Stian Westlake on the intangible economy, recession, stagnation, inequality, BS jobs and new institutions

Ben Yeoh Chats

Stian Westlake is the chief exec at the Royal Statistical Society, and before that he was a policy advisor to government and the executive director at Nesta. He is the co-author with Jonathan Haskel of Capitalism without Capital, and they have a new book out, Restarting the Future (22 March 2022).

Stian discusses how recessions might be different under an intangible economy. I ask him (H/T Tyler Cowen) how national security concerns might be different in a very intangible world. Part of his answer:

...if you are an interconnected, relatively open economy, and Russia was always the most relatively interconnected of the BRIC [Brazil, Russia, India, China] countries, the intangible economy kind of makes it easier to turn off those taps in a way…. how dependent some of these kinds of more security based, more military based factors have been on intangible assets. We've probably all seen the stories of the dependence of the Russian air force on US GPS devices, which has led to them being more observable and perhaps has played a role in the fact that they have not been as present in the conflict as people thought they would be. I think that kind of interconnectivity is like many things in the intangible economy. It's great for winners, it's great if you're the US or if you're a US ally and it's probably not so great for the losers. …

We chat about these observations:

• Stagnation
• Inequality
• Dysfunctional Competition
• Fragility
• Inauthenticity

And Stian offers an intangible lens to explain the observations.

We discuss: BS jobs and whether culture and trust might be upstream of this.

Why we need new institutions to tackle intangible challenges, whether this would be more technocractic and if there is a political economy challenge on this.

The importance of where the intangible meets the tangible, for instance, we have heat pump technology but not the intangible systems and ideas to install them. Sanitation is “hardware” but building and co-ordinating all this is an intangible and institutional challenge more than a hardware challege.

What the trade-off is between losing red tape and increasing the risk of corruption.

Stian argues for why the tax treatment of debt and equity would be a good idea (while acknowledging this would be politically hard).

We play over/under rated on:

Innovation Prizes, Blogging, Sugar tax, Carbon tax, Plastic Bag Tax, Innovation agencies, GDP and UBI, universal basic income.

Stian ends with some life and career advice.

Video and transcript are available here, with further links.