Tomáš Sedláček Interview: Part 1 - Ask a Fish 'What is Water?'
Economics and the Good, the Evil, and the Transformation
In this two-part series, the Prague Daily Monitor and Prague Connect present an insightful interview with "economics superstar" Tomáš Sedláček. Named one of the "five hot minds in economics" by the Yale Economic Review, Mr. Sedláček is the chief macro-economic strategist for the ČSOB bank and a member of the Czech National Economic Council. He also spoke at the recent World Economic Forum in Davos, Switzerland.
Mr. Sedláček will be the guest speaker March 21 in Prague at the Prague Business Leaders Networking 2012 event, sponsored by The Prague Daily Monitor and Prague Connect (see details below).
|Who is Tomáš Sedláček?|
Tomáš Sedláček (1977) is a Chief Macro-economic Strategist at ČSOB. He served as a non-political expert advisor to the First Deputy Prime Minister and Minister of Finance of the Czech Republic, with special responsibility over fiscal consolidation and the reform of the tax, pension, and healthcare systems. He also served as an economic advisor then-president of the Czech Republic, Václav Havel.
Asking a fish what water is
When Tomáš Sedláček enters a room, he brings good energy with him.
And he's hard to miss.
Tall, with a healthy crop of red-orange-yellow curls sprouting from his head, he has a ready smile and likes to laugh. That's a good thing, because Tomáš Sedláček also loves to debate a weighty topic -- economics and its deep link to ethics and philosophy.
Hold on a minute, economics and what? Ethics? And philosophy?
Absolutely. Because to Tomáš Sedláček, the three are inextricably inter-related. And, he adds, so are economics and art, sociology, politics, law, and psychology.
It's not exactly a traditional view of economics, especially for a Charles University lecturer with an economics PhD (with honors). He holds the unorthodox view that the old, standard operating procedures – thinking of economics as a rational science, as “mathematics” -- have led directly to the current world economic crisis.
To help explain how "everything" is connected with economics "yet difficult [for us] to join together," Mr. Sedláček wrote a book about it, with the provocative title Economics of Good and Evil. It was an immediate best-seller in the Czech Republic (see box), and has recently been translated into English. It has collected a raft of rave reviews from everyone from Quincy Jones (yes, that Quincy Jones, the music producer), to Mark Allen, IMF Senior Resident Representative for Central and Eastern Europe.
The book's thesis is that, although economics is categorized as a mathematical inquiry, and an empirical science free from values, it's actually a cultural product -- a story or a parable, a way to help us in the effort to understand the world around us. So he examines how ancient myths, the Bible, pre-20th-century economists and thinkers, and even current films like Fight Club regard interest rates, money, or profit, and have gotten us where we are today.
The young, bearded iconoclast sits down with us to explain his ideas a bit more. He fires off the vital questions that contemporary world economies, in their rush to just make more and more, faster and faster, have forgotten to answer.
"Can we know the future? What's the difference between 'price' and 'value'? What is money?" he asks. "If you ask an economist, you will not," he emphasizes, "get an answer. These questions are like asking a fish 'What is water?' A fish is so surrounded by it that it doesn't even realize what water is."
In his typically irreverent but amusing language, he terms ours the Society of Expert Idiots. "Everyone knows a lot about a little bit, but nobody sees the broad picture. We've lost sight of the forest," he claims.
"Is economics really the 'queen of social sciences,' as we were taught in economics school?" he asks. "Well, a hundred years ago, sociology was 'the Queen;' before that, it was psychology."
He pauses to run a cigarette across his tongue, closes his fist around it, and forgets to smoke it, warming up instead to his thesis: "Actually, I'm grateful to the crisis. It disturbs us from our quiet. It forces us to find some non-standard answers."
He has been known to compare the crisis to a hangover: Financially speaking, we spent our whole paycheck on an economic bender Saturday night.
Welcome to Sunday morning.
Fortunately, the economics doctor is here to suggest some treatments.
So, who has the magic bullet that can cure our economic ills? At the World Economic Forum at Davos did he find some magical cure among the experts when he presented his ideas as part of a panel on "Economics for the 21st Century" on January 26?
