Well Said Podcast | June 23

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Heather Reisman:
Hi, I’m Heather Reisman, and this is Well Said, a podcast on the art and science of living well. This podcast is brought to you by Indigo.

The events of the last 15 months have led many of us to ask the question: what do we really value? Or more specifically: is the way in which we’re living, and is the society we’re building, really aligned with the things we think we value?

Our guest today argues that in fact they are not aligned; but that this is the perfect moment to reassess and course correct. In fact, he says crises have historically given rise to some of our most important societal advances. And certainly COVID qualifies as a crisis, with a capital “C.”

Mark Carney, a.k.a. Canada’s superstar economist-banker, is well-positioned to explore this vitally important subject. He was the governor of the Bank of Canada from 2008 to 2013, and was governor of the Bank of England from 2013 to 2020. He is now the UN special envoy on climate action and finance, and vice chair and head of impact investing for Brookfield Management.

Mark’s new book, Values, is a sweeping look at the relationship between what we create, buy, and invest in and our long-term well-being.

Mark, welcome to Well Said. We are thrilled to have you here today.

Mark Carney:
Heather, thank you so much for having me. It’s a great honour, and a pleasure.

Heather Reisman:
Oh, great. By the way, I recall that the last time I had the fun of talking with you about lofty issues, it was rather late; we were in a bar. I hasten to add it was all way aboveboard and proper. But only to say that I’m so looking forward to this conversation.

Mark Carney:
Me too. And, ohh, to imagine that: in a bar. Imagine that. In another world.

Heather Reisman:
Exactly. Very much pre-COVID.

OK. Let’s start with the title of the book: Values. That is V-A-L-U-E-open bracket-S-closed brackets. So you make the distinction between “value” and “values” right in the title. You are setting us up to talk about the relationship between how markets interact with, and have in fact ended up influencing, our values as a society. Unpack this idea for someone who has never even taken a class in economics.

Mark Carney:
Excellent. Well, again thank you for having me. You know, I think the first thing to recognize—we sometimes think of markets as these structures that are off over there, that they exist unto themselves. The market has decided this happened today. This company has this value. The market went up; the market went down. Etc. But of course the market in the end is us. We create the market. The market is part of our society. And the market has values, itself. It influences our values; and our values influence it. And what’s out of balance? Are the values of the market—did they swing too far, did they start to influence our values in society? And how can we re-establish a balance between the two, so that the market is ultimately serving society? That’s what it’s there for. And how can it improve our well-being?

Heather Reisman:
You’re talking about the market as a place where something—a good or a service—has a financial value ascribed to it. It can be bought, sold, traded. It can go up in value, down in value, relative to what someone will pay for it. Would that be a fair way for us to understand it?

Mark Carney:
That’s a perfect way, perfect description of it. And if I can say something else—just from context—which is what economists are taught is that value equals price. Value equals price in a market. And that mindset has seeped into the way we conduct our affairs. The way society is organized more and more, if something doesn’t have a price does it have a value? And that wasn’t always the case. We used to think—up until Adam Smith, up until the end of the 19th century, including Adam Smith, we used to think that there was an intrinsic value to a good or an activity, maybe determined by how much work we had to put in to create the meal that we served somebody, or the service we give, or the object that we create. But that shifted. And it has become the price, and only the price. And that’s a dangerous assumption. And we’ve lost our way, to some extent, because of that.

Heather Reisman:
Isn’t that so much a part of the central thesis that you say we moved from being a market economy to a market society, where this notion pervading everything is: if I can’t reduce the value of this to dollars and cents it is of no value? So let’s get underneath this. Just give us a quick definition of a market economy versus a market society.

Mark Carney:
So, a market economy, the market is organized around a series of private transactions. I decide what goods I want to buy from Indigo—you know, from computers through to books. You decide what to provide. It’s a series of transactions, a series of commercial exchanges. OK? And I’m going to leave that word “exchange” there for a minute, and I’ll come back to it.

