Jean Tirole

Photographer: Stephen Jaffee | Image property of: IMF Photograph

Jean Tirole (Troyes, France, 1953) graduated as a civil engineer in 1976 from the École Polytechnique de Paris. Shortly afterwards, in 1978, he obtained a PhD in Mathematics from the University of Paris-Dauphine and, in 1981, a PhD in Economics from MIT (Massachusetts Institute of Technology). Throughout his professional career he has received numerous awards and recognitions, including the Gold Medal of the French National Centre for Scientific Research, and in 2007, the Legion of Honour in the rank of Chevalier. Culminating in the 2014 Nobel Prize in Economics, for his analysis of the power of markets and the impact of public regulation.

He is considered one of the most relevant and influential economists of recent times. One of the most innovative features of his work is the applied integration of two mathematical theories within economic analysis: Game Theory and Information Theory. By means of Game Theory he developed predictive models about the choices of the various economic actors, who ignore the interests and choices of the other actors in the system. Actors who, of course, do not know the first ones either, despite the fact that their decisions are interdependent. As for Information Theory, Tirole develops the way in which the various actors use privileged information in a strategic sense.

He is also the author of numerous works and publications such as The Theory of Games, The Prudential Regulation of Banks, The Theory of Industrial Organisation, The Theory of Corporate Finance and The Economics of the Common Good, one of his most recent books, published in 2017.

Precisely in The Economy of the Common Good, Tirole argues the need for economics and morality to go hand in hand, and he puts it as "an ambition that aims to make individual interests go in the same direction as collective interests", building policies that make them converge. On liberalism, for example, he explains that "it does not consist of letting everything go by", but of "making people, who are the economic actors, responsible for moving in the direction of the common good". And accepting, for example, that it is convenient to lose a little GDP in favour of the climate, given that while individual interest leads to consuming more coal because it is cheaper, the common good should lead to understanding that if a limit is exceeded in global warming, we are all going to lose something much more important than a little GDP.

Tirole also believes that inequality is a failure of markets, and that the role of the state should be to correct those failures. However, he rejects that the responsibility lies with politicians, as they have their own interests, focused on staying in power. That is why every citizen also has a share of responsibility in achieving the common good: "We have to understand that populists live off our discontent, our concerns, the crises, the debts, climate change, and they present a world without limitations in order to return to a paradise that never existed. We have to stop them in their tracks by explaining to them how the economy works."

Sources:

BBVA Foundation Frontiers of Knowledge Awards (https://www.premiosfronterasdelconocimiento.es/galardonados/jean-tirole/)

El Blog Salmón (https://www.elblogsalmon.com/economistas-notables/economistas-notables-jean-tirole)

El telégrafo de Ecuador (https://www.eltelegrafo.com.ec/noticias/economia/4/la-teoria-de-juegos-inspiro-a-tirole-sobre-el-control-a-los-monopolios)

Tek'n'Life magazine (http://www.teknlife.com/reportaje/posible-la-economia-del-bien-comun/)

Fátima Gordillo