 11:37
  flourishing. So can't you explain how trade
• 11:41
  competition policy directly affects the everyday lives of
• 11:44
  ordinary people? Yeah.
• 11:46
  So if you sort of think about what I described as a sort of
• 11:49
  fundamental principles of economic growth, why does why
• 11:52
  does economic growth matter? It matters because what what is
• 11:56
  an what is an economy? An economy is essentially a
• 11:59
  series of billions of voluntary exchanges between human beings.
• 12:03
  You know, so, so for you're an entrepreneur, if an entrepreneur
• 12:07
  comes up with a particular product that people want, then
• 12:10
  they're meeting a human need. And they, you know, people come
• 12:14
  together in voluntary exchange to meet human needs.
• 12:16
  And there are billions and billions of these transactions
• 12:19
  going along at along at any time, you know, in the world.
• 12:22
  And what you want to do in a, in a society and in a society where
• 12:26
  human beings flourish is you want to ensure that there is,
• 12:29
  there are as few barriers as possible to those kinds of
• 12:32
  voluntary exchanges. So there's nothing in the way of
• 12:36
  those people seeking to meet human need in the in the, in
• 12:39
  those voluntary exchanges and all sort of theory of this is
• 12:43
  the things that get in the way of those voluntary exchanges, we
• 12:46
  call anti competitive market distortions, which, which are
• 12:49
  essentially anything distortions a good word because if you think
• 12:52
  about a radio signal, for example, it's distorted when you
• 12:56
  know the pathway between the listener and the and the signal
• 12:59
  itself is somehow obscured by by something.
• 13:02
  And that's kind of how distortions work in the global
• 13:06
  economy. So what we're trying to do is
• 13:08
  say, well, can we measure these distortions?
• 13:10
  And I've developed an economic model that allows people to
• 13:14
  allows you to measure the economic effects of these
• 13:17
  distortions. And it's significantly worse
• 13:19
  than people think. It's measured in terms of losses
• 13:24
  to productivity and losses to GDP per capita.
• 13:29
  Essentially, that's household income.
• 13:30
  So, you know, a particular distortion might cost the
• 13:34
  average person in Nigeria, for example, if the distortions in
• 13:38
  Nigeria, you know, it might be $500 per person per year, it
• 13:42
  might be $5000 per person per year, but it's it's going to be
• 13:46
  something. And what is very important with
• 13:49
  regard to human flourishing is, you know, it applies
• 13:54
  differentially between between different people.
• 13:57
  So if you're rich, this distortion is inconvenient.
• 14:00
  You know, if the price of bread goes up by as a result of a
• 14:04
  distortion, if it goes up by, I don't know, 10 percent, 20%, if
• 14:09
  you're rich, it's kind of a inconvenience.
• 14:11
  If you're poor, it's a catastrophe.
• 14:13
  So and it can be the difference between, you know, choosing food
• 14:17
  versus heating versus, you know, all of these different things.
• 14:20
  So it's the bottom layer of the socio economic sort of ladder
• 14:25
  that are most affected by these distortions and also most
• 14:28
  affected by reduction of these distortions.
• 14:31
  So if you want to let people be free and you want to allow them
• 14:35
  to aspire and to reach higher levels for both themselves and
• 14:39
  their children, you've got to get rid of these kinds of
• 14:41
  barriers and these these kinds of distortions.
• 14:43
  Now you might think, well that that's obvious.
• 14:46
  So, so why doesn't it happen? You know, if it's so obvious?
• 14:48
  The problem we have is that there are beneficiaries of these
• 14:53
  distortions and the beneficiaries of these
• 14:55
  distortions tend to be the vested interests who want the
• 14:59
  status quo to be to be preserved.
• 15:01
  I mean, they, they basically, they basically benefit
• 15:04
  enormously from the, the lack of competition, keeping the, the,
• 15:08
  the potential competitors and the new entrants out of this
• 15:11
  allows them to raise their prices and, and make more
• 15:15
  revenue. And so those people tend to be
• 15:17
  very politically powerful. And in fact, when you look at
• 15:20
  developing countries, and we've done this work in about 80
• 15:23
  different countries, they tend to be even more powerful in
• 15:25
  developing countries. And almost the smaller the
• 15:27
  country, the more powerful these kinds of forces actually are.
