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tbs eFM Highlights Interview with Bengt Holmstrom tbs eFM This Morning interviews the legend, Bengt Holmstrom 2016.10.17 [The Best Incentive, No Incentive] Turning the world of economics on it’s head, Bengt Holmstrom along with Oliver Hart received the Nobel Prize in Economics for their research into incentivised contracts and how they really work in the real world. So in amongst all the different prizes that have been handed out in recent weeks we now have the pleasure of catching up on the line with professor Bengt Holmstrom from Finland, a US based scholar who has been awarded jointly with professor Oliver Hart from Britain the Nobel Economics Prize for their research into real life contracts. Good morning to you, first of all from Seoul. It’s great to have you on the line. -Good to hear you. And, I mean obviously your day job is working at MIT Department of Economics, this subject is very familiar to you, but this research goes back decades, doesn’t it? You looked into contracts, the way they’re structured, can you tell us what was so ground-breaking that drew the Nobel Economics Prize’s attention? -Well, it is correct that this is work that was done, you know, in the late 70’s, 80’s, 90’s and these were times when people started getting interested in the role of information in economic decision making and how to treat, you know among other things, contracts and what kind of incentive they provide and so on. And this is not the first prize in incentive contracting but it is the first prize perhaps focusing on what’s called contract theory, which deals with incentivising people to do things right. I mean some of that borrows from common sense, doesn’t it? How do you take the common sense idea that, you know, if I want to get a job done I give someone a contract to perform and I try to make sure the contract is as appealing as possible to suit both parties? How do you take that further, that idea? -Yes, it’s very important to understand that there are two stages of a model, if you want to apply it, you know, there’s a part of this stage which is about trying to understand why contacts look the way they do in reality, and this was new. You know, the traditional economic theory just assumed that if we write a contract and then it’s enforced the way it is and that’s what happens, that’s what’s written in the contract. This theory takes into account the fact that you don’t know the same information as the other side and so on so it’s much more complicated in that sense to even study the question of quality and conceptual issues. But some of the, when you do models, you do want them to be giving obvious answers to obvious questions. So, you know, some of it seems to the outside as obvious because partly there’s a sense that the model is sensible one. And the model is like a conversation partner; you want it to answer in a sensible way to simple questions. You know, so if I give you stronger incentives do you want it to provide, the person to work more or do more closely what you want and so on. So that, I would say that there are a couple of things in my book that matter, there are other things that work that Oliver was very significant, discoveries that he made. In my book, the key thing was to understand exactly what information is relevant for contracting? And a lot of people at the time I wrote my thing thought that you know, if it gets very noisy the information it becomes irrelevant. But to make matters simple in some sense I showed that that’s not the right way to think about it. And it turns out that it’s always relevant, or most of the time relevant and when it’s not relevant it’s for a very different reason than they used to think. It led to relative performance evaluation, there’s a lot of people who think it’s natural but even there there’s a question of how you weigh the different measure that reflect relevance and the logic of why relative performance evaluation matters. And it is about filtering out information that is relevant, that’s the basic idea. And sometimes in order to filter out information that’s irrelevant you need to bring in information that is not directly related to what I’m doing but it just filters out the noise. So that was the first step and I stop here because I will explain the second step which is much bigger than this, but it was a way of getting started. Firstly, at this point I’d like to ask about the legal implications for this, whether this empowers workers when they go into contracts, because sometimes here in Korea we hear red flags go up when you talk about performance related pay. In fact, it’s the workers themselves who protest against those sorts of deals. -Yes, so that’s the second part, the question is why is there so much work that isn’t performance based? And that’s where my book is relevant, especially is relevant showing that when you have a situation where people, these early models were about incentivising a particular task or job or action really. And then what we worked on was what happens when people can do many different things. So that was the first step and then you can get to a situation where if you on one hand need to for instance bring – you want your worker to sort of make sure that the reputation of the firm is growing or at least maintained, on the other hand you want the worker to work very hard to say produce short term results, these are inconsistent with each other. And therefore, you know, if you are really worried about reputation, say or, environmental issues which are very hard to measure but