Matthew O. Jackson: "The parents of your friends are one of the most determining elements of your professional trajectory"

BarcelonaMatthew O. Jackson (Elmhurst, Illinois, 1962) holds the William D. Eberle chair in economics at the prestigious Stanford University, in the United States. His research focuses on the decision-making of economic agents and its consequences for society, placing special emphasis on the role played by the connections between the different individuals in society. His research is considered pioneering and extremely influential in this area of study, a fact that earned him an honorary doctorate from the Autonomous University of Barcelona (UAB) this October.honoris causa by the Autonomous University of Barcelona (UAB) this month of October.

Why are people networks so important for the economy?

— We rely on each other for many things, and this includes information about opportunities. Social norms are formed through relationships. We pay attention to what our friends do. For example, there are extensive studies that indicate that between 30% and 70% of jobs and recommendations are found through friends. The fact that people depend on others for these opportunities means that networks of people determine who is well-connected and who is not.

How determinant can a person's family and place of birth be for their future?

— Of all the factors that influence or predict a person's future, not only are your parents determinants, but also the parents of your friends. If you look at a child in high school and see where they end up, their friends' parents are one of the most decisive elements of their future professional trajectory. The climate and the environment in which you grow up will be very important in determining your aspirations, your goals, and your opportunities.

Does this mean that we should work actively to generate connections that bring us closer to a life with more opportunities?

— I think it is difficult to unilaterally change one's network of contacts. But, at the same time, I think it is not valued enough how important it is to put oneself in new situations in rather unknown areas and where you could meet people with whom you would not normally come into contact, stepping out of the comfort zone. The simplest option would be not to do it, and also for parents who have children not to do it, but this would prevent the fact of being exposed to other scenarios.

A good part of his research revolves around homophily, the natural tendency of people to relate to others who are similar to them. Does this behavior have more positive or negative aspects?

— What is needed are not networks that take us to an extreme, but diversified ones, so that people have robust connections within their community [...] but also a diversity of contacts outside. And the latter is more complicated to achieve. One thing that is not valued enough about social networks is that they offer us the opportunity to generate more and more connections, but they also give us the possibility to filter more and more, to be more selective. Even the algorithms integrated into social networks try to find people who like the same music as you, who share the same religion or the same political convictions. And that accentuates everything even more.

He states that social networks help us to be more connected, but at the same time there are people who feel more isolated than ever. Are we living in a paradox?

— The problem arrives when we judge everything based on what we see on the networks and what influencers publish. They appear at parties and living new experiences, while we, on the other hand, are sitting in a dark and lonely room, scrolling on social media. This can create the erroneous impression that everyone lives a very exciting life and we do not, and I think it is especially hard for children. It is easy to have a biased view and end up feeling excluded in some way.

How does this new way of relating to each other affect the economy in general?

— When we study networks of people, we also extrapolate this to companies and countries. With globalization, there have been enormous changes, especially in the last five or six decades, in the quantity of goods crossing borders, in the degree to which economies are intertwined, and in the degree to which people travel between countries. A much more integrated world is seen, and this integration also allows shocks to travel from one place to another. Regarding social aspects, it is not as evident how they are transmitted across borders, but the economic aspects are very real.

Is more integration synonymous with more danger?

— As one interacts with more partners, their portfolio becomes more diversified, so they are less exposed to certain threats. But a higher degree of connections also leads to greater integration with the whole world, and this can cause shocks to spread. Thus, the most resilient structures are those that have either very few connections or a very high number of connections. When you are at an intermediate point, you are susceptible to shocks, but without the full benefits of diversification.

Should human relationships be taken more into account when designing economic and social policies?

— Without a doubt. A clear example would be the proposal to introduce a tax on the super-rich to redistribute wealth. The measure may be useful, but it does not address the root symptoms of inequality. Why do some people have billions of dollars and others have very little money? This is the question we must attack if we want to manage to make a difference in the long term. In fact, if even only a purely economic approach of maximizing the global productivity of a society is taken into account, it is necessary to ensure that people's talent matches the opportunities to be productive. Beyond any dimension of equality, pure productivity suggests that there are reasons why we should worry about improving people's networks and opportunities to progress in life.