Robert Shiller of Yale University talks to Romesh Vaitilingam about his book, Finance and the Good Society, in which he argues that even after the crisis, rather than condemning finance, we need to reclaim it for the common good. Robert Shiller is Arthur M. Okun Professor of Economics, Department of Economics and Cowles Foundation for Research in Economics, Yale University, and Professor of Finance and Fellow at the International Center for Finance, Yale School of Management. Romesh Vaitilingam is a writer and media consultant, and a member of the editorial board of Vox. Originally published at VoxEU.
Lambert here. I note that Shiller gives the following examples of “great advances in the technology of finance that have helped society to develop”: CDOs, Obama’s JOBS Act, the “benefit corporation,” and the “social impact bond.” The last three are all only a couple of years old, so, “jam tomorrow.” Other than that, all I can say is… More cowbell!
* * * Transcript
Romesh Vaitilingam: Welcome to Vox Talks, a series of audio interviews with leading economists from around the world. My name is Romesh Vaitilingam and today’s interview is with Professor Robert Shiller from Yale University. He and I met in the city of Bristol in the UK in May 2012 where we spoke about his book Finance and the Good Society. The basic theme of the book is the need to democratise finance by making the financial markets work better for everybody.
I began by asking Bob to explain exactly what he means by that.
Robert Shiller: Well, the Occupy Wall Street and Occupy London people say “We are the 99%”. There’s an increasing concern with unequal distribution of wealth, and finance is perceived as the villain in all of this. But I’m thinking it can’t be the villain; finance is a technology that can, if it’s properly applied, help reduce inequality if it’s applied to everyone. So I think that people who are in finance today have a moral obligation to help advance the trend toward democratisation of finance. That means using the principles to really help people.