• 15:31
  And so the people most in need of reform are the ones who find
• 15:35
  it most difficult to do it. And so that has been a big
• 15:38
  challenge in the global economy. And that's one of the reasons
• 15:41
  why, you know, we haven't seen the level of economic growth
• 15:45
  that we'd like to see in in, in the world.
• 15:48
  In fact, if you look at the way global GDP has has moved in the
• 15:52
  last, let's say 2000 years between 0AD and let's say 1930
• 15:59
  before the First World War, the global economy grew by only a
• 16:03
  fact. It doubled essentially in size
• 16:05
  in that almost 2000 years between 1947.
• 16:08
  After the Second World War and 2001, in that 50 or so year
• 16:13
  period, it grew by a factor of 7 or 8.
• 16:15
  So it it it, it, it doubled in 1900 years.
• 16:20
  And then after the Second World War it grew by a factor of 7 or
• 16:24
  8. So it's real hockey stick kind
• 16:26
  of graph and the, and the question is what's what caused
• 16:30
  that? What's the reason for that?
• 16:32
  And it, the power of it is not to be underestimated.
• 16:35
  I mean, we, we managed to reduce the number of people living on a
• 16:39
  dollar a day. The sort of absolute poverty
• 16:42
  level. We actually reduced that by
• 16:44
  before the financial crisis, we, we reduced it to zero.
• 16:47
  There were, there was nobody in the world living on less than a
• 16:51
  dollar a day. Unfortunately that is now
• 16:54
  increasing again. Growth has sort of fallen off in
• 16:58
  the last 25 years and that's one of the reasons this has this has
• 17:01
  happened. But and actually in particular
• 17:04
  developed country growth has also fallen off in the last 25
• 17:07
  years. So what we're trying to do in
• 17:09
  our modelling is sort of explain to people what is being lost by
• 17:13
  these kinds of distortions so that those people who want
• 17:17
  reform are better able to achieve it because they're
• 17:20
  better able to communicate the gains of reform in a way that
• 17:23
  they haven't really been able to do in the past.
• 17:26
  Wow. You touched a lot of things, a
• 17:28
  lot to unpack, right? In economic, technical terms,
• 17:31
  price of elasticity, price sensitivity.
• 17:35
  You also talking about Museum of Power priority, but who better
• 17:41
  to speak to than a professional and an entrepreneur who actually
• 17:48
  comes from a developing economy, right?
• 17:51
  I will see it as a tease. I'm pretty sure that you studied
• 17:55
  economics and to understand in depth, you know, these terms
• 18:00
  that you are actually doing a very, very great job to
• 18:05
  simplify, right? I appreciate how much you are
• 18:08
  simplifying these things or you dropped a question, you know, as
• 18:12
  to why this, you know, things or these patterns are ongoing
• 18:18
  without an end. And it reminds me of a
• 18:20
  particular, you know, concept that are studying in Congress
• 18:25
  and it's called the vicious cycle of poverty.
• 18:28
  A lot for you to touch in it. You know, while we we we set way
• 18:32
  into the next question, talking about the global trade dynamics.
• 18:36
  I really want us to touch on the the elephant in the room, the
• 18:40
  reason why I quoted brought us together.
• 18:42
  And, you know, it's the big one, the US, China trade nation.
• 18:46
  How do you see, you know, China's industrial policies and
• 18:50
  overproduction affecting global markets and of course, the US
• 18:54
  industries as the US are very, very, very vocal about this
• 18:59
  right now, especially from a political standpoint.
• 19:02
  And of course, in your experience, like what roles?
• 19:05
  Do. These trade negotiations play in
• 19:08
  addressing balances and what mistakes to policymakers often
• 19:13
  make in these conversations. Yeah.
• 19:15
  I think to answer that, you sort of got to go back to how we got
• 19:18
  here. And so if you look at that
• 19:20
  period, I talked about that huge impact on economic growth and,
• 19:24
  and lifting people out of poverty.