He laughs, the grin spreading across his ruddy cheeks. "It was interesting to see this high number of people so helpless," he chuckles. "It was an amazing array of limited creativity. But everyone agrees that this is unsustainable." He acknowledges that although "Davos is the Mecca of the capitalist parade, everyone has been humbled."
He pauses to light his cigarette and answer a call on his mobile. Then he shares a surprising discovery he made at the Forum: "the Occupy Wall Street movement's message outside the gates has really penetrated to the top," he says, nodding to affirm it. "We need new models now ... and the Occupy movement has had great confirmation, an admittance that we need a transformation, and the message must be great" if its aims are to ultimately be successful.
"Ten years ago if [I] said the green topic would be mainstream now, you would be laughing at me. Ten years ago, 20 years ago it was a hippie topic. But the green is now in the mainstream of thought." Indeed, look at the titles of some of the forum's conference reports: "Financing Green Growth in a Resource-Constrained World" and "Well-Being and Global Success" (which actually mentions happiness and family relationships as benchmarks).
"That's a significant new beginning," he says, but cautions, "We can't quite find [the way] yet; we're restructuring the whole model, and that takes time. We're re-thinking capitalism because we need something more." Indeed, the title of this year's forum was The Great Transformation: Shaping New Models.
"We don't need [just] a partial upgrade," he continues. "It's like you're driving a car -- you know -- we're asking the questions: Are we there yet? The car has driven us there but what if we need to climb a mountain and can't use a car? Should we change the vehicle? Do we need a different religion? Should capitalism become a religion?"
"Oh, yes," he nods, "it could be a religion. To a degree, we're having a crisis of faith" and, after all, he explains, "credit and faith in Latin mean the same thing. The credit crunch has become a belief crunch. We're not making technical mistakes, we're making philosophical mistakes.
"You can't take a bite out of just one part like it's a bar of chocolate," he says. "If you looked at the economy only, it would collapse in a matter of months."
To get serious about a Great Transformation, he believes, "Economics, art, everything, has to be connected, all around."
Look out for part two of our exclusive interview next week: Transparently Untransparent: Tomáš Sedláček on Corruption in the Czech Republic
Video on YouTube
Exchange places may face new regulations by Raymond Johnston - Prague.TV (Foto: fotolia)
The Finance Ministry is currently handling a proposal for better oversight
Employment sets new records by Raymond Johnston - Prague.TV (Foto: fotolia)
Women reach highest share of workforce, and employment hits a new high
Daimler may build Czech warehouse by Raymond Johnston - Prague.TV
The carmaker is looking for a site for part for the CEE region
US Ambassador Schapiro ends his term by Raymond Johnston - Prague.TV (Foto: Anglo American University Prague)
Incoming president Trump has asked all political appointees to step down on inauguration day
Filing US Taxes Abroad by Emily Prucha - Prague.TV (Foto: fotolia)
Expat taxes for Americans living & working in the Czech Republic
Exchange of Kč 50 notes ends soon by Raymond Johnston - Prague.TV
More than 11 million of the invalid banknotes are still out there
Congress Center Prague to get overhaul by Raymond Johnston - Prague.TV (Foto: Congress Center Prague FB)
The unpopular communist-era building will be revamped but not destroyed
Prague's economy growing again by Raymond Johnston - Prague.TV
Statistics show the entire country has improved
Did you join the CDK Global Bored? Bus for a Career with More Colour? by Raymond Johnston - Prague.TV
The Business Service Center once again brought colour to the streets on Prague!
Prague passes Kč 62 billion budget by Raymond Johnston - Prague.TV (Foto: Prague.eu)
Transportation will get the biggest single portion of spending
Catsit.cz® provides cat sitting services in Prague. Other...
Have fun. Help. Volunteer overseas - Let us organize your...
Finest Burgers - American Quality - NEW Location - Lesnická...
... the real luxury is actually waiting for you on your...
We do more for travellers
CST has been open in Prague since June 2016
Zebra Technologies EMEA
IT advisory, development and outsourcing