In Chapter 7, we focus on the domain of foreign direct investment (FDI). We claim that states often refrain from sharing sensitive economic information, even though it can be important to adjudicating investment disputes. We demonstrate that properly designed IOs, such as the International Centre for Settlement of Investment Disputes (ICSID), can ameliorate this problem by receiving and protecting sensitive information. We assess our hypotheses using new data on specific pieces of information shared – along with information withheld – from this institution. Specifically, we pair a measure of redactions in publicly released panel reports with qualitative case evidence. We show that key reforms designed to safeguard sensitive information increased the provision of this information and boosted FDI, especially in areas where sensitive information is particularly common. We conclude the chapter by discussing how solving this pervasive issue puts international investment institutions in tension with the normative goals of transparency and accountability.

Chapter 2 presents our core concepts, develops our theoretical logic, and derives hypotheses for empirical testing. The chapter defines our key terms and discusses the scope conditions on our theory. We then elaborate on what kinds of information are considered sensitive in our framework and describe the kinds of problems that can arise when such information is necessary for understanding compliance-related questions. We next expand on the necessary features of IOs’ confidentiality systems, providing concrete examples. The chapter concludes by developing our two core empirical expectations about the effect of confidentiality systems on the frequency of disclosures of sensitive information and on international cooperation.

We hope that these dialogues have been a useful and fun way to engage with these ideas. To make sure we are all on the same page as we leave the page, we now want to summarize the core arguments that we have made and also to acknowledge what we are not saying.

Our ambition in Angrynomics has been to provide a primer on why the world is the way it is today. We also wanted to do that in a way that neither patronises nor expects the reader to trudge through a scholarly treatise. We also wanted to keep it short. That has costs. Some people may find our analysis partial and our proposals underdeveloped. If so, they have misunderstood the point of the book. Our aim has been to introduce these ideas, not to seek to prove them or make the case that nothing else matters.

For example, we both agree climate change is the most important challenge facing humanity. Indeed, from that perspective what we are writing about is trivia. But we think our decision not to start and end with climate change as the defining issue of the moment is justified on the following grounds. If you don't first do something about the anger, about restoring “economics” over angrynomics, then you can forget about ever getting serious policies to address climate change. We will never get them off the drawing board for fighting among ourselves, while allowing our tribal instincts to obscure our judgements.

Similarly, some may think we give short shrift to cultural explanations of these same phenomena, and indeed we do. But we do so because our framework allows us to do something about the underlying causes of angrynomics. Starting and ending with culture does nothing. It's a counsel of despair. Once you have decided that half your country is made up of people who are entirely different from you, and therefore wrong, it can only end badly. We need to aim higher than castigation and moral superiority as ends in and of themselves.

The parable of the good father turned populist

We first met John in March 2009. He was working as a waiter in an upmarket restaurant in Naples, Florida. We struck up a conversation. John is Irish-American, originally from Boston, he had recently moved to Florida with his family. His girls had grown up, been through college, and had found jobs. Only his youngest was still living with him and his wife. They had moved to Florida looking forward to a peaceful retirement. The kids could visit in the winter months and escape to the sunshine.

Several months prior, John's youngest daughter was diagnosed with a very rare, but life-threatening, heart condition. Eventually, after many hospital visits, John learnt that there was only one specialist with sufficient expertise and the right technology to help his daughter. The heart surgeon was world-renowned and worked for the Miami Dolphins. John sought, and received, his help. His daughter was operated on and made a swift recovery. She is now a healthy 20-something. But John is saddled with over a million dollars of debt. That's why, approaching his seventies, he is still working.

When we first spoke to John, in 2009, he was angry. All over the news were reports of bonuses being paid to executives at a huge American insurance company called AIG that went bankrupt. John had done most things right in his life. He had played by the rules. He had paid his taxes. He was a good husband and a good father. Right at the end of his working life, all his plans were thrown in the air. He accepted that. His daughter's health came first. That was never in doubt. But these guys had cheated. They had bankrupted their firm, which the government – taxpayers like him – had to bailout, or it would, so we were told, destroy the whole financial system. Usually, this would be called extortion. These guys were lucky to escape jail. But worse, they were due to receive bonuses so extravagant that one year's worth would clear all the debts he had incurred to pay for his daughter's medical bills. John is soft-spoken. He is a mild-mannered man. Not one to lose his temper or start an argument.

Strong societies can bounce back from a punch in the face. Consider Iceland. If the run up to the financial crisis of 2008 was a party, Iceland was party central. Four Icelandic banks went on a frenzied international expansion and grew their balance sheets (they bought stuff in the hope that it would go up in value) to ten times the size of the economy. When those banks went bust, they took the whole of Iceland's economy down with them. An epic punch in the face if ever there was one.

