By Prof. Dr. Steven Dhondt (TNO / KU Leuven).
The GI-NI project is about inequality, migration and globalisation in the context of technological transformation.
Our message is to contribute to an inclusive Europe of shared prosperity by providing a better understanding of the changes and joint impact of three major transformations: technological progress, globalisation and migration; and offering policy and governance solutions to better equip citizens and companies, securing more equal opportunities and outcomes. The project team uses a multidisciplinary research approach with international stakeholder engagement throughout the project.
The objectives are high. And the start of such an endeavour is an excellent moment to retract a bit and ask ourselves the question: is this message still relevant in a time of a pandemic? These are times when most of us are trying to get access to vaccines and keep ourselves healthy and sometimes just alive.
We find the answer in one of the most unlikeliest analyst of our time, the Chairman and CEO of JP Morgan Chase & Co, Jamie Dimon (1). What can a banker add to the debate?
First, of course, it is always unclear why an American banker would want to address the current crisis. As they say in Dutch: “If the fox preaches the passion, farmer, look after your chickens!”. And he knows that his analysis may warrant some distrust. He addresses his shareholders with his view of the future. For once, a letter to shareholders is also interesting to read for social scientists. He acknowledges that basic instruments to assess future value may not be that useful. The net present value of NPVs is not what it used to be. That is a nice understatement. He also warns for analysing everything to death. Next, and this for an institute that I did not see as the representation of bottom-up action, he stresses the importance of employees not always following the hierarchical lines to get the message across. Dimon takes time to discuss what loyalty in an organisation such as JP Morgan Chase should mean. “Loyalty to employees means building a healthy, vibrant company; telling them the truth; and giving them meaningful work, training and opportunities.”, and “… teamwork is important and often code for ‘getting along’, equally important is an individual’s ability to have the courage to stand alone and do the right thing.”. Hear, hear.
We know that Dimon was a fervent critic of the former US President. He takes aim at many of the former policies (or non-existence of policies) and supports the changes that have been made in a short time in the US. He also points out that the pandemic is a source of innovation for companies next to its destructive part. Remote working capabilities are now enhanced, and he expects them to carry forward. At the same time, he says that JP Morgan Chase & Co will further centralise the main core of its personnel in its new New York HQ building. The virtual world does have serious weaknesses: knowing who you deal with is essential for making any deal; apprenticeship is impossible in the Zoom-world; Zoom decision making is slowing down decision making; spontaneous learning and creativity are eliminated. Again, the coffee machine banter is stressed!
It is the final part, in which Dimon discusses public policy, that contains the fundamental innovative component. He titles the part “American exceptionalism, competitiveness and leadership; challenged by China, COVID-19 and our own competence”. The part reads as the introductory part to the H2020 GI-NI project. There is some good advice at the beginning of our work:
- We should not be too over-reliant on economic models and use them appropriately. Models should not be used to justify what we believe. He explains that the economy is frustratingly complex. Overusing models devalue basic commonsense. We will try to keep our heads clear from the project management side and develop commonsensical solutions.
- Another piece of advice is not to cloud debates with unfair thinking and arguing. We should not be simplistic, blaming scapegoats, assuming the motives people have, and we should not create strawmen.
The past four years in the US (and Europe, for that matter) have been a test for all this good advice. And the future requires that we come up with thoughtful ideas and strategies. We should be able to challenge the solutions that Dimon is advocating. For example, should we have a multi-year EU Marshall Plan for healthy growth? Dimon lays out fifteen policies that need to be improved. Several of them are at the core of our project. We are there to discuss the results with you, Mr Dimon! I list only those policies that are at the heart of our project:
- “Training for Jobs: We need to build an education system that includes training for skills that lead to good jobs (and this will improve labor force participation).
- Paying for Jobs: We need to improve wages for low-skilled work (again, this would improve labor force participation).
- We need proper and consistent tax and fiscal policy — done right, it can actually help drive healthy growth and improve income equality.
- We need intelligent industrial policy.
- We need thoughtful trade policies.
- We need proper immigration policies.
- The cumulative, multi-year effect of doing just some of the measures mentioned above would lead to a healthier, more resilient and robust, and fairer America.”
Our work will be on the European situation. We are also looking at the world. Multilateral cooperation is essential, certainly in this world of reduced internationalism. Our project team combines economic, political science and sociological expertise to deal with all the questions that have been posted. We are looking at training, the impacts of technology, industrial policy, trade, and immigration. Our outcome is also to support a fairer Europe. In this sense, the objectives of H2020 GI-NI and JP Morgan Chase & Co are aligned. We remain cautious about the intentions of one of the largest banks in the world. Then again, we are social scientists and have different objectives. For now, we have a lot of work ahead of us. Let us get started!
*Jamie Dimon’s Letter to Shareholders, Annual Report 2020 | JPMorgan Chase & Co.