This will have the naysayers clucking.
We were told that the markets were self-regulating and that the role of government was to get out of the way. It turned out that the opposite was true, and that the economic system was only kept going at all by the constant drip-feed of government-initiated QE.
We were told that the dynamics of capitalism would self-generate the levels of demand to keep the system constantly expanding. It turned out that growth was only achieved, if at all, by stacking up debt to prodigious levels, opening the way to the next financial crisis when the debt bubble imploded.
We were told that giving a free hand to investors would ensure the maximum efficiency in the allocation of capital. What actually happened is that capital flocked to emerging markets which offered the best return, then flowed out again equally fast as soon as Western financial conditions improved, leaving emerging markets badly weakened and exporting deflation to the West.
Perhaps Jeremy Corbyn’s greatest contribution is that he is not accepting the status quo which is rotten: an over-sized financial sector, a neglected manufacturing industry, inadequate investment, flat productivity, huge and growing balance of payments deficits, ballooning inequality, and an economy mired in enormous permanent debt. He deserves credit for arguing that the fundamentals have got to be changed; it’s a debate we desperately need.
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