Xavier Sala-i-Martin is a professor at Columbia University in New York and chief economic consultant for Davos. With the return of spring he is back at the UPF to talk to future Catalan economists about the development of countries. Before beginning the interview with VIA Empresa, he tells us that a lot of people recognise him because of his jackets, which like the economy are every colour imaginable.
He greets us in a room in Penguin Random House to talk about his latest book, La invasió dels robots i altres relats. Economia en colors 2 (Rosa dels Vents, 2018). After the report the other day, he insists he will have to innovate even more than he had thought when it comes to presenting the book on Tuesday in the Fuster library in Barcelona.
Preparing for an interview with Sala-i-Martin makes much and little sense at the same time. His thinking is so quick and he passionately but unsmilingly associates so many things that the only question you can be sure of asking is your first. We talk about as many different things as possible in 45 minutes. Innovation, religious fundamentalism, clones in China, the Davos meetings, the Catalan-Spanish relationship, the director’s box in the Bernabéu stadium, the orgasm of Belletti’s goal in Paris and the happiness money brings. We run out of time but those who want to hear more will no doubt find satisfaction in his new book.
Why Economics in Colors?
We were looking for a title for a prime time television programme that would explain the economy to everyday people. Economics in colours plays on my jackets and because the economy is often seen as a science that is grey, boring and not very transparent. One of the big problems in the world is that people do not know about the economy, and if they did perhaps there would not be so many crises. Whether you like it or not, whether you realise it or not, the economy is with us all day long. It is the science of choice, from when you get up until you go to bed: the first foot you put on the floor, how you take your coffee...
"Whether you like it or not, whether you realise it or not, the economy is with you all day long"
The economy is a clear example of the tyranny of experts.
The blame lies with us. I have tried to make a programme that other sciences like biology have been doing for a long time. Economics in Colors are 12 novels that begin with a story, continue with a type of mystery and finish with an explanation. It shows that economics can change your day-to-day life. When it comes to choosing a job, having children, buying a car, going into a supermarket and realising what is a con and what isn’t... Economists should be looking for ways to reach people.
You write: "One of the great enemies of innovation over the centuries has been religious fundamentalism.”
Throughout history fundamentalism has been Christian. It was to blame for 1,500 years of darkness and strangely it was Islamic culture that saved philosophy, medicine or Greek mathematics. These returned to Europe through Spain. Then Constantinople fell and the Muslims banned printing. Today, Islamic states destroy works of art and outlaw different ways of thinking. Innovation and scientific progress is also to question God, Allah, Muhammad, Jesus Christ, the Virgin Mary and the Holy Spirit. Without questioning everything that is accepted as true, there can be no progress.
Photograph by Àngel Bravo
And why do large companies decide to kill off innovation?
To protect their core business. Now there are smartphones, but Nokia’s core business used to be dumb phones. Two years before the first iPhone, Nokia sold 250 million units of the 1110. A brutal piece of business. But, then it sank. Why? Researchers have looked at their patent book and discovered that Nokia had all the technology it needed to make an iPhone but didn’t do so because it wanted to protect the dumb phone.
They betrayed innovation to protect themselves.
They were competing with a product that already worked. The other great example is Nespresso, which was invented in 1976 but banned within the company for 10 years. Nestlé lived from Nescafé and in 1986 set up another company to experiment with Nespresso. I have never liked Nescafé but a lot of people buy it and its sells in its millions. Innovation does not appear by magic; ideas have a cost, they evolve and have to be implemented. The first Nespresso shop was in Paris in 2001. It is clear proof that sometimes the enemy is among us. In the end, the idea is so good that Nescafé ends up developing and triumphs with Dolce Gusto.
"If artificial intelligence watches science fiction, it will end up taking over the world"
The head of Linkedin in Spain and Portugal, Sarah Harmon, told me that philosophy is a degree for the future. Do we control technology or does technology control us?
Humans control technology, but not how we use it. After the Titanic sinks, humans decide to develop sonar and they find a way to use it below the ice to see what is there. That saves thousands of human lives, but this technology is also used for pregnant women to find out the sex of their unborn baby. In China, with the one-child policy and most people preferring males, there were some 200 million abortions after 1976. The same technology can be used to save the Titanic or cause an abortion in China. It all depends on the humans using it.
As a good economist, you do not like to talk about the future... But faced with this invasion, will we end up living like in Isaac Asimov’s I, Robot?
If artificial intelligence were to watch science fiction films it would end up taking over the world. Machines today still do not how to distinguish between a Chihuahua and a muffin. Technology will evolve in an incredible way but today we still do not know how human beings make decisions. I have a two-year-old son, I have never shown him the definition of a dinosaur on Wikipedia but if you show him a picture of one he knows what it is straight away. Machines still do not know how to do this.
Photograph by Àngel Bravo
It’s a question of time.
We are in the prisoner’s dilemma. We know that smart military technology, the robocops or Terminators, will end up making things worse for humanity. The life expectancy of a human being on the battlefield will be nothing. Advanced western societies say they will go ahead with it but how will China react? By doing it too. We all know it is bad but we will all end up doing the prisoner’s dilemma. I am sure that China has already cloned human beings. How will we react? We are witnessing the last generations of homo sapiens.
Was this spoken about at Davos?
