The world’s leading economic policymakers are “on the right track” to ensure a global financial upturn, the chief of the International Monetary Fund told a Stanford audience on Tuesday.

But she warned the recovery will be derailed without the creation of more jobs, better education systems and a way to shrink the gap between rich and poor. And she cautioned against the potential pitfalls of untested exchanges and digital currencies such as Bitcoin.

“We are on the right track, but we need to ask – the right track to where? And the right track to what growth?” said Christine Lagarde, the IMF’s managing director. “Will it be solid, sustainable, and balanced – or will it be fragile, erratic, and unbalanced? To answer this question, we need to look at the patterns of economic activity in the years ahead, and especially the role of technology and innovation in driving us forward.”

Lagarde’s visit to Stanford was co-sponsored by the Freeman Spogli Institute for International Studies and the Stanford Institute for Economic Policy Research. In addition to delivering public remarks at FSI’s Bechtel Conference Center, Lagarde met privately with faculty and students during the day.

Just returning from the G-20 summit in Sydney, Lagarde said she is optimistic that the world’s economic leaders are committed to taking the steps that will guard against another large-scale financial collapse. She said the G-20 members agreed to complete a set of financial reforms by the end of this year, a move that will make the “financial sector safer and less likely to cause crisis.”

She said the member countries and their central banks have also agreed to better cooperate and be more transparent in their policymaking.

But she’s worried that unless more sustainable jobs are created, economic disparities will increase. And that, she said, will “harm the pace and sustainability of growth over the long term.”

As technology has helped create a more interconnected world, it is playing an increasing role in the economic landscape. Machines have made our lives easier. Artificial intelligence has led to cars that can drive themselves, robots that can do things in place of humans and smartphones that are more powerful than the first supercomputers.

But so far, there’s been no measure of how new technology has increased productivity.

“We certainly need to keep an eye on this,” she said. “One of the biggest worries is how this technological innovation affects jobs. Put simply: will machines leave workers behind?”

She said technology creates “huge rewards for the extraordinary visionaries at the top, and huge anxieties for workers at the bottom.”

Lagarde said it is up to educators to better prepare the next generation of workers.

“Educational systems are not keeping pace with changing technology and the ever-evolving world of work,” she said. “We need to change what people learn, how people learn, when people learn, and even why people learn. We must go beyond the traditional model of students sitting in classrooms, following instructions and memorizing material. Computers can do that.”

Instead, humans must “outclass computers” in cognitive, interpersonal and sophisticated coding skills, she said.

“Think of creative jobs, caring jobs, jobs that entail great craftsmanship – imagination,” she said. “And given the rate and pace of change, we will need the ability to constantly adapt and change through lifelong learning.”

She called on institutions such as Stanford to play a key role in the process.

“Stanford’s model of education was innovative from the very first day—co-educational, non-denominational, and always practical, focusing on the formation of cultured and useful citizens,” she said. “Stanford was ahead of its time back then. I know that it will continue to be ahead of its time as we venture into the exciting period ahead.”

But that exciting period carries with it uncertainty and risk.

Asked about the role that emerging digital currencies such as Bitcoin could have on the evolving economy, Lagarde was skeptical, calling it a “shaky and wobbly” system.

The currency’s trading website went offline this week, spooking investors and calling into question Bitcoin’s future.

“It’s a glamorous, sexy attractive new system,” she said. “But a monetary system is a public good. It has to be supervised and sufficiently regulated so it is accountable. At this point in time, I think Bitcoin is outside that perimeter of both supervision and regulation.”

Lagarde is the 11th managing director of the IMF, and the first woman to lead the 188-country organization. Since she took over the organization in 2011, she has played a role in the world’s most pressing financial matters, working on solutions to a sluggish global economy and the debt crises in Europe.

The IMF gives both policy advice and financing to countries in difficult economic situations. It also helps developing countries reduce poverty and become more economically stable. 

The organization is now poised to assist Ukraine, which is at risk of running out of money to pay its bills in the midst of a political crisis. The country is struggling to cobble together a temporary government in the wake of President Viktor Yanukovych leaving Kiev and being removed from power.

But until a provisional government is formed, the country cannot technically ask for help. When it does, Lagarde said the IMF will send “technical assistance.”

“We are ready to engage,” she said.

Here is Gerhard Casper, standing before 7,000 people gathered in Stanford’s Frost Amphitheater to hear him deliver his first speech as the university’s president.

