Our Voting System Is Broken, Here’s the Fix - Eric Maskin | Endgame #256 - en

I suspect that whoever is elected president in the US in 2028 [music] will

be much more attuned >> to these issues.

>> Little pulse on the ground. >> Exactly. They see all too clearly what

happens if they ignore that. You get someone like Donald Trump who is very

sensitive to the discontents [music] of the population but has no good

solutions to offer. Now that we are attuned [music] to the problems, we just

have to make sure that we get the people who have some of the answers in a

position where they [music] can implement those answers. But often times

we look at democracies being driven by a process that focuses on just

electability. [music] How can we improve upon that

pre-existing condition that may not be so ideal?

What we need are better election systems [music] to get the leaders with the best

ideas into office. I have some optimism that despite power structures, [music]

it should be possible to elect people who really are doing something for the

majority of the [music] population. >> [music]

>> Hi friends, it's a pleasure to tell you that my book What It Takes Southeast

Asia has been released in English and Bahasa Indonesia. You can buy it through

books.game.id or at any of these stores. Now, back to

the show. Hi friends. Today we're graced by

Professor Eric Mascin, who is a professor of economics and math at

Harvard University. Eric, thank you so much for gracing our show.

>> Thank you for the invitation. >> I usually start off with questions on

your upbringing. What made you curious when you were a kid? Or who?

>> Well, uh I can't say that I was uh a terribly diligent student from the

beginning. Uh, I liked school and and and I liked learning things, but it

really wasn't until I got to high school and I had one

particular math teacher that I realized

that thinking about in this case math, but I

extended that to other things could be such an exciting and such a rewarding

enterprise. [snorts] Uh he allowed me to see that that math is more than just a

uh way of doing calculations, coming up with a uh an answer, but it's a way of

creating relationships of among numbers. It's a

it's it's a way of understanding

uh mathematical objects but by extension objects in the real world and and

that was a revelation to me and and had a had a deep effect.

Speaking of revelations, you you often talked about

there having [snorts] there being beauty in the way math,

you know, prevails in life. [snorts] Talk about that.

>> Well, I I think that mathematics has many of the same qualities that that art

has. uh

it relies for example on symmetry. Symmetry

is an important concept in math as it is uh in the visual arts even even in

music. Um simplicity is is an important quality in math. uh understanding

something in the most fundamental the most elemental way. Uh the the greatest

art, the greatest music also has a uh has a simplicity

uh about it. And uh and there's also a a harmony that

that is bringing uh different ideas which look as though

they might not have anything to do with one another into alignment. That is

that's that's harmony in music where where you put different lines which are

really quite different together to make a a beautiful hole. Same thing in

mathematics. >> Is that why you play a musical

instrument? >> Well, I play I I play the clarinet and

the piano partly for that reason. uh but partly because it's

there there are qualities in in playing music

that uh

you don't get in writing a an economics or a mathematics paper. Uh part of

playing music is expressing emotions. uh it it it provides a an emotional

relief and uh although I think the effect of mathematical work

can elicit emotions, you don't actually get to put your emotions into the paper.

Uh so so I I like the I like the contrast between

>> [snorts] >> um per performing art where where you

where it's all a matter of motion and uh and scientific work where uh

by the very nature of the enterprise you can't really put your emotion into the

work. You you talked about symmetry given the fact that we might be

witnessing quite a number of asymmetries. Now do do you see math as

as a remedy? >> Well, math is a tool. I it's not a a

remedy but it's but it can be used to create

remedies. So for example

uh a lot of my recent work has been directed toward improving voting

systems. I I think one of the major shortcomings uh in my country, the

US, but this is also true for other countries, is that we have that we're

using voting systems that fail to elect leaders who are most representative of

what citizens want. And in studying all the possible voting

systems we could use, we have to use mathematics. You a voting

system can be rep can be represented mathematically and analyzed

mathematically. And so math plays a big role in in my work on voting systems.