you are worried about them that downstream somewhere, five years from now six years from now some bad things will happen, you know, environmental consequences then the best way and almost the only way to provide incentive for that is to not provide incentives for current performance and then structure instead – and this is very critical – then structure instead the task in such a matter that even though they don’t have any incentive these people will still do a good job. Now one has to realize that people, it’s not like people do nothing if you don’t provide them incentive. So it is about realizing that a lot of the incentive issues don’t have to do with whether they work hard or don’t work hard but whether they work smartly and on the right things. So this was a big shift in the theory of incentives, to align it better with reality and that I would say is one of the major contributions by this, and most of the work we’ve done. And (that is) understanding that sometimes the best incentive is no incentive and that leaves then to a reset the instruments, you know, realizing that one of the, that actually firms in some sense are in the business of not providing very strong market wide consensus. So this movement towards you know, saying that we have to incentivise people who are inside the firm and provide priority incentives in some instances it’s very misguided. And I don’t know if you have followed the Wells Fargo case, you know, the scandals from Wells Fargo, but that’s a good illustration of it. They were incentivised to create new accounts and new products and have customers buy the products and initially it worked very well because there were customers wanted it but then they forced upon customers products that they didn’t want and then eventually, they just created customers, products that were actually just fictitious. Well the Wells Fargo case is certainly something that our listeners can look into further, because we are so short on time I had to ask you and I need to get your thoughts during our own interview on what you said in a press conference after winning this prize. You talked about owner management and you used the family management of Korean conglomerates as an example, is that a fundamentally flawed model in the modern age? -I don’t recall that I said that, most of the things you see are not flawed, I don’t believe in the thought that, you know somehow Korea could have systematically for decades done a flawed model. I can’t believe that… It’s a very top-down model, I didn’t say you said that, I’m just asking if it’s flawed, in your opinion? If we need to get away from this conglomerate structure because we have a lot of young people who can’t even get contracts. -I would not position myself ever, my interest is in understanding why did you do that, it’s therefore a doctor, you know, I first want to diagnose why are you doing that, why is this happening? Because my premise is that there’s a good reason why you are doing it, good in the sense of there’s a reason; good reason a rational reason in some sense. Now that reason may be connected to a wrong objective or a narrow objective or maybe not a desirable social objective but narrowly good for this conglomerate or whatever. That we can fix, but to believe that people could systematically make mistakes, big mistakes, I’m not, that’s not part of the economics I’m doing. Now I understand, but what was your purpose then of highlighting the Korean system at the press conference? -Well, I think the reason it was we probably didn’t have capital markets at the time in Finland, so we didn’t have – and we still don’t have – very well working capital markets in the sense of the US. In fact, the US capital market is shrinking right now, that is the stock market. Half of the stocks on the New York stock exchange have been delisted because of regulations, because the stock market is more expensive than it used to be, backlashes, corporate governance is so intense that it’s just not worthwhile being on the stock market. So you know, the reason the Koreans, and I’m guessing because I haven’t studied you at all, but it is because you didn’t have a very functional stock market and you used internal capital markets and it made perfectly good sense. Now, as the world is changing and you want capital from abroad, you want a broader resharing and information flow into Korea, then that model may not be sensible anymore, but it’s not that you did stupid things. I mean Korea is a very successful in the history of economics, I mean economic development. So you have a fabulous example of how you can grow fast out of a failure – Finland by the way is the same. Finland was very poor, you know, seventy years ago, it’s a miracle really. And South Korea is a miracle. So it would be stupid for an economist to say that it was a stupid system that brought you that kind of miracle. No. I mean it’s just with specific reference to you contract expertise, as you mentioned it’s not something that you’ve gone into yourself but clearly we have a problem right now with the way that the economy is structured; the top down approach with what some people view as not necessarily the fairest system and not necessarily the fairest contracts. But maybe that’s something that you can look into in the future professor Holmstrom, we’ve got to leave it there. Thank you so much for taking the time to speak with us. -Thank you. Bye bye. Professor Bengt Holmstrom at MIT Department of Economics. You can get in touch with us right now, you can send us a message via Facebook by searching tbs eFM This Morning.