• 19:25
  A lot of that was to do with the international trade system that
• 19:28
  was designed to remove a lot of these barriers, you know, when
• 19:31
  after the Second World War. And perhaps one of the reasons
• 19:33
  for the Second World War was the, the sort of very high
• 19:37
  tariffs between countries and very the difficulty of trading
• 19:40
  between countries. A lot of those sort of border
• 19:43
  barriers, the obvious barriers that I talked about went down in
• 19:47
  the course of those trade negotiations that happened after
• 19:50
  the Second World War. But we came to a sort of stop
• 19:54
  after the 1980s when the what's called the Uruguay Round, which
• 19:58
  is the the the trade round between 1986 and 1994.
• 20:02
  Concluded what was supposed to happen is we were supposed to
• 20:05
  move through the 1970s and the 1980s to deal not only with the
• 20:09
  tariffs, the border barriers, but to deal with these internal
• 20:12
  distortions as well. Now, at the same time some big
• 20:16
  things were happening, you know, the the fall of the Soviet
• 20:18
  Union, a lot of these countries were coming into the
• 20:21
  international trading system. They had a legacy of a lot of
• 20:24
  these kinds of barriers and distortion.
• 20:26
  India moved from being a country that was entirely sort of import
• 20:31
  substitution to open to, to, to, to trade and open to markets and
• 20:36
  to market economy. Latin America also transitioned
• 20:40
  at this time. So you had a huge numbers of
• 20:41
  people coming into the trading system.
• 20:44
  And of course, we also had the China VTR accession.
• 20:46
  Now, what we failed to do, when it's, you can say this with
• 20:48
  hindsight, and I was very involved in the transition, of
• 20:53
  course. Yeah.
• 20:53
  But I, I was involved in the in the transitions in these
• 20:56
  countries in the in the early 90s, both in Latin America and
• 20:59
  in the former Soviet Union. And what we failed to do, we
• 21:01
  assume that if you open up the border, the competition will
• 21:05
  automatically follow and economic democracy will follow
• 21:07
  that and political democracy will follow that.
• 21:10
  And of course, none of these things actually happened.
• 21:12
  And they partly didn't happen because particularly in in the
• 21:15
  case of China, we ignored the internal distortions.
• 21:19
  We sort of pretended they they weren't there, although we we
• 21:21
  pretended they would simply disappear once China was part of
• 21:25
  the sort of global trading community and this did not
• 21:28
  happen. We were supposed to embark on
• 21:31
  this kind of work after the Uruguay Round in 1997.
• 21:34
  I think people may remember the 1999 Seattle trade ministerial
• 21:39
  riots where there were crowds on the streets.
• 21:42
  But what was more damaging, I think, was a number of people in
• 21:45
  the rooms in these ministerial discussions who essentially said
• 21:50
  we don't really care about internal distortions.
• 21:53
  You know, the job of the trading system is to deal with tariffs
• 21:56
  and to deal with, you know, obvious border barriers.
• 21:59
  What we do inside our markets is sort of up to us, which is fine.
• 22:03
  You, you can, you can do that. But if you're doing something
• 22:06
  inside your market that damages your trading partners, you can
• 22:10
  expect your trading partners to take some sort of action.
• 22:14
  And it is lower motion. The third motion, yes action, is
• 22:18
  an equal opposite reaction. Right.
• 22:20
  And there was and there was a reaction and the failure to
• 22:22
  deal. So China steel case is a good
• 22:25
  example because in the case of China Steel, you had enormous
• 22:29
  barriers in the steel market in China.
• 22:32
  The essentially the government gave these companies, these
• 22:35
  state owned companies, Freeland free water free energy, free
• 22:38
  everything. Naturally there was an
• 22:39
  overproduction of seal. They had to sell it somewhere.
• 22:42
  So they sold it basically to the US consumer who tends to be the
• 22:45
  sort of buyer of last resort. And of course this meant that
• 22:48
  the competitive companies, the producers in the US, you know,
• 22:51
  places like Ohio and Pennsylvania and so on went out
• 22:54
  of business. What happens when that occurs?
• 22:57
  And this is what happened through the thousands and 2000
• 23:00
  and 10s is that you get this anger that builds up among
• 23:03
  people. You know, why is this happening?