You you came up with the many things, one of which is the mechanism design

theory. Explain that to to the lay people out

there. Yeah. >> Mechanism design I like to think of as

the uh the reverse engineering part of

economics. Uh normally

normally in economics we look at existing institutions and we try to

explain or predict the outcomes that those institutions markets for example

will produce. And that's and that's a very worthwhile enterprise. Uh it's

what's called positive economics. uh but I I prefer to do the opposite.

That is I I like to start with the outcomes.

These are the outcomes we would like to have and then work backwards to figure

out what kinds of institutions we could create,

>> right? >> To achieve those outcomes. So, so a very

particular example of this is a voting system. A voting system can be

thought of as a mechanism. Uh in in the case of the voting system, uh the idea

is first to to say well what what kinds of outcomes

do we think a good voting system should deliver and what those are the goals,

the outcomes we want to achieve. And then from from that point we can work to

figure out the actual voting systems that would deliver on those goals.

>> Okay. If if I may, I'd like to put that in a context of perhaps Southeast Asia,

>> which is predominantly made up of developing economies, those

that earn less than $13,25 per capita per year.

Most of the households in these countries are headed up by

somebody without a university education. >> Right?

>> In Indonesia, about 88% of the heads of households don't have university

education. [snorts] But we seem to be shackled by

the idea that democracy ought to be just

manifested in the distribution of power, right? without putting premium on the

fact that most that vote don't have the necessary educational

wherewithal. How would you take that into account in

in a proper mechanism design theory for a better voting system

>> in the case of inequalities in education? I I would I would say that

the first step uh

is for leaders to make clear how the number one priority the the

number one investment uh ought to be

in education. doesn't have to be university education. Even secondary

education uh is is important.

It's important because as you say for democracy to thrive

citizens need to be informed uh about the

uh democratic options they have who the the

the candidates for office uh and the best way for them to become

informed is to have the educational background. ground which uh teaches them

what they need to know uh in in in every in any given election. Uh but education

goes beyond uh

its effect on a a good functioning democracy. It also

helps uh it it also helps economically

clear clearly it it it directly affects

uh those who get educated because with education comes

>> [clears throat] >> uh come come skills which they can then

use to to get better employments. Uh but it's also good for the for the country

as a whole to have a better educated labor force. You know, as of late, I've

been thinking of a democracy

as something that should represent the ability to better distribute public

goods. >> Mhm.

>> Including education, healthcare,

welfare, social value.

moral value, right? But often times we look at democracies being driven by a

process that focuses on just electability

as opposed to perhaps whether the candidate has intellect,

has moral value, has social, has the ability to distribute, you know, health

care and welfare to the people. How can we improve upon that

pre-existing condition that may not be so ideal?

>> Um, one way is through an election system

which makes it easier for candidates who are not

necessarily backed by some power group to actually run for office. and

>> and and win. Uh [snorts] I I personally have worked on a on a voting system

which is sometimes called true majority rule.

It's sometimes called condor say voting. Uh and

it has the property that uh even if as a candidate you are not being

backed by one of the big parties, you still have a decent chance of

winning if your message to the public

resonates with them. Uh because under true majority rule,

you win if a majority favors you over each other

candidates. So um it's not necessary for

uh let me go back to American politics for

for a second. It's not necessary uh if you're an independent candidate

to get all of the Democrats to endorse you above

um a Democratic candidate. And it's not

necessary for you to convince all the Republican voters to endorse

uh you over the Republican, >> right?

Rather, you are

putting together a coalition of voters

who will support you against each of the major

um major party candidates. Uh and that's

and and that's the way uh to break the strangle hold of power.

in in politics and that's the way for

independent candidates with good ideas

uh to to actually get into office. So uh I have some optimism that despite power

structures, it is it should be possible to elect people who who really are

uh doing something for the majority of the population.