It’s 1992, the second day of October. Stanford is embroiled in a federal lawsuit over indirect research costs. It is struggling with campus-wide budget cuts and saddled with $160 million in damages caused by the 1989 Loma Prieta earthquake. University officials are wrestling with controversies over affirmative action, sex discrimination, free speech and diversity.

“What was I to say at my inauguration,” Casper asks in “The Winds of Freedom: Challenges to the University,” a newly published book of selected speeches and extended commentary about those addresses.

“What was I not to say? What were my tasks?”

Casper spent months wrestling with those questions, writing and rewriting his inaugural address. Rather than focus on the university’s troubles with a promise to make them disappear, he instead emphasized Stanford’s role as an institution devoted to teaching, learning and research. He grounded his remarks in Stanford’s motto – translated from his native German as “the wind of freedom blows” – and charted the freedoms most important to a university.

There are eight, he tells his audience.

Among them: an unrestrained pursuit of knowledge, an ability to challenge long-held beliefs and new ideas, and the “freedom to speak plainly, without concealment and to the point.”

“The research enterprise can easily be smothered by internal and external politics, pressures, and red tape,” he tells the crowd. “The wind of freedom has been a necessary, if not sufficient, condition for making our great universities the envy of the world. Without that freedom, that greatness is imperiled.”

Humor and heft

Academic freedom was a recurring theme during his eight years at the helm of Stanford. It was a time in which he navigated the university through turmoil and debates not only faced by Stanford and other American universities, but by the entire country.

With “The Winds of Freedom,” Casper presents seven speeches from his presidency, along with a commencement address he delivered at Yale in 2003. They delve into free expression, campus diversity and affirmative action. They cover the university’s role as a place of research and its relationship to the politics of the day.

A book launch celebration and discussion will be held Feb. 25 at Encina Hall.

The big, weighty ideas often come wrapped in a sense of humor – sometimes self-deprecating – that was the hallmark of a popular and seemingly very accessible president who surely never spoke to the same audience twice.

Casper has done more than merely dust off and repackage his favorite or most important speeches into a book. These are addresses tied together by those notions of academic freedom. And in detailed commentary following the text of each speech, Casper explains what was on his mind when he was writing them.

“I put a lot of effort into my speeches,” Casper says during a conversation in his office at the Freeman Spogli Institute for International Studies, where he is a senior fellow and served as director from 2012 to 2013. “But if you take the speeches in isolation, you often end up with an abstract notion of what was happening at time. I wanted to use these speeches as an example of the complexity of issues and questions that I had to deal with as president.”

Diversity, identity and valid arguments

So here is Casper welcoming an incoming class in 1993, one year after delivering his inaugural address. It includes white and black and American Indian students. Some are the American children and grandchildren of Mexican and Asian immigrants. Only 5 percent are foreign students, but they hail from 37 countries.

The president is talking about diversity. He shares his own story about coming to America, telling the students about growing up in Germany in the wake of the Nazi regime and moving to California as a 26-year-old in 1964. He pokes fun at the accent he never lost, but reminds the students that “I have acquired an American `cultural identity.’”

He tells them they will all develop their own sense of cultural identity, adding that diversity makes the university a richer place.

“If we at the university were not committed to interactive pluralism, education would become impossible,” he tells the newcomers.

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“No university can thrive unless each member is accepted as an individual and can speak and will be listened to without regard to labels and stereotypes,” he says.

Read out of context today, passages of the speech tuck into the timeless tropes of America as both a mosaic  and a melting pot. It’s OK to assimilate, he tells us. We can still maintain our own identities.

But In Casper’s rearview mirror, the speech becomes a history lesson, a reminder of the American landscape 20 years ago.

“The early 1990s was probably the decade during which multiculturalism and identity politics were most prominent in the United States in general and on American campuses in particular,” he writes in his new book. “When I came to Stanford in 1992, I was ill equipped to deal with some of these issues.”

He goes on to trace the steps Stanford took to address diversity and he shares his thoughts – some scholarly, some personal – on the issues of social and cultural identity. He parses the differences between multiculturalism and diversity.

He discusses the adoption of a new policy on sexual harassment, moves made to increase the number of women on the faculty, and the tensions arising from the university’s struggle to support on-campus ethnic community centers. He revisits the political and ethnically charged student protests that unfolded in the early 1990s.

While he was dealing with the daily fallout of those matters in the president’s office, he was also searching for opportunities to convey his positions and address the issues in his public speeches.

Welcoming the Class of 1997 gave him one of those chances.

