The Legitimacy of Economic Science in Turbulent Times

The concept of 'broad prosperity' has gained ground in policy circles in recent years. Where economic growth was traditionally measured in terms of GDP, broad prosperity also emphasises aspects such as health, equality, sustainability, and happiness. But according to Van Oort, operationalising this is far from straightforward. "What exactly do you measure? And what do you do with the results? As soon as you start talking about redistribution, you're essentially already engaging in politics," he argues. "You're implicitly assuming that the current situation isn't fair." This is why he advocates for the most transparent methodology possible, where societal cost-benefit analyses can serve as tools.

Who Benefits?

As an example, Van Oort cites the construction of a new tram line in Rotterdam. "Value is created – houses become more valuable and accessibility increases – but the distribution of that value is unequal. The house you bought increases in value, but the social housing tenant next door barely benefits. Should you, as an owner, perhaps pay extra tax when you sell?"

This touches on a core question of broad prosperity: how do you ensure that investments don't lead to new inequality? "Really, with every intervention – every metro line, every park, every new residential area – we should examine who wins and who loses. Only then can you pursue policies that are not only efficient, but also fair."

The Role of the City in Tomorrow's Economy

According to Van Oort, Rotterdam stands at a turning point. Old industries are coming to an end, and new sectors are emerging. "According to the new Spatial Planning Document currently being developed, a programme is needed that investigates what South Holland must do to get through this transformation. In doing so, we must ask ourselves: where do we want to go? Do we want to be the most sustainable port? The most inclusive society? Or the most innovative region for employment and income? Or all of these simultaneously?"

Van Oort advocates for a balance between these goals, but the emphasis currently lies heavily on economic growth. "From the 1980s and 1990s onwards, sustainability was leading, with terms like circular economy and doughnut economy. These remain important missions, but now you see the focus shifting back to economic business models, which is understandable given geopolitical developments and a tight labour market, but risky in the long term."

An important part of the economic structural change is the rise of artificial intelligence, which could further strengthen existing inequality structures. "The digital divide isn't new, but with AI, it becomes more structural. People with access to data, models, and computing power advance exponentially. The rest fall behind. About 60% of jobs cannot be automated or can only be automated with difficulty. So these people don't benefit from the AI revolution, but they do bear the burdens, for example, through job losses or reduced bargaining power."

Mission Economy and the Long Term

Van Oort supports thinking in missions, as described by Mariana Mazzucato in her book Mission Economy: A Moonshot Guide to Changing Capitalism. "She gives the example of the moon missions in the 1960s and 1970s: in terms of cost, it was a fiasco, but it produced technologies that later proved to be of enormous value and helped shape our current economy. The same applies to broad prosperity: benefits often only become visible in the longer term."

The Netherlands, and particularly national politics, is still very risk-averse, according to Van Oort. "Short-term thinking predominates here. Very little is invested in real transitions. In Germany, you see much more movement. There they deploy venture capital, even for missions that don't immediately pay off."

Evolution versus Revolution

Yet Van Oort doesn't advocate for radical upheavals. "I believe in evolutionary change. Don't throw away old shoes before you have new ones." His research shows that regions and cities can best focus on sectors that build upon existing skills and infrastructure. "Jumping to something completely new is possible, but expensive and complicated. Better to look at sectors where you already have a tradition. You have, for example, a certain educational level in your region. People have certain skills and abilities. Then you can see if there might be adjacent sectors that use comparable skills, so you can build on the existing expertise."

The idea that change should take place slowly and contextually runs counter to the discourse of 'acceleration' often proclaimed in politics. Van Oort acknowledges this tension. "Some of my colleagues say: we don't have time anymore. Climate, energy, inequality – it's urgent. Revolution sounds good, but if you don't get people and businesses on board, then your revolution will still run aground."

Science That Has Impact

The role of the economic scientist in this debate is complex. On one hand, they must analyse independently; on the other, society increasingly demands 'impact'. Van Oort: "We want to be relevant as a university, but we mustn't, of course, go along with populist desires. That's a precarious balance you have to maintain. You sometimes notice that policymakers are only looking for confirmation of what they want to hear. Our task is to present and interpret the facts as objectively as possible."

At the same time, there's often still too little room for interdisciplinary collaboration in academic circles, he argues. "You're mainly judged on things like publications and student satisfaction. Societal impact is often still undervalued. While crossovers are becoming increasingly important, like economists who can also think from a social science perspective and vice versa, and researchers who know not only data but also practice on the street."

A Mission for Rotterdam

What would be a suitable mission for Rotterdam during the current economic transformation? Van Oort is resolute: "That we become the most sustainable and economically profitable port in the world. Inclusive, innovative, and internationally competitive. Not a mission impossible – but one we can build upon from the strengths that already exist."

This mission requires vision, cooperation, and courage from policymakers, scientists, and citizens alike. The university, Van Oort concludes, plays a key role in this. "Not by taking over politics, but by showing as honestly and transparently as possible: if you do this, then these are the consequences. That's where our legitimacy lies."