The new chancellor will find himself in the worst starting position of anyone new in that job since the Second World War. According to the Treasury, we are just starting to limp out of the "most severe and synchronised downturn since the Great Depression in the 1930s". Recovery is not secure. With the Greek crisis as the trigger, the world monetary system is starting to disintegrate. The historically minded will recall that the international financial crisis of 1931, two years after the start of the Depression, aborted an incipient recovery and forced Britain off the gold standard. A double-dip recession is a distinct possibility today.
Once a new government is in place, the chancellor will have to face the situation as it is, not as
Book Review: The big squeeze
| Thursday, December 03, 2009
The Trouble With Markets: Saving Capitalism From Itself
by Roger Bootle
Nicholas Brealey Publishing, 282pp, £18
The Trouble With Markets, by the economist and financial analyst Roger Bootle, is the latest in a spate of books unleashed by the Great Contraction of 2007-2009. It offers a short, reliable analysis of the crisis in language that the intelligent general reader can understand. Bootle has skilfully assembled all the elements of the crisis: its causes in financial deregulation and global imbalances, the pros and cons of a monetary versus fiscal stimulus, and how to design a system that can avoid repeating such disasters.
The financial meltdown, Bootle writes, resulted from the interaction between four factors: the bubble
Essay: A thinker for our times
| Thursday, December 18, 2008
John Maynard Keynes has been restored to life. Rusty Keynesian tools – larger budget deficits, tax cuts, accelerated spending programmes and other “economic stimuli” – have been brought back into use the world over to cut off the slide into depression. And they will do the job, if not next year, the year after. But the first Keynesian revolution was not about a rescue operation. Its purpose was to explain how shipwreck might occur; in short, to provide a theoretical basis for better navigation and for steering in seas that were bound to be choppy. Yet, even while the rescue operation is going on, we need to look critically at the economic theory that takes his name.
In his great work The General Theory of Employment, In terest and
Surviving Capitalism: how we learned to live with the market and remained almost human
by Erik Ringmar
Anthem Press, 210pp, £16.99
Erik Ringmar has written a fascinating short book about the different forms of historical resistance to capitalism. Since its earliest appearance, capitalism has called forth social arrangements designed to maintain our humanity in the face of its inhumanity. Its ideal of specialisation alienates people from society and each other. Through the market, more of our lives are "commodified", crowding out non-economic values and understandings. But human beings are social animals, with a strong need for identity, companionship and a sense of worth, so they devise strategies for protecting their human substance
The End of Poverty: economic possibilities for our time
by Jeffrey Sachs; with a foreword by Bono
Allen Lane, the Penguin Press, 397pp, £20
Jeffrey Sachs has the mind of an economist but the temperament of a missionary. His thought and striving are in the service of his passion to make humans materially better off. Like most economists, he is an unconscious Marxist. He believes in the materialist interpretation of history, with institutions and culture as products of material conditions. Thus he writes: "Africa's government is poor because Africa is poor."
This book (with a foreword by his fellow evangelist Bono, the rock star) is about how to end poverty. According to World Bank estimates, there are 1.1 billion extremely poor