39 At the macro level, studies drawing on cross-country experience have suggested that certain measures of diversity – in particular, the degree of ethnic fragmentation – may sometimes be associated with lower levels of economic growth. 40 One explanation for this finding is that  31  Lombardielli et al (2005)  32  Tetllock (2015). 33  Iaryczower et al (2013)  34  Haldane (2014). 35  Lagarde (2014). 36  Haldane (2009). 37  Landemore (2013). 38  Guillaume et al (2015). 39  Alesina and La Ferrara (2000). 40  Easterly and Levine (1997), Alesina et al (2003). BIS central bankers’ speeches  7  fragmentation may make it harder for society to agree on the public goods it wishes to provide – transport, schools, energy, defence – thereby retarding growth. 41 Another is simply that it increases the risk of conflict and friction, which absorbs human and social capital and thus damages growth. The potential fragility of more complex systems is a familiar theme from other disciplines too. In ecological biology, complex eco-systems, like tropical rainforests, are known to be more fragile than simple ones, such as savannahs. Cascades, conflicts and contagion are both more likely and more potent, the greater the number of interacting parts. That means complex societies, like complex eco-systems and financial systems, may exhibit a “robust-yet-fragile” property. 42 The greater richness of the rainforest or cosmopolitan city may come at a cost. So diversity is no one-way street, no panacea.
It has been enjoyed by generations of children, so it has a particular resonance at tonight’s event supporting Children in Need. And it has a happy (diverse, multi-cultural) ending. But The Sneetches also shines an uncomfortable spotlight on a psychological flaw in us all – the desire to differentiate, to stereotype. A half-century on, this flaw is one with which society continues to wrestle, not least in a world where the co-mingling of cultures, races and creeds has never been greater. In practice, this co-mingling has not always had such a happy ending. Tonight, I want to discuss some of the issues around diversity. These are relevant to groups large and small, from communities and organisations to economies and nation states. These issues affect all of us, children and adults, whether at school, work or play. In keeping with the spirit, I want to discuss diversity by drawing on a diverse a set of disciplines to explore the lessons they hold. And I will conclude with suggestions for some new directions in promoting diversity, in particular in organisations such as the Bank of England. We are all sneetches Let me start with what might appear, on the face of it, a rather controversial statement. Everyone is this room is a star-bellied Sneetch. I am, all of you are and everyone outside this room is too. By that I mean we all discriminate, to a certain degree and in certain situations, based on the characteristics and creeds of the individuals we encounter.