A market society is one in which more and more of human interactions—the way we deal with each other—has a price. So we put a price on charity. We pay people to volunteer. We put a price on child-rearing. We bring, for example, the raising of children into the market. It becomes an issue—I’m not judging this, but it becomes an issue of daycare, it becomes something that’s paid. And a value is ascribed to it. And implicitly, what that does is more and more of what is outside of the market is no longer judged to have value.

Heather Reisman:
You give an example—it’s well into the book but I think it’s just such a brilliant example—that the Amazon, the real Amazon, the Amazon with all of its environmental potential, the lungs of the Earth, when it just exists we don’t think about it. In fact, we don’t ascribe any value to it. But when people decide they’re going clear-cut some of that Amazon, in order to raise cattle, suddenly it has value because you can ascribe value to the cattle.

Mark Carney:
That is a great example. I’m glad you point to it. And if I bring it to this issue of climate change, for a moment, which is—so we don’t value the Amazon as it is. Or we don’t value it enough in order to prevent the cutting down of the trees, the stripping of the land, and the raising of cattle. And yet we pay a tremendous price on climate change. And part of the debate, or the discussions, for all of these international efforts on climate change is, “Well, should we pay Brazil to keep the Amazon?” And so again it’s a conversation that’s conducted entirely in terms of money and price, as opposed to the value for future generations, our responsibility as, you know, custodians of the Earth, and can we value something without a dollar figure on it.

Heather Reisman:
How did we get to where we are? I mean, specifically, we have this massive divide between the haves and the have-nots. We’re burning up the planet while merrily sipping our cappuccinos. And as long as stock markets rise, we don’t seem to care. Those with power—so our governments, our institutional leaders, our investors of pension money, and I would even say some of the major leaders of business—behave as if all is quite well with the world, frankly. So how did we get to this place where we are this market society, where the only thing we seem to care about is: what is this worth in dollars and cents, and can I make it worth more tomorrow, and can I make it worth more faster than anybody else?

Mark Carney:
Yes. It’s been a long process. And I’ve pinpointed the start of it in the 19th century, builds over the 20th century, but really accelerates from the late 1960s, early ’70s with the rise of Milton Friedman’s idea that effectively the purpose of business is to make as much money as possible for the shareholders. And the pendulum swings towards shareholder value, sharehold maximization, I think, in the fullness of time, erroneously wrongly, at the expense of employees, of suppliers, of communities. But that’s the first big development.

The second, alongside that huge shift towards open markets and globalization that comes with it, which reinforces these trends, tremendous benefits come alongside—lifting a billion people out of poverty, raising life-expectancy—but also pushing up these inequalities. And those inequalities, as you know, turbocharged by technology.

Heather Reisman:
Right.

Mark Carney:
Those who have, those who are educated, those who were born in the right place are going to absolutely exploit their benefits and on a global scale. And we get the big increases.

Now, one of the consequences of that—of those developments is they begin to undercut the values that, paradoxically, support the market. Values of fairness, responsibility, a sense of responsibility for the system for your community. And it starts to undercut some of the values that the market needs to function effectively.

Heather Reisman:
You talk in the book about three major crises of the 21st century: the credit crisis of 2007/2008 that rocked financial systems and financially devastated so many people; this current COVID crisis; and the one I think many would argue is the most significant, truly existential crisis, which is the climate crisis. So let’s talk about COVID first, then we’re going to talk about climate.

You write in the book that there was plenty of warning that this could happen. Right? That government after government chose to deliberately ignore the science and the experts. So why? Why is there this costly dissonance? What blinds or stops those in positions of power from taking action that is clearly in the interests of the societies they serve?

Mark Carney:
That is the question. And that’s the question we should hold our leader to. Because what’s the first responsibility of government? It’s to protect its citizens—and originally protect from foreign wars, but it’s protection from plagues, pandemics, it’s protection from financial crises coming over our borders and hitting us with recessions and unemployed. That’s a core responsibility of government, is protection. And the challenge with protection is that the efforts to build resilience if you do protect your society—if you make your banks strong, if you invest heavily in pandemic preparedness—it’s not necessarily obvious what you’ve saved your people from. The bad thing doesn’t happen; you could say, “We could have been a lot worse.” And so, there’s a phrase in the book, I say, in terms of protection—or resilience is the way I termed it, building up resilience in society—“success is an orphan.” Normally failure is an orphan; normally, no one wants to have anything to do with failure. But here it is if you succeed, people can always point to, “Well, you put too much money into pandemic preparedness.” You know, “What’s all this PPE doing in a warehouse somewhere?” Or, “Why do we have extra vaccination?” Nobody asks these questions now, I can assure you, obviously.