tbs eFM Highlights Interview with Peter Singer tbs eFM This Morning interviews the legend, Peter Singer 2016.9.29 [Bringing and Bearing the Moral Law] Peter Singer is a philosophy Professor at Princeton University and considered controversial for not shying away from today’s tough issues, from abortion to burkinis. Hear what he has to say on This Morning. Now, influential, controversial, practical, some words to describe the philosopher Peter Singer who’s pioneered discussions in the world of ethics on very sensitive topics from coming to the rescue of children in peril to abortion, from animal rights to global poverty. To celebrate our new fall or autumn season at tbs eFM, we can now bring in professor Singer. Good morning to you from Seoul. -Good morning, good to talk to you. Wonderful to have you on the line. Just a quick bit of background, you are a professor of bioethics at Princeton University in the United States, laureate professor at the Center for Applied Philosophy and Public Ethics at the University of Melbourne Australia, and your books include ‘Animal Liberation’ and ‘The Most Good You Can Do’. And that’s keeping it brief, so it’s a great honor to have you on the line with us. I mean, this book, ‘The Most Good You Can Do’ the title in itself sends a clear message to us, doesn’t it? That we should perhaps be doing what we can to help others? -Yes, certainly. But not only just something to help others, but whatever we are doing to help others, whether it’s giving our time or our money, that we should be thinking about will it be doing the most good we can? Because there are many different choices that we face and some of them are much better than others, and very often people just make emotional choices on this without a lot of thought. I’m arguing we should combine the head and the heart to make sure that we do the most good that we can. Now it I may venture just a little into the way of philosophy, why should we help others? I’m sure many of us do have the urge to do so, but why? -Well, I think one way of looking at it would be to say that other people are like us in a very important way and that is that their lives can go well or badly, and if we look at the world as the whole, if we detach ourselves a little from our own interests, I think we can see from that larger perspective we should be caring about the welfare of others as well as ourselves. We are not that different from others and if we think that our pain is a bad thing, that our suffering is a bad thing and conversely that it is a good thing when we are happy, then I think it’s very hard for us to deny that the pain of others is a bad thing and the happiness of others is a good thing. No doubt, but for example, some of us will have a religion, have a divine belief that will help us along with that, help us solidify this need to help others, perhaps knowing or suspecting that there will be some sort of retribution if we are not as good as we can be or at least if we are evil, that there could be very negative effects. For those who have no such belief system, as long as things are going well for them, how can they rationally turn around and not help others? -I mean I don’t have the kind of belief system that you mentioned. I think that we can do this simply on the basis of using our reason to see that we are one person among others, and that if we care about our own wellbeing, then to not care about the wellbeing of others, especially when we can quite easily make a big difference to their well being at either no cost or a very modest cost to ourselves. But that’s just a kind of a bias, just as we reject biases on the grounds of race or sex or something like that. I don’t think we should say this is me and that’s you or that’s them. I don’t think that that’s a good enough reason for saying their welfare doesn’t count. And again, that scenario we could probably devote a long time to, but it’s interesting to hear your thoughts on it. Another area, for example that you’ve urged people to help children when you are able to help them, but by the same token, you do not oppose abortion, as somebody who has several children myself, I think, imagine if we had gone down the abortion route, this lovely child of mine would never exist today. How do you square that? -Well, I mean it’s true that that child would never exist, equally that child would never have existed if you had not had sex in the particular occasion when that child was conceived. You might have had sex on a different occasion and a different child might have been conceived. Just as if a pregnancy had been at an inconvenient time, you might have not had that child but you might have later on had another child, perhaps just as many children as you now have. So I mean to me the point is that, when you have an abortion, you end a life before it’s really got going from the subjective point of view of that life, that is there is no being who is aware of it’s own life, who wants to go on living, who has plans. In fact, for the overwhelming majority of abortions there isn’t even a being who can feel pain; the brain is not developed enough for a sense of pain. So I see that as a stage at which it is ethically acceptable to decide that that life has not begun well, it has not begun at a convenient time and that it doesn’t have to continue at that point. Once you have a being who has all those capacities, who is more aware of their own life, then you have a very different sort of situation, and that’s the point at which I think you do want