NEW YORK LETTER
Esther Duflo, 2019 Nobel Laureate in Economics, was the star guest of the Night of Ideas and Philosophy, co-organized on Saturday 1st February by the French Embassy in the United States, at the Brooklyn Library. The Frenchwoman, professor at MIT (Massachusetts Institute of Technology), administered twenty-one minutes four masterful lessons, and not only on poverty, her favorite field.
She started from an observation: in the United States, in Europe, and even in India, the homeland of her husband, the debates are extremely polarized around four main subjects: immigration, trade, inequalities and change climate.
The problem, deplores Esther Duflo, is that "Nobody trusts economists to answer these questions", even though they have a lot of data. "Confidence in meteorologists is twice as high as that in economists", she laments, citing a poll carried out in the United Kingdom in which the latter arrive even in the penultimate position, after the politicians.
However, without shared basic data, discussions are emptied of their substance, replaced by emotion, caricatural debates and despair: "If you feel that a subject cannot be resolved, you become more depressed", she says.
The search for a reason to live
Economists are somewhat responsible for this. People believe that they are there to make forecasts, when they are useless in this area …
First lesson, according to Esther Duflo, humans are much less sensitive to financial incentives than economists assume. People are confident that their neighbor will stop working if taxes go up or a guaranteed income is introduced, but say they would not do it personally. People just see … on themselves. TheHomo economicus is very uneconomical. What he is looking for are social connections, a reason to live.
Second lesson, on migration. It is generally believed that people move to seek higher wages – which will be praised by those sharing and criticized by those who are worried about their work. In reality, it is not. Again, the’Homo economicus really isn't.
The proof ? In the United States, where employee mobility is total, only 6% of Americans change county each year, compared to 14% in 1948. A furniture worker laid off in North Carolina will not easily move to New York. Two conclusions: first, mass migration will not take place; secondly, we should not expect a harmonization of disparities, which remain considerable in the United States, via migration and capital movements.
