Ms Shafik, you are crisis-tested: you held key international positions during the euro crisis, the Arab Spring and Brexit. You were unable to solve the crisis at Columbia University – you resigned. What was different there?

When I worked at the International Monetary Fund during the euro crisis, we were actually able to contribute to solving the problem by shaping policy and providing finance. Similarly, at the Bank of England and the World Bank, we had the tools to help address the crises we faced. But unfortunately, a university cannot have a direct influence on the political conflict in the Middle East. The tools we did have – education, research and public engagement – were overwhelmed by political polarisation, misinformation and outside actors using universities to pursue their agendas.

Why were the clashes at the universities after the outbreak of the Gaza war so violent?

Partly because people felt strongly about the horrific events in the region. I think it also has a lot to do with identity politics – with how important belonging to a group has become. As soon as you identify strongly with a group, it becomes difficult to see other perspectives. Universities are supposed to be places where people research, teach and learn about different perspectives, but unfortunately polarisation has also taken hold there.

What is the background to this polarisation in your view?

The rise of social media has replaced mediation by political parties, mainstream media and other social institutions. People who have an interest in dividing society use these powerful platforms to reach the public directly. This gives them considerable political power. Especially as social media is increasingly dispensing with moderation and fact-checking – as we are currently seeing on Facebook and Instagram.

Conversely, the traditional media are in a fundamental crisis.

I admire media that still try to maintain editorial standards and be balanced and fact-based. But the fact that a lot of information is available for free makes their business model really problematic.

What would be the alternative?

Some argue we should see the media more as a public good, like museums or other institutions that provide a service to the community and are not profit-oriented. But of course this model would also raise new questions. We are in a transitional phase in which it is not yet clear what the future media landscape will look like. However, the polarisation is not just about the role of the media. In this heated atmosphere, a strong social dialogue in which people can participate in democratic processes helps.

What are you thinking of specifically?

Switzerland is a really good example of this: here, people are constantly allowed and required to vote on all kinds of issues. This involves the public in issues that are important to everyone.

You are in favour of «citizens’ assemblies» as a way of involving people more closely in political decisions. How should we visualise this?

When Ireland had to make a decision on the legalisation of abortion in 2018, a group of citizens was invited. 100 citizens debated the issue publicly for a year and listened to witnesses and experts before Ireland held a referendum and ultimately voted in favour of legalisation. The public debate was based on data and expert opinion and was peaceful. I think that such models of public engagement will become increasingly important in the future.

Do you also advise Switzerland to hold such citizens’ assemblies?

I don’t want to and can’t give Switzerland any advice! But I would say that the combination of such a process before a vote is very effective when people are voting on really important issues. A process where real facts are reliably put on the table is key.

You also deal with such questions of the community in your book. You call it an «anti-populist manifesto». Is that your response to the Trump movement?

I wrote the book in 2016, in an extraordinary year: Trump was elected in the USA, and Brexit was decided in the UK. I didn’t really understand this massive popular backlash against previous policies at first, because people objectively had a better life than before due to political measures. As an economist, I am impressed by what was achieved in the 50 years after the Second World War – poverty fell like never before, and living standards rose rapidly.

But the fact that right-wing populism is on the rise is a consequence of democratic decisions. In many countries, this is what people want.

Many people still believe the populists’ promises. But I think that their policies will fail: If they erect trade barriers or block all immigration, or if they cut investment in social cohesion, this will worsen the situation of many people. I fear it will have to get worse before it gets better. Only then will people realise that isolationism and protectionism are not good recipes.

But the fear of social decline due to immigration is real. What can a non-populist policy do to counter this?

The immigration debate often revolves around the issue that migrants use housing, schools or social services but have not contributed enough. The idea behind this is that they have not earned the right to participate in the social contract – unlike those whose families have invested over generations. That’s why we need to think more about immigration, integration and the path to citizenship.

How should we talk about migration and its consequences?

It’s fair to ask people to contribute when they move to another country. It’s fair to say that immigrants have to have a job, pay taxes and prepare their children to contribute to society. The social contract means that we should invest in everyone and also expect all members of society to contribute. The terms of that social contract – what we owe each other – will vary, and countries like Switzerland have had some success with this approach.

In what way?

They even have an expression for it, which I only know in German: Willensnation. People form a nation, not necessarily because they belong to it by birth or race, but because they want to live together in one society and show solidarity.

But isn’t it naive to rely on solidarity when globalisation is massively exacerbating the fear of social decline in a society?

Surveys regularly show that many parents in Europe and the USA believe that their children will be worse off than they are. That is the core of the problem: instead of talking about how to make the cake bigger, we only discuss how it should be distributed.

How do you make the cake bigger?

We need to invest more to make the cake bigger – with high returns through smart investments. We should also talk more about the benefits of everyone contributing to the pie.

For example?

We need to address the fact that people will have to work longer in an ageing society. In many countries today, people can expect not to work for a third of their adult lives. We need to ask them to contribute more to society by working longer. We also need to invest massively in young people and in opportunities for retraining.

Critics of your book say you overemphasise the role of the state and don’t place enough emphasis on individual freedoms. What is your response?

How much state and how many individual freedoms are right and necessary differs from society to society. I am very open-minded about this. Singapore is a good example: 80 percent of the population there live in social housing provided by the state. At the same time, the economic policy is liberal. Singapore has a very free-market approach to the economy, but a very interventionist approach to social policy. It works well for this country.

In your book you don’t argue in favour of redistribution, but for better «pre-distribution». What do you mean by that?

Many on the left have traditionally focused on redistribution, the «Robin Hood approach» of taking from the rich and giving to the poor. But in many countries there is little political support for this. Instead, we should invest heavily in all people early in life to give them opportunities so that they do not become dependent on redistribution later on. For example, we could invest more in children who are born into very poor families because they have a greater need to catch up.

Can «pre-distribution» really replace redistribution?

One of my favourite studies in this context is called «Lost Einsteins». It shows that the same talents often remain unutilised when children come from poor families or economically weak regions. Origin and environment have a decisive influence on opportunities. The state should therefore invest primarily in early childhood education – from the age of zero to three – in order to offer children from disadvantaged communities a better start.

You also derive such ideas from your own biography. You were born in Egypt and grew up in the USA. Later, you were one of the most influential women in international institutions. What experiences did you have in this male-dominated environment?

At the beginning of my career, it was very difficult because I was often the only woman in the room. I had very few role models, but a few mentors. They were usually men because there were simply no women. I am very grateful for this support. But now that’s changing: the next generation takes it for granted that the sexes are treated equally.

What advice do you have for young women of this next generation?

People often ask me how I reconcile family and career. I then joke that it requires a «holy trinity»: a good partner, access to good childcare and a great boss. With these three things, it works much better.

You have criticised Switzerland, where opportunities are not equally distributed between men and women.

Affordable, high-quality childcare is not widespread in Switzerland. As a result, many women in Switzerland are forced to withdraw from the labour market. Yet there are many talented Swiss women who are very well educated. If society is unable to utilise these talents, everyone loses out.

But isn’t this primarily about values and culture in a society and not about opportunities?

In many countries, this reflects a traditional view of the family. The prevailing view is that the mother is the best person to look after a child. Of course, mothers play an enormously important role – but so do fathers. In modern societies today, women are on average more educated than men. In most countries in the world today, more women go to university than men. That’s why we need a better balance.