• 23:04
  Why have I lost my job here? They don't say what I've just
• 23:08
  said. They don't say, well, this is
• 23:10
  because of a failure of the trading system to deal with
• 23:12
  distortions and therefore we need to deal with distortions
• 23:15
  better. I'm going to ask my government
• 23:17
  to deal with distortions better. They just say the whole thing is
• 23:20
  bad. I was promised all these things
• 23:22
  from the liberalised globalised trading system and I didn't get
• 23:25
  any of them. And I'd see Wall Street getting
• 23:28
  very, very. So I'm going to basically I'm
• 23:30
  going to put in place a candidate or a politician who
• 23:33
  will protect me from all of these things.
• 23:36
  And, you know, frankly, President Trump kind of rode the
• 23:40
  wave of this in 2016 and responded by saying he was going
• 23:43
  to protect people from this type of this type of insortion.
• 23:46
  Wasn't just in the US. You know, in the UK, Red Car,
• 23:49
  Paul Talbot, I mean, there were youth unemployment rates of 90%
• 23:52
  in some of these places, particular times when steel
• 23:55
  mills closed down. So it was, you know, widespread
• 23:59
  effect. And this is basically what's
• 24:01
  happening in the US, China relationship now is trying to
• 24:03
  work out these problems. We saw this also in textiles we
• 24:07
  see in lots of different companies.
• 24:09
  And what I think the administration, the US currently
• 24:12
  is engaged on with China and actually with other countries in
• 24:14
  the world is, you know, these things, these distortions, these
• 24:18
  regulatory barriers, these behind the border barriers
• 24:20
  actually have a huge effect on trade.
• 24:22
  And by the way, they have a huge effect on their own economy as
• 24:25
  well. So the China economy is not in
• 24:27
  good shape right now and in fact would be improved if they
• 24:31
  eliminated a lot of these barriers and distortion.
• 24:34
  So there's actually a sort of unity of interest between the
• 24:37
  exporter and the domestic consumer.
• 24:39
  They both want the same the same thing and the economy of the
• 24:43
  country that's doing the distorting would benefit if it
• 24:45
  lowered the distortion. But I mean this, this tells you
• 24:48
  a little bit about the, how powerful the forces are that
• 24:52
  oppose that kind of reform. Because if that is true and the
• 24:56
  country benefits and the trading partner benefits, you know,
• 24:58
  that's how wealth is created, then why why don't we do it?
• 25:02
  What, why is it so difficult to do?
• 25:04
  Well, it's so difficult to do because these powerful forces
• 25:07
  really oppose it. And they're very, very strong.
• 25:09
  And in addition to that, you've got some other issues with
• 25:12
  regard to China, with regard to sort of national security and
• 25:15
  all of these things as well. So it's a complicated
• 25:18
  relationship, but it's a relationship that sort of
• 25:20
  defines the global picture as well.
• 25:22
  So global. Landscape.
• 25:24
  Wow, I know that you are a very busy man.
• 25:27
  Of course, you know, you have this really crunch for time and
• 25:30
  of course we have just 4 minutes to save the life, right?
• 25:33
  4 minutes left, yes. Whenever I'm asked what's the
• 25:36
  cost of all these things, I always need two word answer.
• 25:39
  Automation and recession, right? It's interesting what's
• 25:42
  happening in the global landscape with the introduction
• 25:44
  of AI. We need to use it to leverage
• 25:47
  efficiency. But the powers that be, you
• 25:50
  know, just tortures are trying to resist it or it's like a
• 25:54
  tsunami. You know, it's it's going to
• 25:56
  come and watch, you know, the whole elementary.
• 25:59
  So the world really needs to give way and, you know, has to
• 26:02
  conform in order to ensure that global efficiency, You know,
• 26:07
  talking about competition. Pretty warm.
• 26:09
  We've actually worked, you know, across the globe with countries
• 26:11
  like Brazil to South Korea to Morocco, like helping them
• 26:15
  design through competitive regulatory frameworks.
• 26:19
  You know, I'm quite curious about, you know, what the
• 26:21
  patterns have been, the lessons that have stood out.
• 26:23
  And of course, you know, that's read these into your leadership.
• 26:26
  If you currently chaired the growth Commission and that's
• 26:29
  important economists that tackle slow growth in T7 countries.
