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George Soros on remaking economics

Friday, September 17, 2010 - 09:31

Sept 15 - In an exclusive with Reuters' Chrystia Freeland, George Soros and Rob Johnson of the Institute for New Economic Thinking discuss the need for a new field of economics that addresses the real world.

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you for -- with writers and I'm here with Jorge Flores and Rob Johnson of the new economic thinking known as fine. Mr. threats in the conversation that we just had. You mentioned -- as he on -- so. By -- doing very well under the direction of Rob Johnson . are topical and when -- meetings the next one will be at Bretton Woods New Hampshire in April 2011. In the in the grip make the process that we're also. So hold on satisfied with the I'm thank you for -- with writers and I'm here with Jorge Flores and Rob Johnson of the new economic thinking known as fine. Mr. threats in the conversation that we just had. You mentioned -- as he Philanthropic project in the past year because you're the most proud of when -- It is it it's. And have them too including cottage. Economies. Do anything to very. Foundations. Of economics. Because it turns out that. And macroeconomic. Theory. Has broken down. The financial crisis. Has shown that. Is. Quite inadequate to making any kind of predictions. About their future. And it has to be -- thought from meets. Fundamentals. Because. Economics. Has time to be on science. Like. I. Physics. And the problem that can cause problems is a different one because. It's. To let these abuses. Is society. Human beings. And just thinking of human beings comes in to the into the course of events and therefore. The events in human participants. This is simply cannot be predicted. All this -- the -- is. And the uncertainty. Involved. That economics has. You know. So rethinking economics from scratch is pretty radical projects. -- have academic economists responded to this idea. is it. Widespread. Recognition that something is wrong. Exactly what it is and how fundamentally you have to be. Is very much commander of the debate. I have my own views each. As I expressed them. But that's not necessarily anti designed to push your ideas no indeed the I mean a very strange position of the -- if financials bombs and that the same time to put thank goodness of but because a point of view. And don't greater conflict. The days of conflict that we Jeff fully recognize. And keep out of the running of the institute. Provide financial support but then these -- on -- so. By -- doing very well under the direction of Rob Johnson . So rob is huge project. In practical terms what he's actually doing. -- number of things first of all raising money. Because there's a broad base of support worldwide enthusiasm George told about was not just emanate from George would not relevant reference check. Bob I would I say it's certainly could be in the off. Financially but I think the institution is strengthened by having a broader base of support. I'm very very fiercely focused on garnering that others -- Secondly we're in the process of grant making right now. We received or 540 applications progress we've narrowed it down with a semi finals which is roughly 67 candidates. And the governing board will be so 128 and in early October when notes the winners of the first world several million dollars of grants. Which address questions like equity in -- financial instability. The rule of the state to local political column. Advocating economic history reinvigorating awareness history of economic thought that deal -- things. And and the main job I think it'd be to keep grant scholars. I think -- number of things there's a curriculum committee that's no longer way of looking at economic reforms wolf you're abroad. I believe -- will be institutes. In various countries around the world and embedded with an academic institutions that created a source of strength. We will have convenience. Small meetings which are topical and when -- meetings the next one will be at Bretton Woods New Hampshire in April 2011. In the in the grip make the process that we're also. So hold on satisfied with the state of economics does review by the crisis so we will have task force. Groups of scholars that emanate from either with cinematic direction from -- board. How do you determine if that. I had met a secret. I would say if we start to see the mapping. Between what is understudy. In economics. And war -- important problems. Of the day converge. We had a period during rough economic is not currently focused on the right problem. I think they have been it says Paul Samuelson said economists no longer or talking to the world of -- talking to -- They've retreated to a monastery -- fascinated with the technical details of mathematics and statistics. Rather -- addressing support -- I already -- me -- font from in the academy from you know it really did that it. The groups that really have a vested interest in the status quo. What has the response team from your perspective. I would say there two poles won this enthusiasm. A sense of liberation. It's someone who's who committed support and fund new directions trying to change the full quote. The other side that would say is hardened in its opposition but they actually think they embody change. And so they said what what he does there for you were already on the track. But from my guys they're not being far enough for us. Aren't practical consequences mean practical benefit. The hope it's workable green and we had. Hundreds of people listening to -- acting investing question but he certainly did pretty weak. Portrait of where the world economy is that are are you gonna are you. Hoping. To -- thinking which is actionable which changed the world yes we'll -- start with mr. soles talked about when they actually stability. Parent if you believe in the models would have been. Promoted by academia. It implies what Roman Friedman calls -- emotional stability the regulatory regime the wolves from. Is predicated on false promises it's predicated on models that don't describe all the world actually behaves. So we go back to the first principles and arrive -- structures models perceptions. Of the financial markets that do would address the boom bust of -- and those Charles Cooper Paul maybe Hispanics and pressures. And perhaps a regulatory review can be designed. We are -- society is safer or less. Bandied about on the violence but sometimes it was. And to serve in conclusion what's your answer that question how how how will you. Determine whether or not finance it that. I think did he -- indeed. Yes by existing -- success because it it is established. And recognized. Dead and that. That peasant the current paradigm. Has failed. Knows you have to evolve a new way of looking at that well known problems that's that's going to be a much longer. Process. And I UConn they expect. Really. You body. All of thinking to emerge. In less than a decade. It's not so much of your philanthropy has been. Very practical. And hearing much about having a very practical immediate impact on people's lives you know. From scholarship program to direct aided times of crisis. What's. Practical impact will this program count on people like. And these you have tremendous impact because. The economy is a foundation. Of existence of speed and how it is around. Whether you have that. Be overly economy or. These breaks down into. National -- needs. Red it is. Prosperous over by the financial crisis. It determines people's lives. --

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George Soros on remaking economics

Friday, September 17, 2010 - 09:31