“In a university nobody has the right to deny another person’s right to speak his or her mind, to speak plainly, without concealment and to the point,” he tells the incoming students.  “In a university discussion your first question in response to an argument must never be `Does she belong to the right group?’ Instead, the only criterion is `Does she have a valid argument?’”

The lines echo those he used in his inaugural address, and they do so intentionally.

“If you have something you believe in strongly, you must repeat it and repeat it and repeat it,” he says now. “I do that. I plagiarize myself – not because I ran out of things to say, but because it was important to re-emphasize points over and over again.”

Defining academic freedom

So here is Casper in 1998, speaking at Peking University during the school’s centennial celebration. The Chinese government used the occasion to bolster PKU’s standing as a key institution that would lead the country into the 21^st Century, and Casper focused his remarks on the role of research-intensive universities and the integrity they must maintain.

“Academic freedom is the sine qua non of the university,” he tells the audience. “Academic freedom means, above all, freedom from politics.” It also means “freedom from pressures to conform within the university,” he says.

Reflecting on that speech in “The Winds of Freedom,” Casper shares an unsettling irony: as he delivered his remarks, he was unaware that a Stanford research associate from China was being held in a Beijing prison under dubious charges of betraying state secrets.

He learned about the matter several months after the event, and writes now about the university’s unsuccessful appeals for the researcher’s release to then-President Jiang Zemin and his subsequent decision not to pursue a plan for Stanford to open a program at PKU at that time.

“I did not think that it was appropriate for me to enter into an agreement with one of China’s most prominent institutions – continue, as it were, as if nothing had happened – while a Stanford researcher was being held in prison without any explanation,” he writes. “I certainly did not take the step to suspend our discussions lightly, since throughout my life, throughout the many years of the Cold War, I had always favored engagement rather than iron curtains.”

“Germans don’t give funny speeches”

Casper gave his first public address at Stanford when he was 53. But he had already spent a lifetime as a speechmaker.

“I had been viewed in high school to have the ability to talk well and address a large audience,” he says. “And clearly, I liked to do it.”

He was elected president of the student council. His principal and history teacher, Erna Stahl, would call him the school’s festredner, or keynote speaker. He was tapped as valedictorian of the Class of 1957.

He discusses his valedictory address – focused on the dearth of German role models – in the preface to “The Winds of Freedom.” He writes about his relationship with Stahl, how he was impressed by her stories of  confronting the Gestapo, and the impact that growing up in post-Nazi Germany had on him.

“We hadn’t done any intensive study of the Third Reich by eleventh grade,” Casper says. “That was due to the fact that the Erna Stahl believed very strongly that going into the politics of the moment – the aftermath of the Nazi period – would not be the best method to teach us the values she wanted us to have. It would have become too quickly biographical and personal and she was very insistent that there needed to be positive values instilled in us to balance against what the Nazis had perpetrated.”

The preface is as close as the book comes to reading like a memoir, and Casper condenses his childhood, education, academic career and personal acknowledgments into 15 pages.

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Photo Credit: L.A. Cicero

While there are only a few lines devoted to his 26 years at the University of Chicago as a law professor, dean and provost, it was in that city where Casper’s innate ability to connect with an audience meshed with his public persona.

“Germans don’t give funny speeches,” he says. “In Germany, jokes undercut your credibility. My speaking style – the self-deprecation, the humor – that was really honed in Chicago. My friends and colleagues had these characteristics, and those elements were brought into my life.”

He learned that a joke does more than solicit a laugh. It can disarm a critic, humanize a speaker and lighten up an otherwise serious speech.

“After all, you want the audience to keep paying attention if you really do have something important to tell them,” he says.

An era begins

So here again is Casper, new to Stanford on that second day of October in 1992 and about to take on the promises and problems of the university.

He opens with a light touch, addressing “fellow members of the first-year class and fellow transfer students.” He suggests with deadpan delivery that he was hired as Stanford’s president because he could properly pronounce the university’s motto as it appears in German on the president’s seal: Die Luft der Freiheit weht.

“Alas, I have bad news for the board of trustees,” he says, turning to look at the board members seated on the stage behind him. The phrase, he says, was originally written in Latin. Not German.

“If, under these circumstances, the trustees would feel it appropriate to renounce their contract with me, I would understand perfectly,” he says, cracking a wide smile for the first time.

“All I ask for is the opportunity to finish this speech.”

And with his first formal words as Stanford’s ninth president, Casper casts himself as a newcomer – an outsider here to lead, learn and speak his mind.