>> You spent some time in China. You've supervised many academics in

China, prominent ones. I met one or two of them in the past. Uh,

China just seems a bit paradoxical to me in that their political structure is

centralized, but their economic activities

seem much more decentralized. Whereas we're seeing many democracies

around the world that are politically decentralized but not seemingly

able to decentralize economic activities. We're seeing much more

centralized economic activities. Why is that? And [clears throat]

what do you think can be done

for the sake of these democracies or or if you have any observations with

respect to what China could have done better?

Well, so so your I your rough characterization

uh I think I would agree with uh China was able to

develop so well economically since the

late 1970s, early 1980s precisely uh because It did

uh decentralize it. It it it decentralized in two ways. First, uh it

allowed many more economic decisions to be taken by markets,

>> right? >> And

and private more or less private companies,

>> right? >> Um it also decentralized

uh in the sense that rather than

um all governing coming from the central government, quite a lot of power was

given to local governments, local and provincial governments. And the reason

I the reason in both cases why those moves

worked so well is through a very simple economic concept competition. Uh in both

cases, uh

competition between rivals, either rival companies or

>> mayors or or rival mayors, uh induced those parties to perform better. if if

you're competing, you need to

apply yourself and perform better. And that very simple

idea from economics uh was a major driver of

uh of uh economic improvement uh in China

as as we've seen in recent years. I worry that

there's been a uh a relapse. Uh

that is the the the current regime rather than continuing to decentralized

has if if anything recentized uh economic power. And and I I think

that's unfortunate. It's unfortunate for China, but I think it's also unfortunate

for the world because it it will mean that China is not as

um effective

as it as it might be um

both politically and and economically. What about the counter to that? Your

observation with respect to democracies which have not seem to decentralize

economic activities as well as they should have.

>> Yes. Well, let let me talk about the US uh since

that's >> feel free to talk about us too in

Southeast Asia. [laughter] >> Indonesia. pretty robust democracies,

you know, >> right? Let's look at what happened in in

the US and and this has actually happened

twice in in in US history. Uh in the late 19th century, early 20th century,

there was a uh a great period of

economic growth um led by

oil, led by steel, led by the railroads and all of that.

uh was brought much greater prosperity to the country but it ended up

concentrating economic power in the hands of

>> a few >> a very few uh so uh fortunately

um there was a remedy for that the the u antitrust legislation

And uh

a number of these monopolies were were broken up and

that was that was good for the country. It uh it

was good for the country in the sense that

uh you didn't have so much >> power concentrate but it was also good

as a way of restoring competition. If you're a monopoly, you don't have to

compete with anyone. You're you're there alone. Uh same thing has happened

uh in a in a different era with the rise of big tech. We we now see these big

tech monopolies. Um and sadly not much has been done so

far about limiting their power. I I firmly believe that

uh we need to do [snorts] what we did >> Yeah.

>> back in the early 20th century. >> High time.

>> It's high time. And and and I think that same lesson doesn't just apply to the

US. It it it it applies in in uh in other democracies as well where where

economic power has been too heavily concentrated.

>> It's it's a little concerning, you know. I mean one could refer to

many sources. One of which is, you know, what was written by Darren Osamog, Power

in Progress, where he talked about how the median wage of the Americans from

1945 until 73 rose

>> y >> 2.5% per year, but ever since the

internet, call it the early '7s, >> it's been stagnant or even

>> less less than.5%. It's it's a bit paradoxical in that

technological innovation has not entailed you know shared prosperity.

