Johannes Huth: Shaping the future of political economy

The economic and political ideas that shaped the 20th century are facing increasing challenges. We can see the evidence for this all around us: declining standards of living, widespread dissatisfaction and mistrust, and the growing popularity of populist political parties all signal that our old political economic models are failing. But what will replace them, and how will these new ideas shape the world in the 21st century and beyond?

LSE alumnus Johannes Huth (BSc Economics 1984) is determined to leverage the School’s world-leading expertise to answer these questions. An ardent supporter of LSE and current LSE Council member, Johannes has done as much to shape the School’s trajectory over the past 40 years as LSE has done to shape his, working alongside the School’s last six Presidents and Directors to help make it the world-leading institution that it is today.

Now, Johannes has made another transformative contribution to LSE with a £10 million gift to create the Huth Initiative for a New Political Economy, an interdisciplinary project convening leading minds from across the School and around the world to lay the foundation for solving the biggest challenges in global political economy.

How LSE has shaped Johannes’s life and career

We sat down with Johannes to learn more about his history with LSE, what motivates his dedication to the School and what he hopes this new Initiative will achieve.

What led you to choose LSE for your undergraduate studies, and what stood out to you about the School during your time as a student?

"I knew that I wanted to go to university abroad after I finished high school, and LSE had an excellent reputation in Germany at that time because Professor Ralf Dahrendorf, who was the Director of LSE, had a very high profile in Germany as a leading sociologist. So I was interested in coming to LSE because of him and because I knew I wanted to study economics – LSE was then and still is today the best place in Europe to study economics.

"When I arrived at LSE in 1981, what stood out to me about it was what an international place it was even back then. There were many other European students and obviously many from the UK as well, but there were also big contingents of students from Asia and Africa – it was a hugely international student body, and for me it was fantastic to get to know so many different people from such a wide variety of backgrounds. That sort of global approach was something that really distinguished LSE in my eyes, as was the emphasis on academic rigour.

"At that time at LSE, students were assigned a professor who acted as an adviser and mentor, and because of that I developed a relationship with Professor of Economics Basil Yamey, the well-known South African economist. He was a superb mentor and gave me great advice throughout my time at LSE. Beyond that there were lectures and seminars where Nobel Prize winners came to speak to us, and the overall quality of the teaching was obviously outstanding. And I think that ability to have access to top-class academics and to be exposed to that type of thinking as a young undergraduate was a distinguishing factor that you could only really get at LSE.

"When I finished my undergraduate degree, I went straight to the University of Chicago to study for an MBA. The level of the courses at LSE for undergraduates was so advanced that I was well set up to succeed in Chicago and I found I could move through it with relative ease.

"The valuable things that I learned at LSE at that time weren’t so much the facts and details, because those are forgotten relatively quickly. It was the approach to thinking about and resolving problems in the context of economics and business, which really has provided me the basis for the rest of my career. It sets you up for life."

What advice would you give to incoming students about making the most of their time at LSE?

"I’m not sure that much has changed in terms of the incoming student experience between 1981 and today. I think that, for me, what was most valuable was getting as much exposure as I could to different ideas and ways of thinking, and engaging with a variety of world-leading scholars even within just one department – in my case, the Department of Economics. I think that’s something everyone coming to LSE should seek out, because that’s how you really get the most out of your experience.

"The other thing I would say to incoming students, beyond the learning, is to take advantage of the international community here to make friends and connections with people from around the world. For me, the group of friends that I made at LSE gave me a global network, and now, when I travel to different places, there are often people I know there from my time at LSE. That’s not something you can easily get elsewhere and it’s not something to neglect while you’re here."

When did you reconnect with LSE after graduation, and what has kept you involved over the past few decades?

"After the University of Chicago, I came back to the UK in 1987, but at the time I was very much focused on building my career. It wasn’t until sometime in the mid-90s that I thought about giving back to LSE by getting involved as a volunteer. I was having success in my career and wanted to find a way to contribute a bit back to the School, so I joined a fundraising committee. Initially it wasn’t that intensive of a commitment – maybe four to six meetings a year in total – but it got me thinking about LSE and the ways in which I wanted to be involved with it."

"I have always felt that, if I’m going to be involved in something, I want to understand it well and spend time on it. Over time that feeling led me to get involved in the School more and more deeply, and when Sir Howard Davies became Director of the School in 2003, we developed a personal friendship that led me to get more involved with the governance of the School. I was able to contribute some of what I had learned about university structures and governance at US institutions to help make improvements here at LSE.