to protect life and save life and especially of course if the baby is a cherished one whose parents love and care for that baby. And if that baby then dies from some preventable cause, let’s say malaria, that’s a tragedy, both for the child and for the parents. And if a relatively modest donation to the Against Malaria Foundation for example would have enabled that child to be protected by a bed net and not to get malaria, not to die, that would have been money very well spent. I mean, self-awareness is a controversial issue, but one might argue that even a newborn has very little self-awareness compared with an embryo. -Well one might, certainly, and one might therefore argue that the death of a newborn is not the same as the death of an older child. Of course it may still be a tragedy for the parents who want that child, but I don’t, you know, perhaps for legal purposes we need to have a clear line and birth is the line that is mostly used. But that’s not the case in all cultures. Some cultures have had some ceremony at some stage after birth to accept the child into the community, and I think there’s some area there, there’s some margin where you could say that decision is a tolerable one because there isn’t a life in the same sense as there is later on. Yeah. And I just want to clarify for the record, when we speak of existence before, that in itself is a whole area that would warrant further discussion, but professor Singer, one thing that is already coming out in this discussion is that you don’t shy away from sensitive topics. In fact, we can bring you into the sphere of current affairs, because you have weighed in on the whole burkini argument, this idea of Muslim women being able to wear certain clothes, whatever they want really when they go to the beach. It’s a discussion that has gone from France to Australia and beyond, what are your thoughts, can you clarify them for us? -Yes, I think that we should not try to prevent people from, women in this case, from participating in all areas of life on the grounds that they may have certain beliefs that they don’t want to go out in public with certain parts of their body uncovered. And if we have a law that says you can’t wear this garment known as a burkini on the beach, which is a kind of a swimsuit that is designed to cover the parts of a woman’s body that according to her religion she believes she may not display in public, then you affectively are preventing her from going to the beach. And I think that that’s a penalty that we ought not to impose. The burkini actually developed in Australia, which is where I’m from originally, precisely because an immigrant from a Muslim background felt that it was a pity that girls could not participate in Australia’s beach culture. It’s important to Australians in the summer that the beach is a place where you socialize with your friends, where kids play. If Muslim girls are excluded from that, then that’s going to create a lack of integration in society. And if we want different groups with different cultures and different beliefs to actually integrate and come together in the community, it’s a mistake to say you have to expose the same parts of you body as other people from different religions or no religions. Yes. -I don’t see why we should enforce that. Well, it was your article on this that drew you today to our attention, but of course you are renowned in the world of philosophy and its been fascinating to look at your work, it’s a shame we don’t have more time to go through some of that. One quick not on the burkini, of course in Australia you also have some swimsuits to protect from the sun that aren’t so different, don’t you? Which gives us some pause for thought. -Absolutely, because we are worried about skin cancer and a lot of kids who are not Muslims cover up as well. And rightly so. Thank you so much for taking the time to speak with us. -Good. Your welcome. Thank you. As I said, renowned professor Peter Singer joining us on the line. You can have your say right now on this topic, on any of those topics we’ve discussed there and more, pound or sharp 1013 for 50 won per message, you can tweet us @efmthismorning.

tbs eFM Highlights Interview with Efi Latsoudi tbs eFM This Morning interviews the legend, Efi Latsoudi 2016.9.28 [What Happens Out There Affects Us All] Asylum seekers; refuges by the hundreds of thousands, people escaping war are flooding into Europe. A breakwater has been Lesvos, Greece a tiny Island home to Efi Latsoudi, winner of the 2016 UNHCR Nansen Refugee Award. So the United Nations High Commissioner for Refugees has appointed two remarkable figures for this year’s Nansen Refugee Award. As part of our special interviews in celebration of the new season, we welcome one of them, Efi Latsoudi, cofounder of PIKPA, a self-organized camp in Lesvos taking care of women, children and the disabled. This has been the scene this month as well of a huge fire on this otherwise picturesque Greek island that has become famous for really anything but the sort of luxury holidays that maybe people would have dreamed of in years fairly recently gone by. Thank you very much for taking the time Ms. Latsoudi. -Thank you very much for inviting me, thank you. So this big fire, we know thousands of asylum seekers were displaced as a result of that, how much more challenging did that make your work? -Look, we live in a situation that is really difficult, this crisis happening for more than one year now; it started in May 2015 and of course the reasons are