>> That's right. Uh one way of explaining what has happened

in in in recent years

uh is the idea of what's called skill skill bias techni technical change where

yes we have a lot of new technology but

the people who can best make use of this technology or or whose productivity is

most enhanced by this technology are those with high skills. The the the the

people wi without those skills are are left behind. Um and this this has been

true certainly in the United States uh but for somewhat different reasons

um in um in developing countries too. Uh I've

I've been very interested in the rise of inequality

in developing countries because it comes as

something of a surprise to the conventional idea of um comparative

advantage. uh

according to comparative advantage. If if a country

uh is becomes more heavily involved

in international markets, if it if it's embraces globalization,

>> uh then that will give that country the

opportunity to specialize in products that make use of its uh most abundant

resource. Now in de in uh rich countries, highly developed

countries, that resource is

highly skilled workers. So you would expect highly skilled workers to benefit

from globalization in

rich countries. Uh but comparative advantage would also

make you believe that in developing countries it's the

low-skilled workers who should benefit because they're in great numbers. And uh

and so we we might have predicted and and a lot of people did predict that

globalization was going to reduce inequality

in developing countries because it would enhance the demand for for low-skilled

workers. Countries would be specializing in products produced by low-skilled

workers. Well, that um that didn't happen. In fact, we've seen

inequality increase there as well. U and I've I've collaborated with uh Michael

Kramer, well-known development economist to to try to understand

uh what what has gone on in developing countries. Uh we we see it as the

outcome not just of the globalization

of of trade but also uh as the outcome of the globalization

of production. So production itself has been globalized. Think think of

computers. Computers might be uh designed in the US and

programmed in Europe and then assembled in China.

But in order to um to do this globalized production,

the demands

will be for workers who have some skills. E

even in the assembly of computers,

>> right, >> you need

workers with with some some basic skills. Pe people who have done

subsistence farming all their lives are not going to be part of that labor

force. They will they will not be part of

uh a globalized production process.

And and that is where we see the greater inequality is coming from. The fact that

uh globalized production calls for workers at least above some skill

level and leaves out those who who don't meet meet that skill level. Uh there's

also a a remedy uh for that problem which is

and this comes back to education >> to to allow

uh much greater numbers of people to acquire the skills they they need to

be demanded by uh global production enterprises. Does

does that explain the kind of revisionism that we're

witnessing with respect to the pre-existing

international order? >> Mhm.

>> That would have thrived until recently on a back of unfettered

free trade, globalization and peace. >> Each one of these has been somewhat

challenged >> recently, right? I mean this this falls

into your design of mechanism design theory. So, so don't get me wrong. I am

I think that on average globalization

and for that matter new technology uh automation

are sources of great

potential prosperity. I I I am not in favor of stopping globalization or

stopping new technology. But what we've neglected is

the really quite profound distributional

inequalities that globalization and new technology

have brought. We uh it's been fine for for the many

people who have benefited, but for the perhaps even greater number of people

who have not, >> we haven't done anything for them. We

haven't we we haven't done enough to bring them into the into the modern era.

Uh and that you know that's where mechanism design could be useful. Uh, in

other words, uh,

I'm in favor of markets, but

not all consequences of markets can be left

to be solved by by market forces. that there are important corrective actions

that society, government needs to take and

and and perhaps the most important is investing in training

uh and education for for a modern economy

>> in in the absence of somebody like Roosevelt who could restructure the

pre-existing frame and the prevalence of

markets not being able to democratize

public goods to the rest of the world. What conviction do you have that this

will get remedied? I guess it's it's it's a matter of time

frame, right? >> It's a matter of time. So, so

I'm I'm a great believer in looking at historical experience because nothing

that that is going on now is completely unprecedented. We've seen many of these

things before. So, so take take the first industrial revolution um late late

1700s, early 1800s. uh we we remember it now as a time

uh of great productivity increase. Uh and in fact over the course of the 19th

century average wages wrote rose at a

uh at an almost unfathomable rate. uh they

had remained more or less steady for hundreds of years and then all of a

sudden they took off and and this was largely attributable

>> to new technology. >> Uh however, if you look more carefully

at what happened that increase in wage did not occur

immediately. In fact, there was something like a 30 or 35 year lag till

it started kicking in because it took that long for people to figure out how

to marry labor and machines in a way which

would make uh productivity higher. Uh and

before that happened there was very considerable social unrest. People were

lo there were lots of jobs being lost. There was a great increase in inequality

just just as >> uh there is now. Uh

same thing happens at the beginning of the 20th century.

