Summary:Tuesday morning opened with Michael Milken moderating a discussion among four Nobel laureates in economics — Robert Fogel, Myron Scholes, Gary Becker and Robert Mundell — who addressed the many challenges and opportunities facing the world′s economic establishment.
Milken asked the four Nobel laureates to provide the audience with what they believed to be the two greatest challenges and the two greatest opportunities facing today′s economic order.
Becker believes the world′s two largest challenges to be the increasing gap between rich countries and poor countries, and increasingly low birth rates throughout the developed world. Becker challenged the panel to provide evidence as to whether or not we as a society know enough about what it really takes to raise the standard of living in poor countries. He raised Hernando de Soto′s challenge to Americans to consider the implications of legally enforced ownership rights suggesting the secret to bridging the gap between rich and poor lies embedded in property rights. Becker also stressed the fact that never in the history of the world have we seen 45% of the world′s population reach replaceable standards.
As for opportunities, Becker believes that unprecedented technological advances present us with the chance to do something positive about water treatment and solutions to global warming issues, to mention a few. Becker contends that every challenge creates an opportunity and nowhere is this more evident than in the issues surrounding global poverty. Becker believes that three things — free markets, the ability and willingness to invest in human capital, and the implications and benefits of an open economy — have worked wonders for the United States during its formative years, as well as for late-blooming countries such as Ireland and Australia.
Fogel proffered breakthroughs in physiology, chemistry and biology to be the two grandest opportunities, having allowed people to increase life expectancy and most importantly, its quality. The second opportunity according to Fogel is being at the forefront of further technological opportunities. Only domestic and international sanctions and limitations curtail the opportunities provided by technological breakthroughs, especially when dealing with breakthroughs in genomics and gene therapy. Fogel′s second challenge dealt with privatized healthcare and social security. Fogel argues that we have the resources needed to meet these challenges.
Scholes stated that one of the most important opportunities to us all is the ability to foresee and prepare for events that have the potential to shape our world. Catastrophic events such as disease, the threat of war, and all the benefits provided by a well-informed intelligence community, fall into this category. Equally important is the opportunity technology provides to increase prosperity in the developing world. People with access to computers and the Internet have greater opportunity to earn money and access higher education. The two most important challenges, according to Scholes are the negative multiplier effect created by the supply imbalance throughout the world and the present practice of people trusting governments rather than open markets.
Mundell seconds the notion that every challenge presents an equal opportunity, contending that the most challenging problems facing the world are global governments. He cites the lack of leadership among international bodies and organizations that deal with problems of peace, security, hunger, education, and the environment combined with the lack of an international monetary system in a global economy. With regard to the latter, Mundell said, "any country in the world that has its currency triple in value (Japan) against the dollar is asking for trouble." As for opportunities, Mundell cited the challenging opportunity faced by financial markets switching from a bank-based system to an equity-based system.
Among other topics, Milken and the panelists addressed issues of Mexico, Russia, Japan, job creation, and the over-emphasis on the importance of natural resources.