They may have been reckless, but Icelandic bankers and their co-workers had brains. When everything crashed, a lot of those brains went home and played video games – it's dark much of the time in Iceland. And then they hit on something. Online gaming is a global industry that requires a lot of computing power. Computing power makes heat. Heat needs to be cooled. So why not stick the servers for online gaming, Bitcoin mining, and a host of other things, in the ground in Iceland (the clue is in the name), and run the show from there? Which is what they did. Iceland had supportive institutions that didn't throw unemployed people under a bus, which allowed them to rethink their options and redeploy their capital.

The financial crisis hurt, to be sure, but given those institutions it also encouraged the growth of a whole new set of ideas and innovations that brought the country “most screwed” by the 2008 crisis back to its feet faster than almost all the others. By 2016, Iceland had fully recovered. Wages were higher than before the crisis, unemployment was low, and consumer confidence was high. Tourism was booming, in part because the crisis a decade earlier had crashed their currency, so it was a cheaper place to visit. Ten years later and the crisis seemed like a bad dream. Icelanders had never had it so good.

It was a different kind of punch in the face when in 2017 waves of angry protests broke out, and in greater numbers and with greater voice than any that had happened in 2008. That anger was triggered by revelations in the so-called “Panama Papers”, which revealed tax dodging on an epic scale by Iceland's political and economic elites.

The parable of the angry folk singer

In the 1970s and 1980s, the British and Irish experienced local terrorism far more intense and frequent than anything the developed world has seen in the past 20 years. The Irish Republican Army (IRA) – a paramilitary organization seeking the unification of Ireland – declared themselves at war with the British state. The IRA killed 125 people in attacks in England, and over 1,500 people in Northern Ireland. Many more were wounded or maimed. Allegiance or opposition to the IRA split many families and neighbourhoods in the Catholic parts of Northern Ireland, and in some parts of the Republic.

Many years after the peace settlement and the IRA agreeing to disband, a denizen of Dublin went back there with a British colleague who loves Irish traditional music. So they went to a pub near St Stephen's Green, where traditional bands always played. In the pub there were maybe 30 or 40 people drinking pints of Guinness and listening intently. Ninety per cent were tourists – Germans, Spaniards and Italians. Maybe more. There were also some lost-looking young women over on a bachelorette weekend, unconvinced by the fiddle, banjo and guitar players. Few locals were to be found in the audience. The band was great. They were playing both ballads and traditional dance music. But the lead singer looked pretty glum.

He had a great voice, but he was miserable. Inspired by a rather sombre number, he then launched, unexpectedly, into an intense political monologue. Although not angry, he was primed for it. Despite the past 20 years of peace, and an extraordinary economic boom in Ireland over that period, he began to talk about martyrs, hunger strikes, the oppressed Irish, and the fact that we “still have to free our country”. And with his spirits lifted by nostalgia for the era of terrorism, he announced that “The next song I’m going to sing is a rebel song …”. His references to past struggles – fictional and actual – against British rule were lost on his audience.

The parable of the three economists

Karl was, if truth be told, more of a historian than an economist. Indeed, deep down inside, he thought that the whole turn of the world in the nineteenth century to market exchange, wage labour, and making everything into a commodity for sale for the sake of profit, was a thoroughly bad idea. His hunch was that labour was unique among commodities in that it was not really a commodity at all. Labour was, after all, like Soylent Green, made of people. And while Soylent Green cares not a jot what it costs, people do. And if the world around them changes in such a way as to make them poorer, through no fault of their own, they will get very angry and demand that the state protect them against these “market forces”. People laughed at Karl. They assured him that markets were as natural as the air we breathe, and provided, as Dr Pangloss promised, “the best of all possible worlds”. And then the world collapsed in the 1930s and people everywhere rebelled against markets.

John was, if truth be told, more a mathematician and a philosopher than an economist, but perhaps that's why he could discern another truth. That supply does not create its own demand because individuals’ decisions to consume and save and invest are separate from each other in time. Once you realize this, recessions and depressions suddenly make sense. If investors get depressed about the future, they will not invest now, which brings about the very outcome they are trying to avoid in the future, a recession. John thought he had found the answer to curing depressions. It's simple really. If your expectations of the future are depressed, all you had to do was spend some cash today to raise the level of prices tomorrow, and investors would start investing again today, anticipating profits ahead. The point of spending was not spending. It was to shift expectations of future profits. But when John's ideas became popular, Mikhał, who came from the same part of the world as Karl, found a flaw in John's logic that echoed Karl's hunch about labour.