there. There are thousands of people that need to flee their countries because of the war. So our country, Greece and the islands that we are living in like Lesvos are very near to a region that many people need to cross and to try to reach Europe. So it’s something that we are facing since many years. Lesvos has been receiving refugees since 2001, but in smaller numbers. Last year it was a huge number; 500,000 refugees arrived in Lesvos in one year, which is enormous for a small island. Well, you were one of the arrivals in 2001 having moved from Athens from what I understand it. So what was it like for you then and how does it compare now fifteen years on? -Look, the situation was very difficult always, even one refugee to deal with is a huge responsibility. Every person needs protection, and protection of his human rights, so every person is very important. But when you have like one hundred refugees per month it’s a different thing than having five thousand refugees per day. So for our island and for our capacity, it was huge. And also you have to have in mind that Greece is facing an economic crisis since years. So it’s even more difficult to deal with the situation and the solidarity that people in Lesvos showed to these refugees was even more important in this situation. And for me, it was not only the numbers of the people but, and the poor conditions, the deaths of the people. Many people died in the sea and we’ve had to deal with the relatives, we’ve had to deal with mothers that lost their kids and with families that lost mothers fathers; it was overwhelming for us. I can imagine. -Sometimes it was very difficult to deal with. I’m sure many of us would find that tremendously challenging to offer comfort and to strangers effectively as well. But from your perspective, you did found PIKPA back in 2012 I understand? Tell us a bit more about what drove you to do that, I know you’ve given a few good reasons for setting up such a facility already but, you know, not every local person has gone this far. -For us it was clear, when the flow of refugees started again to arrive to the island in 2012 we wanted to create humane conditions and an open center for the refugees. We didn’t want detention conditions for the refugees, and also it was really important to create an open facility because it’s very important that the refugees not to be isolated from the local community and to live near us and to be able to help them. For me at that point it was very crucial, the fact that the fascist party, the Golden Dawn, had raised their percentages in the Greek parliament and there was xenophobia and racism and there were murders of refugees, which was terrible. It was something that threatened us and the refugees, and so we believed that if we do something, if we have a shelter that we participate and we take care of the refugees, this will create a protection for the refugees for pull our society too. From a selfish perspective, how difficult has it been seeing Greece and Lesvos for example undergo the challenges of economic stagnation and deterioration, especially when tourists have obviously been put off going on holiday to some of these places that were reliant on tourists before? -It’s very difficult to, this year for Lesvos was very difficult because of the fact that tourism went down like seventy percent. For the islanders and for the economic crisis of the island it was a big crisis on top of the other crisis, but I believe that we have to face a humanitarian crisis and when we, as society we have to deal with people that flee from war, we cannot close our eyes and we cannot say that, you know, I have to only look for my job, which is more important. I have to look for my family and our wellbeing. It is important and we have to not forget this and we have also to support our lives, but what is happening out there concerns us all, because people that flee from war can be us very easily. We need not to forget that. It’s something that is very connected to our lives too and to our future. It’s very important to choose solidarity for me. It’s very important to participate to the solutions and to give solution as a society to these kinds of crisis. The economic part is very important, I know, nobody underestimates that, but the human part also is very very very important. Well I hope your voice is heard there from the ground, we know at policy level there are international leaders discussing these issues all of the time without coming up with firm solutions so far. Maybe a voice like yours, now with this kind of recognition, can be better heard. And thank you for taking the time to speak with us today. -Thank you very much for asking me to speak with you, thank you. And good luck with your efforts. Efi Latsoudi, 2016 UNHCR Nansen Refugee Award Winner. -Thank you very much. And you can get in touch with us via email efmthismorning@gmail.com. And you can get in touch with us via twitter @efmthismorning. You can also text us, pound or sharp 1013 for 50 won per message.

tbs eFM Highlights Part 1 - Interview with Chris Norman of the Legedanry Band "Smokie" tbs eFM Re:play interviews the legend, Chris Norman 2016.8.18

tbs eFM Highlights Part 2 - Interview with Chris Norman of the Legedanry Band "Smokie" tbs eFM Re:play interviews the legend, Chris Norman 2016.8.18

tbs eFM Highlights Part 3 - Interview with Chris Norman of the Legedanry Band "Smokie" tbs eFM Re:play interviews the legend, Chris Norman 2016.8.18

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