"One of the most rewarding things about my relationship with the School has been that it offers me a perspective on things completely different to the one I am otherwise exposed to. When you’re in a professional career and you’re focused on doing your day job well, you’re not necessarily really thinking about the kinds of problems that students entering university today are seeing in the world or how they think about the impact those problems will have on their lives and careers. Having access to that perspective – what problems the current generation are thinking about and how they interact with those problems – is something I have always found to be an incredibly enriching part of my roles at LSE."

How Johannes is shaping the future of political economy research at LSE

How do you understand the challenges in political economy that the Huth Initiative is working to solve?

"I think today we have a vacuum in terms of political thinking. The liberal or libertarian approach to political economics, the one associated with the ‘Chicago school of economics’, which has worked very well in many ways since the 1980s, increasingly seems to have run its course – it has opened up the world, but at the same time it has led to significant wealth inequality and widespread dissatisfaction. The idea that the free market will solve everything worked well for a time, but today that idea has reached its limit.

"So the question becomes, what will replace it?

"The reactions to that question that we’ve seen in many places have been political projects that are illiberal, xenophobic, and anti-intellectual, even where they borrow free market language.

"If we want to avoid those ideas taking root everywhere, we have to ask what else is out there – what alternative to our old political-economic models could somebody propose that is compelling enough to win elections, and that is appealing and convincing from an intellectual perspective.

"But while we can all see the challenges around us, the pressures and shortcomings of the systems we have, what is the new model we’re proposing that people can believe in? No one is proposing a credible, compelling alternative. Finding that new model is, I think, one of the big challenges we have in the world today, and is what I see this Initiative trying to address."

What would success for the Huth Initiative look like to you?

"In my career in private equity, I developed a practical, solution-driven approach, and I am looking at this almost as a venture capital-type initiative – my main hope is that we can provide a framework for something to be developed, set the conditions so that the right people can come in and take the time needed without some of the other pressures of teaching and publishing to really think through these problems and develop something that can lead to a solution.

"That’s an approach that I’ve seen work quite well in the venture industry, and it’s what we’re trying to do with the Huth Initiative as well. You never know if it will be successful or not, but any other approach would be too deterministic. Instead, we’re looking at one big, complex and important problem and trying to create the conditions from which a solution will emerge.

"If we can generate some new approaches or solutions to some of these challenges, I think that would be a great success, and hopefully this Initiative also lays the foundation for something bigger and more permanent at LSE. And for that to happen, others who see the same problems and feel the same urgency about solving them will need to join us in building on this foundation and pushing this work forward."

Why is LSE the right place for the Huth Initiative for a New Political Economy?

"In a way, choosing LSE for this initiative was easy for me because I’ve been involved with the School my entire career and I know it very well.

"I’ve had many conversations with LSE President and Vice Chancellor, Professor Larry Kramer, where we’ve discussed these issues, and when having one of these conversations over dinner with Larry and Tim (Professor Sir Tim Besley), Tim framed some of these same questions in a way that immediately spoke to me.

"LSE is the top place for social sciences in Europe and among the best in the world. And because we’re focused on the social sciences, I think we are better placed than any other institution to drive forward a solution grounded in sound social science. And the School has always had good, productive relationships with both government and the City, which should help ensure that what we’re doing through this Initiative has lasting applications in the real world.

"There’s just no better place for this work to happen right now, especially considering the convening power that LSE has and its ability to attract world-class talent to dedicate itself to the problem. I think that’s a powerful combination."

About the Huth Initiative for a New Political Economy

• The Huth Initiative is led by Professor Sir Tim Besley and Dr Daniel Chandler, and it will bring together experts from economics, politics, and philosophy to reimagine the relationship between markets, government and society.
• The Initiative will develop world-leading research and practical ideas for fairer, more sustainable prosperity.
• A dedicated Policy Hub, led by Professor Richard Davies, will ensure research directly informs decision-making in government, business, and civil society.
• Equally central is a commitment to training the next generation of outstanding researchers, ensuring the Initiative’s impact endures for decades to come.
• One year on from receiving the 2025 Nobel Memorial Prize in Economic Sciences, Philippe Aghion joins us at LSE to mark the official launch of the Huth Initiative for a New Political Economy. Sign up for the launch event.