Yes. People have the wrong idea about Davos, that it is about a few rich men pulling the strings and talking about how to steal more money from the poor. But that is not the case, there are lots of debates on cancer, Mars, finance, poverty in Africa... With the main experts in the world. It is what Pasqual Maragall wanted to do with the Fòrum de les Cultures.
"We are witnessing the last generations of homo sapiens"
And Catalonia as well?
I see Catalonia from Mars. If a Martian landed and asked anyone from a western democratic country how Earthlings made decisions, we would tell them that in civilised countries we vote for our leaders, the rules of the game, how we spend our money, the laws... We vote, vote and vote. And if he were to ask us about the lines separating countries, we would tell him that it is the result of fighting. You take your independence through force and in two weeks you are in the UN and everyone accepts it.
Is it just a matter of force?
Slovenia is in the EU. Serbia is about to join, despite being in the Court of Human Rights for crimes against humanity. Now, you want to vote for a border and the president of the European Commission, [Jean Claude Juncker], this alcoholic from Luxembourg, laughs at you. It is crazy. How did the border between France and Germany or the 58th Parallel come about? With tanks. Through force. Why is Peru independent? Vargas Llosa says he wants no nationalism but he is not asking to be readmitted into Spain. Peru is independent thanks to fighting. As humans, we should be ashamed of ourselves, we, the United Nations, the EU... It is unacceptable but we accept it. If you say you want to vote, they try to ridicule you. They are the cosmopolitans, those who defend war and violence, while you are the primitive one for saying it has to come down to force. And if you don’t like it, more force.
The political establishment protecting its core business.
The Constitution of the United States said that only landowners could vote because they were scared of the poor voting to take their land. It was the same with women or blacks. It was absurd and we are seeing it again. Just because it is difficult to think how to go about voting does not justify force. As Sarrià cannot vote, we accept South Sudan because there are hundreds of thousands of deaths and we think that’s fantastic. Catalans should not be defending the right to decide in Catalonia but the right to decide of all peoples in the world.
"Between the wealthy Ibex companies, some live from the BOE in Madrid, from the director’s box in the Bernabeu and from public contracts"
According to economic theory, do Spain and Catalonia have inclusive or extractive institutions?
Extractive means they take money from others and inclusive suggests you make money through innovation. Spain is increasingly more inclusive. Those with access to large businesses have to be part of an elite made up of civil servants, Ibex business people, politicians... What Podemos used to call the Caste and that they are now part of. We are excluded from the famous business in the Bernabeu stadium. Among the wealthy Ibex companies, some live from the BOE [official government gazette] in Madrid, from the director’s box in the Bernabeu stadium and from public contracts. The rest, who do not live from the BOE, find themselves on the periphery: Catalonia, Galicia, Valencia.... Grífols, Inditex or Mercadona have an amazing capacity to innovate.
Political and economic power is centralised in the capital.
There are so many rich people in the United States because it has innovated. However, in South America, Carlos Slim is like Juan Villalonga. Aznar privatised Telefónica to give it to his friend and Carlos Salinas de Gortari did the same thing in Mexico. When you have a monopoly on something as necessary as telephones, you make a fortune. All of those Spanish systems, which includes South America, come from the Encomienda [labour system of the Spanish empire], which was an elegant way of saying slavery and that was passed down. To be rich you have to be friends with the boss. In Mexico, there is a constant battle to be part of the elite because it is the only way of making money and stealing from others. It is not a battle to innovate. In the United States, you have to innovate if you want to make money and it does not matter if you are friends with the president. Corruption is part of the system. All of these examples are part of the Daron Acemogly’s and James A. Robinson’s theories.
Photograph by Àngel Bravo
Does money make happiness and happiness make money?
We don’t really know what happiness is. Our bodies have evolved a system for reproducing ourselves and keeping ourselves alive through a carrot and stick mechanism. All feelings are associated with a neurotransmitter. It rewards food and sex and punishes fire, pain... But for this to work, the sensation of happiness has to be temporary. Money is a way of buying dopamine and it allows us to do things that bring us pleasure. In one sense, GDP is a way of buying drugs. All that about finding happiness seems absurd to me. In the happy world of Aldous Huxley all they do is eat Soma. From the biological point of view, if all we do is work and produce GDP because that allows us to buy neurotransmitters that bring us happiness, let’s skip the GDP and buy the drugs directly. Studies show that rich people are happier because they can buy more shots of dopamine and they do not have the anxiety of losing their job, their house... Euphoria is also a large part of happiness but it has to be temporary. One of the biggest orgasms I have ever had was Belletti’s goal in Paris. Now it is a distant memory, the victories of the past no longer count and we have to win again every year.
"GDP is a way of buying drugs"
It is difficult to understand happiness if we do not also understand sadness...
It is chemical. Your head does not know whether Barça has just scored, whether you have just had great sex or you have taken a pill... All it knows is that dopamine arrives and produces a sensation of euphoria. I do not know if you need a moment of sadness to be able to feel euphoric again. However, the chemical thing is dangerous because it takes us to a world of dictators who could give out pills so that people are happy. It is possible that the kids in Google end up ruling the world just by making us feel happy.
As Àlex Sicart says, perhaps "in the future you will not support right or left but rather Google, Apple or Amazon."
If they give you more dopamine...