DW spoke to Michael Spence, a 2001 Nobel Prize Winner in economics for his modern research on information and markets. Spence revealed his optimistic prognosis for the world and how winning the prize changed his life.
Spence wants to find a multinational mechanism to solve the world's problems
Deutsche Welle: What are the main challenges the world is facing?
Michael Spence: We have a number of important challenges. Global warming, the rising pressure on natural resources, accommodating growth in developing countries and, when you take that list, what we really need, I think is progress in finding ways to deal with these on a kind of multinational basis -- a really effective mechanism.
What is your solution? Is it only this multinational institution you are talking about?
No, there's a lot of work to do on the domestic policy front. But I don't think anybody has a solution to that. I think it's going to take a lot of smart people, many of them are young, and a fair amount of time to redesign mechanisms for doing this. It is a challenge.
Can the world still be saved?
Oh, sure. I'm not pessimistic about this at all. I think these are manageable challenges with wise and collective decision making about them. Prices provide very powerful incentives to change behavior and so far we are seeing that already. So I'm actually pretty optimistic, but there's a big challenge ahead.
How do you personally try to improve the world, to make it better?
In the last couple of years I've spent my time as the chairman of a commission on growth and development. So I've been focused on the developing world and its growth strategies and challenges and essentially trying to see the world through their eyes, because I think it's an important perspective to have, if one is trying to bring together a larger group of important players into a discussion about managing the global economy.
In which other academic discipline would you like to do some research, other than economics, if you had the choice?
I'm probably a little too old for this, but there's very exciting work being done by young people in political economy, a cross between political science and economics, that I think is terribly important. If I were a little bit younger and had the creativity I'd probably try to dive into that area.
And which subject at school didn't you like at all?
You know there isn't an answer to that. I can't think of anything I didn't like.
I grew up in Canada, so I played ice hockey. Right up through college I played hockey for Princeton University. I love sports.
Where were you when you received the news of your Nobel Prize?
I was in Hawaii. I was in a different time zone by, I think, three hours. So when the call came to California I wasn't there. And then some friend saw it go up on the Web site, so somebody phoned me in the middle of the night. It was a complete surprise.
And what happened then?
Then we stayed up and tried to figure out what you are supposed to do when this happens and then the press started calling.
How did you personally benefit from the Nobel Prize?
You have to be a little careful. People listen to you an awful lot. And one of the best pieces of advice came from one of my colleagues. This guy said, "Mike, people are going to ask you questions about things you know absolutely nothing about and probably the best thing to say is 'I don't know!'"
Are there other negative implications?
No, I mean you become more visible and a slightly more public figure. I don't think of that as negative. I think it carries some responsibilities, actually. You're expected to show up and try to be helpful. I think that's a small price to pay for an honor like this.
What did you do with the prize money?
I am in the process of setting up a little foundation, a sort of fund for charitable purposes. Then I can use the income to support various causes.