Heather Reisman:
Right, right.

Mark Carney:
So there is that, but there’s also, Heather, as you know—and I’m as guilty of it as the next person—it’s human nature, we just don’t value the future as much as we should. We have these series of tragedies on the horizon. And so one of the things the book goes through is to say, well, how do we get around that, as a society?

Heather Reisman:
Those two ideas, that you get no value for avoiding crisis and this idea of yours, which I love—I just love the turn of phrase “the tragedy on the horizon.” It’s human nature to deal with what’s in front of us.

So, let’s move to climate. Once again we have scientists making powerfully clear that we are truly literally playing with fire, and that in fact the Sixth Extinction has already started. And the only question is: do we have the will and the ingenuity to blunt the impact of the current damage and begin a new kind of harmonious relationship with our planet? So how optimistic are you, right now, that we have reached the point of being ready to really put our shoulder to this?

Mark Carney:
I am more optimistic than I’ve ever been. So it’s important to have some optimism and some positivity. And let me, if I may, bring it back to the framework in the book. So if you’re an economist, everything is a trade-off. You’re trading off the future for the present. You’re trading off the planet for a profit. You’re trading off health for the economy. And in order to do those trade-offs right, you try to get a price, and then you wait until the prices equalize. But we can’t do that with climate, because so much of it is not priced—back to our Brazilian conversation a few minutes ago. And by the time we realize the consequences, it’s too late to deal with the problem. That’s the tragedy on the horizon.

Now. The only way out of that is for society, for people to say, “No. We want this issue dealt with. We want to address climate change. So we want to get to net-zero emissions.” And, you know, our children go out and protest on a Friday. There’s lifestyle changes … in that direction. So, they’ve all of a sudden said—to go back to the theme of the book—they’ve said, “Look. We value sustainability. We value sustainability more. And we value sorting this out for the longer-term for the next generation more than we value the present.” OK.

Now here’s why I’m optimistic is, once you do that then you can organize the market—or the market, in fact, in many respects organizes itself to say, “Well, wait a minute. If you value that, we’ll give you that. We will invest in the car company that has zero emissions. We will support new solar generation. We will come up with new ways of eating meat that is vegetarian.” And on and on and on. And that’s what’s—my optimism comes because that, both elements of that dynamic, people saying, “enough, let’s sort out climate change,” and expressing that through what they buy, who they vote for, etc., that’s happening, and the market is getting itself in place.

Now, there’s lots of work to be done. And government has to play a role alongside to reinforce. And we’ve left it quite late—as your … question reinforced—but it’s possible now, because the equation between values—what Canadians care about—and value has now changed.

Heather Reisman:
Right. And so it brings back to the very essence of the book. If we’re deliberate and conscious of our values, and we behave in concert with those values—enough of us—we can move the market, as opposed to having the market move us.

Mark Carney:
That’s exactly right. And that critical mass of people, just to be clear, needs to keep pushing on climate in order for that work to be done, but it’s now within the realm of possibility. Which is a huge shift. These tipping points, these social movements—when a lot of people basically think the same thing but there’s no focal point for it, and all of a sudden there is. You think about attitudes towards same-sex marriage, which changed, I mean, far too long but changed virtually overnight. And on climate we’ve had that shift, I think.

Heather Reisman:
You’re encouraging us to be deliberate about how we see the future, so that we can build a future that is consistent with our values. When you think about Canadian values and the ones that you feel are central to us and that can animate us moving forward, what do you think about as those values? The values you would say we would want to embed in the way we shape the market, moving forward.

Mark Carney:
Yes. I think—and we’ve touched on this a couple of times—I do think solidarity is one of our core values. We do feel that it’s absolutely right that we have equal health care, that we have equal education. We have had lower increases in inequality than most other countries during this period of change—of technology and globalization—because of what we’re willing to do to support each other. So that sense of solidarity is there. We are really going to need it through this period of change.