Uh [snorts] but in both cases, society eventually

caught up. Uh and society eventually

elected leaders um like the two Roosevelts, Teddy and

Franklin, uh who u

who really did something. >> Yeah.

uh to address the

the ills of the of the market system. Uh and I and and coming back to

um politics and voting systems, I'm I'm firmly convinced

that there are

political aspirants out there with great ideas for

uh doing what the Roosevelts did. >> Yeah.

uh as long as um they can get elected and and and and so I come back to the

point I was making before. But what we need are better election systems to get

the leaders with the best ideas about economics, politics into office on on

the assumption that the the gap or the divorce between

policy and opinion lingers within the US and some other

countries. [snorts] Would you argue similarly that the

revisionism that comes in a form of call it bricks

that wants to serve as a counterweight to the failing

international order might just be episodic

and things might revert back to normaly

when structural impediments are remedied in due

I you know I I do tend to be an optimist and

>> me too [laughter] [clears throat]

>> in in these matter. I you I think there is

already in in the US a an acute awareness

uh among um

the um politicians who were

uh around for

the what I call the the neoliberal uh era in which there was very little

attempt to correct uh

the ills of of capitalism.

There's an acute awareness that that that was a mistake.

uh that that uh while they

uh while they shouldn't be growing markets out, they need

to have uh concrete policies for

ensuring that more of the population isn't excluded by uh by by market

forces. So, so I I think there's already a

corrective uh underway. I I suspect that whoever is

elected president in the US in 2028 will be much more attuned

>> to these issues. Little pulse on the ground.

>> Exactly. Uh- because they they see all too clearly what happens.

>> Yeah. If they ignore that, you you get someone like Donald Trump who is very

sensitive to uh to the discontents of the population

but has no good solutions to offer. Uh so now that now that we are attuned to

the problems, we just have to make sure that we get the people who have some of

the answers in a position where they can implement those answers.

I I want to take you to the issue of sustainability.

I I see energy as one of the more

underrated unequalizers as it relates to the developing

economies. You know, I come from a region where

the average electrification per capita is less than 2,000 kilowatt hour per

capita when >> the United States and China and all the

other developed economies are above 10,000 kilowatt hour per capita. I

mean, we keep hearing AI every day and we we know how much

disproportionately more it uses energy, right? you know, compared to

pre-existing technological innovation and at the rate that the developing

economies, call it the global south, you know, are just not adequately energized,

they might just be further left behind and then inequalities might just

exerbate on the basis of just lack of energy.

What's your take on this? And then Yeah. So, [snorts]

uh, it's a real problem. Yes. Uh

again, one reason why I

have some optimism in >> in this dimension as well is that it

seems likely that

energy costs are are going to fall uh and they are falling. Uh the the cost of

solar energy for example has come down really quite dramatically in the last 10

years and it's going unlike uh fossil fuel uh energy where

there's a uh uh a limit to how far we can go because there will always be a

cost of getting the the stuff out of the ground. uh with with solar um with wind,

with with water power, um there are many conceivable additional improvements we

can make. And so with the fall in

energy production costs,

we we'll see a greater opportunity for developing countries to

pull themselves into the >> 21st century

>> technological capital which will get cheaper,

>> right? >> But it also requires economic capital.

Yeah. >> Which unfortunately has not been

democratized >> right

>> from where it sits in a concentrated manner to where it needs to be.

I'm concerned that this may continue. It may not change to the extent that

economic capital does not get reallocated, does not get further or

better democratized in spite of the availability of

technological capital. The developing economies may still not

be able to rise up to the occasion. Well, uh

here here again is uh is where good leadership matters. the uh

and and where where democratic forms of government have

>> right >> have an advantage. Uh not only in

being required in some sense

to elect officials

who are uh accountable to the public. But in

being able to get rid and and this might be even more important, the the ability

to get rid of leaders who have failed to >> address

uh problems such as as inequality and and uh unequal power.