• 26:33
  You know, what have been the borders ideas, you know,
• 26:36
  currently on the table for big banks And you know from a
• 26:39
  personal standpoint, what do you think is the most efficient
• 26:44
  solution to tackle these economic prices that we've seen
• 26:48
  at the global? Well, the interesting thing is
• 26:51
  when we developed our economic model that shows that the
• 26:54
  attempts to evaluate the cost of these distortions, we found
• 26:58
  something that was somewhat counterintuitive, which is that
• 27:01
  we break this into three sort of fundamental pillars.
• 27:04
  And how open is your trade regime?
• 27:06
  How competitive is your market? How well do you protect property
• 27:08
  rights? So within those 3 pillars, there
• 27:11
  are very direct and very robust correlations between in GDP per
• 27:15
  capita and positive movements in those in those pillars.
• 27:18
  But what we found is that an equivalent movement in or
• 27:21
  positive movement in each of those 3 pillars does not have
• 27:24
  the same GDP per capita effect. So in fact, they're quite big
• 27:28
  differences between them. So if I improve my trade
• 27:31
  environment by which is principally border, border
• 27:34
  barriers, I reduce border barriers by a certain
• 27:37
  percentage, I get a, a gain in GDP per capita.
• 27:41
  But if I had to apply that the same percentage to my regulatory
• 27:45
  system, my domestic regulatory system, I get a gain that's
• 27:49
  three or four times as great. And if I, if I apply that to my
• 27:52
  property rights protecting environment, I get a gain that's
• 27:54
  about twice as great. So this is counterintuitive.
• 27:57
  We tend to think that the main thing to do is to reduce the
• 28:00
  border barriers and then everything else is kind of a
• 28:02
  icing on the cake. Actually, what we're finding is
• 28:05
  that it's the other way around. What you need to do is improve
• 28:08
  your regulatory regime first, improve your domestic protection
• 28:11
  of investment property rights and that kind of thing first.
• 28:14
  Then you can open up your, your, your, your, your work on your
• 28:17
  border, border arrangements. And we kind of did this the
• 28:21
  other way route and we assumed you do the border stuff and
• 28:25
  everything else flows. Actually, we should have done
• 28:27
  all three things together and that's kind of the learning that
• 28:31
  we have. So in terms of what we recommend
• 28:33
  now, we go where the gain is the biggest pull, the pull the
• 28:36
  biggest lever first, which is regulatory reform.
• 28:39
  So that is the single biggest challenge that that the
• 28:43
  countries face. We've seen a massive increase
• 28:46
  in, particularly in in the developed world, actually more
• 28:49
  so than the developing world, but we've seen a massive
• 28:51
  increase in regulatory burden. And this isn't just about
• 28:54
  business. People tend to think of
• 28:55
  regulations or they think of business compliance costs.
• 28:58
  And so they sort of talk about deregulation or regulation.
• 29:01
  And that's not really the issue. The issue is does that
• 29:04
  particular regulatory rule benefit a powerful incumbent
• 29:08
  company to the detriment of new entrants or entrepreneurs?
• 29:12
  That's really the fundamental question you've got to ask.
• 29:14
  Does it affect the competitive landscape?
• 29:16
  And some of these, some of them don't have any effect at all.
• 29:19
  And that's all fine. But for those that do seems to
• 29:22
  be very, very careful about them.
• 29:24
  And they need to also look at their existing rule books and
• 29:27
  see, well, how much of this is really actually affecting market
• 29:31
  competition. It may not have been intended to
• 29:33
  do that, but it's having that effect.
• 29:35
  So we need to do something about it.
• 29:36
  It was an interesting study recently on the federal rule
• 29:39
  book in the US, which is, as you know, many thousands and
• 29:42
  thousands of pages, the about 30, 1 to 37% of market share
• 29:49
  improvements. In other words, companies
• 29:51
  getting more market power were due to federal regulation, not
• 29:55
  their own business acumen, not their efficiency, not their
• 29:58
  quality. But essentially what this is, is
• 30:01
  large companies protecting their market share through regulation,
• 30:04
  you know, was going to the government.
