César Hidalgo: belief

Transcript context

…Very cool. Now in chapter 8, you started talking about Bretton Woods, which was this thing after the Second World War. And essentially to rebuild Europe, they set it up they set up these institutions and they kind of did financialization to encourage growth. And that was seen as such a success that financialization was actually seen as something that could be used to aid development even when it's not a war a war torn country. Tell me about that. The the story of, like, let's say, twentieth century Western institutions that is told more commonly is that after the second world war is over, The United States has an interest on helping Europe, you know, recover. And they generated, you know, different funds and institutions to help do that. There is a German Marshall Fund, you know, the World Bank is created, the IMF are created all in that context. And you know, the World Bank starts lending money to The Netherlands, to you know, France, to different countries. And those development efforts do really well because the money that comes into Europe at that moment, you know, translate into investment that helps rebuild Europe and Europe starts to pick up, it starts to grow, it starts to rebuild and so forth. And then people say, wow, you know, development is a really easy business, you know. You just throw money, you release the constraint of finance and it just happens. Now the thing is that Europe is extremely knowledge rich. So they were, you know, throwing money in a continent that was extremely knowledge rich. So sure, the bridge was not there, the hospital had been maybe you know partly destroyed and so forth, but the knowledge was still around. So if you liberated the financial constraint, you were gonna get that rebuilding happening. You know, and the GDP was gonna you know start to return to what it was supposed to be. Then they started to do the same thinking that you could develop other regions of the world through a similar model. And the results were not the same. Know? So many things happened. On the 1 hand, people started to think, maybe it is about, you know, institutions and so forth. And there were lots of efforts to try to now connect financial support with institutional reforms. So okay, we're gonna make you this loan, but you're gonna have to do all of these reforms within your country. And what happened is that a lot countries would do those reforms and the medicine still did not take, you know. Now there's people that have said that well, the thing is they would do these reforms only in form. They will not be real reforms. It would be kind of like a mimicry of the reform and therefore that's why it doesn't take, You know? But also, you know, there is people that think that in reality it's not just about institutions, knowledge also plays a role because the demand for those institutions that you need to develop comes from the more knowledge intense members of your society. You know, so what I do in in that chapter is is built a little bit of a parallel because when it comes to economic development, I think the 2 dominant ideas are that it's about knowledge or it's about institutions. And I'm happy to believe that both play a role and that sometimes 1 is the horse and the other 1 is the carriage. But there have been periods in which you can clearly see a change between the 2. ions. And I'm happy to believe that both play a role and that sometimes 1 is the horse and the other 1 is the carriage. But there have been periods in which you can clearly see a change between the 2. So I tell a lot of stories about China and how knowledge intense workers in China helped demand institutions of you know intellectual freedom and entrepreneurship that helped develop Zhongguan Zhu, the main innovation district of Beijing. I tell the story of the printing press, is an excellent example of a technology that enabled institutional change, you know, about 60 years later with the reformation.…

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