>> I want to take you back to where we started which is education. Right.

>> Right. I would I would argue that teaching is

more scalable than parenting. Teachers stand in front of 20 to 200

kids whereas parents in front of two to three kids in general.

You're a product of somebody who infused imagination,

ambition through your math teacher in high school.

Well, any suggestion on scaling good teachers in developing

economies? I mean, just just to put in context, teachers in most developing

economies, they make about $100 to $200 a month.

>> Well, you're not likely to recruit good teachers that way, right?

>> You're not. So, so one thing that we do a much better job of now than even

a few decades ago is measuring

the impact of teachers. It is now possible

to uh

track what what becomes of the students in a particular teacher's class, how

well they do, uh what their incomes are. And

to a remarkable degree, the

teacher student relationship uh very much affects

what happens to students in later life. So better teachers

make a huge difference. uh

take one particular school, two teachers,

the students leaving those different classes will have vastly different

experiences. So now that it is possible to measure

the effect and identify

um who is

creating those effects. What we

what we need is uh a system in which

uh good teachers are paid what they're really worth and and we know what that

is. Yeah. >> Uh

this is something which uh which perhaps teachers unions

>> will resist because teachers unions >> prefer

all teachers to be paid equally. But uh at a at a time where there's nothing

more important than education as an investment, it is critical to be able to

uh reward the really good teachers and that is scalable and and is more cost

the the the uh the easiest solution would be just raise all the teachers

salaries. That's not cost effective. uh you you want to raise the salaries of

teachers who are really >> deserving

>> deserving and who whose >> product

>> uh economic product is is highest. >> Yeah, I'm with you.

You're a product of STEM. China

allegedly produces 4 to 4.5 million stem products per year. Mhm.

>> India 2 to 2.5 million. Southeast Asia about 750,000

of which Indonesia about 250 to 300,000. The United States allegedly less than a

million a year. >> Yeah.

>> Does that concern you or does that excite you?

I'm not I you know I can't say that I am terribly worked up by the

competition with with China. Uh

it's not a zero- sum game. >> Okay.

>> Just because >> y

>> China is doing well that is not or not doing well that that that's not a reason

for us to uh overreact. Uh

so I so I am concerned about

um the future of STEM

in general. >> Sure.

>> But it doesn't worry me that at the moment China seems to be doing a

better job of it than the US. uh that the that that that particular rivalry

I think is is not of the greatest consequence. I would like to see uh for

their for the sake of development uh more STEM and Southeast Asia.

>> Of course. Of course. Uh that's

but but you know for the same reason that I think um

energy >> is

getting easier uh to uh provide at low cost. I think I

think uh I think teaching will be possible

to provide at lower cost through technology. We we we can have uh

[snorts] we can have many more Zoom classes.

>> Yeah. uh we can have even one-to-one interactions

between students in Indonesia and teachers in China or teachers in the US.

Uh >> awesome.

>> It that that education is also being globalized and

that will help

level the playing field and also uh help uh unite the world. It takes the

Indonesians to shout out including what we're doing here.

Eric, last last message on inequalities. Any any particular message

on how we can be more optimistic about dealing with and addressing

the pervasive inequalities.

I tend to be uh

as I already mentioned a uh a lesson taker from from history in these

matters. And uh every time in the past where we have seen a world

moving toward greater inequality that

that very trend has set in motion forces

which bring things back. We saw that in the 20th century. Well, we saw it first

in the 19th century, then in the 20th century. I have every confidence that it

will happen uh again precisely because so many people

so many uh

well-intentioned and well-informed people are are thinking about it.

>> Thank you so much. It's It's been a pleasure.

>> Friends was Professor Eric Maskin from Harvard University. Thank you.

>> [music] [music]

[music] >> Heat. Heat.