• 30:06
  Lobbying. To block their their their
• 30:09
  opponents. So this is the kind of thing
• 30:11
  that that you need to deal with and what we're seeing is there
• 30:13
  is an awful lot of this. It's a morass and it's very
• 30:16
  difficult to challenge because these, they tend to build on
• 30:18
  each other. It's like a, it's like a set of
• 30:20
  weeds in a golden. You know, it's not easy to weed
• 30:23
  the gold because you don't know you might accidentally pull up a
• 30:26
  flower, you know, while you're trying to weed the golden.
• 30:28
  So it's very difficult to deal with these kinds of issues, but
• 30:33
  they are they are the issues that give you the biggest gain
• 30:35
  by far of anything a government can do me to you.
• 30:39
  I am very, very grateful, you know, having you on the podcast
• 30:42
  today. I will not be able to take the
• 30:45
  quick pie around, but our life for you to leave us.
• 30:47
  We just want Nuggets, you know, let's us pie the next generation
• 30:52
  of leaders. Many of our listeners are
• 30:55
  entrepreneurs, young leaders, and even students.
• 30:58
  What's your advice for the next generation and what's one book
• 31:03
  that would advise everyone should need on economic
• 31:06
  prosperity? Well, I would be remiss if I
• 31:08
  didn't talk about my recent book on on trade and regulation and
• 31:13
  and and economics. Let's get the book.
• 31:15
  These so we're added to the description.
• 31:17
  Yes, absolutely so so I've written actually 4/4 books now
• 31:21
  on distortions. We need all four.
• 31:23
  We need all four of the. Description, but, but so I would
• 31:27
  recommend, you know, obviously I'd recommend my in books, but I
• 31:29
  mean, I think the what people need to to to to be clear about
• 31:33
  I think is this issue of voluntary exchange.
• 31:36
  And what I found is a lot of young people who are very
• 31:39
  opposed to capitalism. They're very anti capitalist, as
• 31:42
  it were. But when you drill down what
• 31:43
  they oppose, what they're really opposed to is cronyism.
• 31:46
  And of course that is entirely right to be opposed to that and
• 31:49
  that's exactly what what I would be opposed to as well.
• 31:54
  But I would, I mean, you talked to the beginning of the podcast
• 31:56
  about the great minds and you know, whether it's Aristotle
• 32:00
  writing on ethics or whether it's John Stuart Mill or Adam
• 32:04
  Smith, I mean, well, I'd always the advice I'd always give young
• 32:07
  people is always try to read and try to connect with you talked
• 32:11
  about it like a conversation and it is a conversation.
• 32:14
  Have a conversation with the masters.
• 32:16
  Have a conversation with the ancients who really knew what
• 32:18
  they were talking about. And don't, don't read what
• 32:21
  somebody else has said about Adam Smith or John Stuart Mill
• 32:24
  or John Locke. Read the original stuff that
• 32:27
  they wrote and read. And reread it because you get
• 32:29
  something out of it when you're 18 that you're entirely
• 32:32
  different to what you get out of it when you're 35 or 55.
• 32:34
  So I, I would say my strong advice is, you know, go back to
• 32:39
  those, those, those authors. There's a lot of wisdom, but
• 32:42
  that I would definitely recommend.
• 32:44
  I very, very much appreciate what you've just said.
• 32:47
  I remember that the very first book my father ever gifted me
• 32:51
  was Think and Grow Reach by Napoleon Hill.
• 32:54
  And I remember I read that as a teenager.
• 32:56
  But just yesterday or the day before, I listened to a blinkist
• 33:02
  on that book and he gave me a new perspective.
• 33:06
  And of course, I'm really grateful to you.
• 33:07
  Thank you very much. Love and respect to you.
• 33:10
  Before you leave, if you want to give a shout out to anyone, let
• 33:13
  us know. And to the audience, always go
• 33:17
  for something in your lives. Constantly strive to thrive and
• 33:21
  achieve. So over to you.
• 33:23
  For me it's goodbye. And of course, from Shankar
• 33:25
  Singham to the honours of you goodbye.
• 33:28
  And of course, a shout out to anybody who wants to appreciate.
• 33:32
  Well, thank you to you for hosting this and thank you to
• 33:35
  your audience for listening to it.
• 33:37
  I really enjoyed it and look forward to future, you know,
• 33:40
  interactions. Thank you very much.
• 33:41
  Questions. Goodbye from us.