George Magnus is an economist and commentator; an Associate at the China Centre, at Oxford University; and an adviser to numerous asset management companies. George writes about the global economy and has received plaudits in particular for having predicted a ‘Minsky Moment’ in 2007. In this interview, we have touched on a wide range of topics from his time as a guitarist in numerous bands, to his favourite books, spoiler alert – one of them is Why the West Rules by Ian Morris. It has been a pleasure to speak with George and we hope you enjoy reading about his journey.
Q: What is your dinner party monologue for when someone says “and what do you do?”
A: I usually say ‘I’m an economist’ at which point either someone changes the subject, or there’s an ‘ahh’, and the conversation goes directly to Brexit or the markets or something topical. It’s become a bit like doctors owning up to what they do and someone thinking it’s a great opportunity to harangue him or her.
Q: Could you tell us about where you grew up; were you a rural or city dweller?
A: I was born and bred in London. I spent my childhood in Wembley, young adult years in Willesden, Hornsey, and Harrow, and have lived in Highgate for almost three decades.
Q: What subject(s) did you excel at in school, and which did you find most challenging?
A: I didn’t really excel at any subject at school, to be honest. I was better than average at languages (German and French), and gave up English A level – actually I was turfed out of the course for serial not paying attention – and took up Economics with a year to go. I never got on with Sciences.
Q: Can you recall any reoccurring comments from your school reports?
A: The phrase ‘can try harder’, or ‘must try harder’ rings a bell, along with critical comments about my handwriting.
Regarding your undergraduate studies:
Q: Which University did you study at, and was it your first choice?
A: Organisationally challenged, I took a year out after school as I took my A’s at age 17, and then missed the deadline for university applications for the following September. So I did a London University, BSc at Regent Street Polytechnic, now known as Westminster University.
Q: What undergraduate degree did you study for at University, and in hindsight would you select the same subject again?
A: Economics, and I loved it – along with ancillary courses I had to do in Economic and Political History, History of Economic Thought and Statistics. It was a great time to become immersed in the social sciences, the politics of the time were exhilarating, and yes, I’d do it again.
Q: Can you remember a University lecturer who really inspired you?
A: I’m struggling here. Sorry.
Regarding your postgraduate studies:
Q: What motivated you to further pursue academia?
A: I became really interested in what was then called the economics of the Third World, and had come to know some young lecturers at LSE and Bristol University who egged me on. Plus couldn’t face the prospect of going to work.
Q: What institution(s) did you study at in your pursuit of postgraduate education?
A: I went to SOAS to do an M.Sc. in Economics, and dissertation on the planning experiences of India and China. SOAS was a riveting place to do development economics. It was challenging and eye-opening. I still go back there regularly for China roundtables, and I still see a couple of the people who taught and inspired me at the time
I then went to the University of Illinois in the twin towns of Champaign-Urbana. I enlisted in the School of Labor and Industrial Relations to do a PhD in labour economics in developing countries and to pay for it, I had a job there as a research assistant for a couple of young profs. It was good fun, and quite exciting to be in the US on a campus as the whole Watergate thing was breaking. But central Illinois? Nah… too boring, and I came home after 18 months.
Q: If you had your time as a student again, what would you do, if anything, differently?
A: Apply (in good time) to go to Oxford, which I’ve come to know quite well in recent years; and finish the PhD.
Q: Could you tell us a little about your professional journey to date?
A: When I came back from the US, I was ready to earn some money, but I was politically ill-disposed to go into the private sector. So my first job was an Economics Writer for the Central Office of Information, which was part of the Foreign Office. They taught me how to write. I then bit my bottom lip and went to work as an economist for Lloyds Bank International in Pall Mall.
That was the start of the slippery slope into the financial sector. After that, I worked for Bank of America, who sent me to work in San Francisco for a couple of years – no hardship posting, that! Then just before Big Bang, I worked for a broker called Laurie Milbank that was swallowed up and spat out by Chase, before a couple of even more serious jobs as Chief Economist, first of SG Warburg, and then UBS.
Q: What do you think is your biggest achievement?