The woman out of time

Francesca Salvo is a 78-year old retired academic who lives in London. Her parents migrated to London from Italy in the 1950s. Her father worked as a waiter and his mother as a cleaner. They eventually saved enough money to open an Italian restaurant in north London. Francesca was the brightest of three children. She excelled in mathematics and graduated in computer science from Imperial College in the early 1970s. She married a fellow academic, an English man. When Evan died from lung cancer at the age of 50, Francesca never quite recovered. She never met anyone else. Her two children, and her work, became the focus of her life.

Francesca officially retired 15 years ago but continued to carry out research and teach some courses for postgraduate students. With so much more free time, she decided to buy an apartment in Florence, near where she was born and had spent the first nine years of her life. She was still in touch with cousins and relatives. She loved going back to Florence. She had a passion for art and red wine. Her children would often visit, and she took them on tours of the Uffizi gallery and to see the frescos at the chiesa di Ognissanti. When they had children of their own, she still encouraged them to join her in Florence. There was just about enough room. She took her grandchildren for walks in the Boboli gardens.

As Francesca became older she struggled more and more with her trips to Florence. Instead of going once every couple of months, she went only two or maybe three time a year. Travelling was very tiring. The queues seemed longer at the airport. Maybe it was immigration. Too many people. She couldn't understand why security was so complicated. She would forget to take out her perfume, although sometimes it got through unnoticed. Her son kept telling her to travel light, but she didn't understand. You can't just put everything on your phone. She needed medicines for blood pressure, for cholesterol, and for diabetes. She had been told to take a double dose of vitamin D and vitamin C for her immune system. And she could never find the right ones in Italy.

The parable of the Spanish family who played by the rules

Pedro Garcia graduated in economics from the University of Cadiz in 1998. The Spanish economy was booming, and it didn't take him long to get a job working for a local bank in the mortgage approval department. Soon after graduating, he married his university girlfriend, Valeria. After a year of teacher-training, Valeria got her first job as a schoolteacher in a local school. In 2001, their first child, Anna Maria, was born.

Unsurprisingly, the Spanish housing market was much debated in Pedro's office. Young families like his were struggling to afford to buy properties like those of their parents. Prices had been booming for almost ten years. Some economists were saying there was a bubble. Pedro wasn't sure. He worried about the coastal property boom, but in towns and cities where he and Valeria wanted to live there would always be demand for good properties. Spain was in the European Union and had just joined the euro. Interest rates were lower than ever before, and the euro represented stability relative to Spain's past.

Pedro wanted to take out a big mortgage and buy a three-bedroom apartment in Cadiz, which they could just about afford. Valeria wasn't sure. Wouldn't it be wise to save more and perhaps wait for property prices to calm down? Pedro, and her parents, convinced her otherwise. “He has a good job in the bank, and you are a public employee, with high job security. Take out the mortgage and make a nice home for Anna Maria.” They signed the deal in 2002.

Over the course of the next ten years, their plans fell apart. Pedro and Valeria saw the value of their house collapse. Initially, Pedro held on to his job, protected by Spanish labour laws, but his salary was cut. Despite working in the public sector, Valeria first saw her salary reduced by 30 per cent, and was then made redundant in another round of budget cuts.

In late March 2020, the Covid-19 pandemic pushed the world into lockdown just as the proofs of this book landed on our desks. We immediately wondered, as the pandemic began to unfold, if what we had to say was still of relevance. We are convinced that it is. The key themes of this book are that any society encountering patched-up macroeconomic crashes (like 2008), the ever-increasing daily stressors of an aging society beset with rapid technological change, and rising inequality, was one that would produce an angry anti-system politics. That public anger would manifest itself in legitimate moral outrage and the weaponized energy of tribes. Not only is that still true, it is especially relevant in the current moment.

It may seem that the pandemic has quietened the anger, simply by everyone being told to stay indoors. Even the US presidential campaign seems to have been put on hold. Indeed, opinion polls have found renewed faith in centre parties and in the opinions of (health) experts. Meanwhile, those denying the pandemic or weaponizing it for politics seem to be losing their standing. So far, so good. But given that the underlying stressors we’ve discussed in this book are still there we need to consider how they interact with the actions taken to halt the pandemic. Indeed, with unemployment rocketing up everywhere, that anger, under lockdown for the moment, is likely to come back with some new targets as a result of this crisis.

An early example of this was the anger of Bernie supporters in the US asking why the Federal Reserve can always find a few trillion dollars to support financial markets whenever it's needed, but their asks, for student debt forgiveness and universal healthcare, are always “unaffordable”. Class advantage is in full display in the pandemic as seen in who gets a Covid test, where you can decamp to avoid the virus (Devon in the UK and the Hamptons in the US), and who can work remotely to maintain an income and who cannot. As we move forward under lockdown the wisdom of the immigration restrictions popular with populists will be tested as much needed food for cities lies unpicked in the fields due to a lack of immigrant labour combining with the lockdown.