What needs to be learned if we are to make matters better?

Free markets are not a solution

Market fundamentalism is fatally flawed, in that markets can never be “free” The reasons are simple:

All markets are subject to distortions. The commonest comes from the fact that human nature will mean that some people and institutions will exercise power and wealth to distort the market to their own advantage. Second, the idea of a perfect market in which all players have access to the same information and are able to make rational decisions is fatally flawed, so markets can never function in a “perfect” manner

So markets need to be regulated and controlled if they are to function effectively - and the only agency capable of doing this has to be government initiated, as government is the only institution in a democracy that should represent the public interest.

Neither is state control of the economy

Free marketeers are right - the state is not capable of managing the economy.

The collapse of the Soviet Union was a terrible lesson to all, and wholesale nationalisation of industry did not work well for Britain in the 1950's, '60's and early 70's. The fact is that politicians and civil servants are not trained to manage enterprises, and the sheer size of the task of running a myriad of different businesses is far too large to be placed under the control of distant bureaucrats.

We need to clear our minds about some fundamental issues

Collaboration by the major stakeholders in an economy.

In Britain, America and many European countries, politics has become grossly adversarial. Political parties often represent particular interests or segments of society. They are subjected to intense lobbying by narrow commercial interests. For example, banks lobby for the least state regulation, oil companies oppose “green” policies, tobacco companies try to limit anti-smoking measures. The behaviour of politicians in many countries has become akin to that of young boys in a school playground. Opposition politicians oppose, governments defend their positions and policies, and, the national interest becomes lost sight of in the fracas.

Such behaviours are irresponsible and have degraded the democratic process to the extent that electorates have become disillusioned with games that seem to revolve around self interest. Class, racial, regional and economic schisms often drive whole systems of behaviour that prevent any form of collaboration across divides. Trust in others is low and mobilisation of efforts to tackle national problems becomes difficult. Rampant inequality becomes a serious barrier to progress.

Representatives Labour, Industry, Finance, Regional and Local Government are in a perpetual state of conflict with each other - and all lobby central government to take their side. In Britain of the !970's, government ministers were prone to meet with Trade Union leaders for “beer and sandwiches” to fix deals that excluded employers. Then came the Thatcher years, and habits changed. Finance took the place of the Trade Unions, but now the relationships between rich individuals, financial institutions and politicians are the drivers. At no time have government, union, industry and finance leaders met together to tackle the economic problems that they have all had a hand in creating by consensual means. In the United States the situation is similar but maybe even worse. Most employers regard unions as the work of the devil, right wing politicians have an almost religious hatred for liberals, and Congress, The Senate and the president as the chief executive too often fail to find common ground.

But this sorry state does not have to be the norm. It takes only as modicum of intelligence to realise that tackling problems of mutual interest can best be achieved by sensible give and take,by dialogue and civilised relationships rather than angry conflict and refusal to appreciate all sides of the argument. And of course, there are countries where there is more social cohesion and trust across interest groups in the wider interest. Germany and the Scandinavian nations seem to have found better ways of behaving.

Dumping failed dogma

It should have sunk into the minds of the most dedicated zealots that free market economics has failed to deliver on the promises made by the theoreticians who devised them. Different, more diverse means are now badly needed that blend together the best that markets can deliver, together with collaborative enterprise that is aimed at delivering good outcomes for all stakeholders in society. This requires cooperation by the major stakeholders in society - government, all politicians, regional and local enterprise, finance and industry and employee representatives. .If this seems idealistic and impossible, it already happens for real to a greater or lesser degree in the social market countries of Europe and in some Asian countries - and their societies benefit in many ways.

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