A: I have made a lot of reasonable and a lot of rubbish forecasts in my career. But professionally, I think my best call/biggest achievement was predicting the so-called Minsky Moment (named after the deceased US economist Hyman Minsky, who taught about the causes of financial instability). Few people understood what was going on under the radar screen, but I like to think I connected the dots and my writing on this topic dated from 2006, two years before the Lehman crisis practically brought down the Western financial system, and I simply didn’t give up even though it was a lonely place to be. Timing was perfect, and the FT’s venerable Chief economics commentator, Martin Wolf, who suffers no fools, labelled my work ‘prescient’. That’s a decent enough plaudit.
Q: Can you tell us about your current professional focus?
A: I work entirely independently now, travel less and have tilted my work-leisure balance in favour of the latter. But I focus a lot on the post-crisis global economy, where we are making progress, and where we still have dysfunction. I spend a lot of time looking at China, and of course, Brexit and Trumpism/populism are giving economists like me plenty of new material to ponder and understand. The first of the two books I have written, The Age of Ageing, was about the economics of the great demographic shift going on in the world, and I still dine out on this fascinating topic.
Q: Let your imagination take over for a minute and tell us what you hope your successors will be working on in 2116?
A: Interesting question. Around 80 years ago, Keynes wrote a tract called The Economic Possibilities for our Grandchildren in which he anticipated a largely satisfied economy in which our biggest problem would be how to allocate leisure time. It hasn’t worked out that way. But I would hope that he might prove right in the next century. I imagine economists will be doing very different things with concepts of GDP, employment, living standards, and climate-friendly activity that are quite different from what they are today. Or maybe AI will have taken over, there will be no more economists, and machines will do all the cost-benefit calculations for projects and policies that economists do today. But politicians will have to find new experts to mock!
Q: What do you feel your professional legacy will be?
A: Wow – a professional legacy? I don’t know. Perhaps some of my more long-lasting material will help educate and inform new generations or be looked on as exemplifying what passed for reasonable thinking at the time.
Q: Are you working on any extra-curricular projects at the moment, such as: books, podcasts, websites, or speaking?
A: Yes. I speak quite regularly, which I enjoy a lot. I write a blog and maintain an inventory of all my published work on my website. And I have just started drafting a third book, due for completion at the end of this year, on China. The idea is an accessible book for an interested but not necessary professional audience on why China has reached a point that I call the end of extrapolation. Basically, it’s about why much of the hype about China is…hype.
Advice and Tips
Q: If you could give your 18-year-old self one piece of advice, what would it be?
A: Keep on plucking. I probably ended up on the right professional path, and I have been fortunate to enjoy some success. But I was playing guitar in amateur bands from the age of 17 until about 25, and the last band I played in did some TV and made a record. I always wonder what might have happened if I’d given this creative bit of my life more space and a free rein for a bit longer.
Q: What advice would you give someone looking to start, or progress his or her career in your field?
A: When the opportunity arises, I tell wannabe or rookie economists to make sure they do some postgrad work if possible, and rather than working in the financial services industry, I suggest to kick off in the government sector, home or abroad, or maybe in industries like music, entertainment and so on, where the very meaning of markets and products is changing so fast.
Q: Which book would you say has had the biggest impact on your life?
A: Why the West Rules by Ian Morris. I was thinking about a more classic novel like 1984 or even a more modern one like The Bonfire of the Vanities, but Morris’ book is a great opus about how and why the world and people have developed as they have, and what we might learn from thousands of years of history about the future.
Q: If you could recommend one book to a novice in your field, what would it be?
A: I would urge that A Short History of Financial Euphoria by JK Galbraith be mandatory reading. In 96 pages this economic guru tells us so much. The details of everything else can be found in so many other books, but this one hits the nail-on-the-head.
Creativity is born of disruptive change and thinking.
Q: Why do you think being a freethinker is important?
A: I do a lot of stuff on China, and for all that China and its citizens are nowadays, China shuns the notions of chaos, disruption and disorder as alien and insists that conformity is a necessary submission so that authorities can sustain order. This is the basis of all religion with a small ‘r’. Like many Westerners, I find this idea alien. Creativity is born of disruptive change and thinking. QED.
Q: And finally, we are back at the dinner party. Someone offers you a drink, what do you ask for?
A: I’ll have Bloody Mary, please. Or if we are into dinner, a glass of that nice Brunello you’ve got there.
If you’d like to find out more about George Magnus you can check out his personal website and Twitter page.
Books Recommended by George Magnus