I’ll say another Canadian value which is helpful, which is humility. Now, but it’s got to be the right type of humility. To me, humility is a couple of things. One is knowing that you don’t know what the future is necessarily going to be, so you plan for failure—what we were talking about earlier … say, “Well, what if a pandemic does happen?” Forget about telling me all the reasons why it won’t. “What would I want to have done for a pandemic?” But also humility that recognizes that we want to marry humility with ambition. So we want to say where we want to go, what kind of society we want to create, you know, more sustainable, more equal, but also dynamic, prosperous, growing. And then work together to get there; don’t try to have it all laid out.

[music]

Heather Reisman:
I have three fun questions to ask you. Any book you read that you would say, “Wow, this book, it really had a fundamental impact on me”?

Mark Carney:
I’m going to give you an odd answer to that. It’s actually a play: Arcadia, by Tom Stoppard.

Heather Reisman:
Mmm!

Mark Carney:
I just found it monumental. It was very—it’s very thin, for those who would like to read it. He manages to combine chaos theory—you know, the mathematical chaos theory—English landscape gardening, Byron, a love story, comedy all in two acts that are interwoven with, you know. And there is, I think, not a word out of place. You know, the precision of the dialogue and the brilliance of the dialogue. And it’s both very funny and very, very powerful. And he has one of the great metaphors, where Thomasina—who is the young character, the young brilliant girl, budding mathematician—and she sets herself to solve Fermat’s Last Theorem. One of her observations, though, about life is, it’s like jam—when you stir jam into the pudding, into the rice pudding, it cannot be unstirred again. And so to this sense of things interwoven and in unidirectional aspect, which is just brilliant. And it’s absolutely full of that in … 120 pages. So the reason it had an impact, I just enjoyed it tremendously. And I love things which show connections across different disciplines in an unexpected way.

Heather Reisman:
And don’t we need that: the systemic nature of things? Don’t we need that? I mean, the environment itself is so systemic. What are you reading now?

Mark Carney:
I’m reading [about the] fourth industrial revolution. I’m reading Klara and The Sun.

Heather Reisman:
Oh, I love that book so much! It’s a Heather’s Pick this month.

Mark Carney:
Oh, it’s great.

Heather Reisman:
Oh my gosh. Oh my gosh.

Mark Carney:
… I tell you, that is—what I like, but I’m not quite there at the end, but it’s…. And obviously, I can’t give away the end because I haven’t got to the end. But you see how machine learning and artificial intelligence work in the main character. And as she learns, the society is revealed in these aspects of this … I’m really impressed with it.

Heather Reisman:
I’m so happy to hear you say that. For everyone listening, it’s Ishiguro’s Klara and the Sun. And it is just … I mean, when I—when tears were coming out of my eyes, because I felt bad that Klara was left in the store window, and I had to say to myself, “Heather, you are now crying about a robot” (laughing).

Mark Carney:
A fictional robot.

Heather Reisman:
A fictional robot, right. OK. Last, last question. What does intentional living mean for you?

Mark Carney:
The first thing that comes to mind with that is purpose, and in grounding, grounding in family and in community. I think purpose is grounded in that. And all—by saying, though, that second element. It is seeing the whole. Seeing the whole.

Heather Reisman:
Seeing the whole.

Mark Carney:
Just a window into the whole. Yes.

Heather Reisman:
It’s a gift, Mark. The book is a gift. And I’m grateful. I’m grateful you took the time. And I just loved every minute.

Mark Carney:
Heather, a great pleasure. Heather, thank you for having me.

Heather Reisman:
OK. Wonderful.

Mark Carney:
I look forward to continuing the conversation.

[music]

Heather Reisman:
Thank you for tuning in to our conversation with Mark Carney. For more ideas to help you live well, including the book featured in this episode, Values, visit indigo.ca/podcast. If you enjoyed this episode, please leave us a rating on Apple Podcasts. You can follow us wherever you listen to your podcasts.

Well Said was produced for Indigo Inc. by Vocal Fry Studios and is hosted by me, Heather Reisman.

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