Is the Free Market Finished?

homeless people contrasted with empty homes

Historian Michael Brenner wrote a review in the 1990’s of the impacts of Neo-Liberal Free Market economics

What were Brenner's key assertions?

  1. The last 20 years or so, that is the period over which free-market economics has dominated, has seen a quantum rise in inequality - between rich and poor nations and between individuals within some countries
  2. Neo-liberal, free-market economics has not created better economic performance in those countries practicing it.
  3. Corporate performance has been dire, but companies have worked to keep profitability and dividends high by exploiting employees and limiting investment
  4. Poor underlying performance has been masked by 'bubblenomics' - creating cheap credit, encouraging burgeoning debt and borrowing against inflated asset prices in such as housing. Large parts of the population are exposed to the risk of ruin if they cannot repay their debt, a situation that could easily arise if, for example, house prices dipped significantly.
  5. Corporations have not contributed to growth because they have not increased the asset stock by investing
  6. Governments, following free-market principles, have delegated investment, borrowing and debt management to global banks, which are hardly regulated at all. This has created an orgy of unsecured lending, plus greatly increased instability in the world economy, as the amount of risk buried in the banking system is completely unknown.

His Warnings were ignored, and the Banking crash of 2007/8 nearly ruined the world economy. Only a massive governmental intervention led by UK Premier Gordon Brown saves the day.

Now in 2022, it seems that the crushing effects of Free Market economics are causing a massive recession in economies across the world.

Surely, politicians and economists must realise that the reign of Free Market economics is over and we can move on to an era in which Governments and the Markets can work in harmony and new ideas, such as those of Social Enterprise* can be introduced:

Societies need to be underpinned by a fresh range of Fundamental Principles:

*Social Enterprise is simply the idea and practice of introducing the good of society and the community into the way that enterprises are financed and invested in – rather than the current primacy of financial investors. There are excellent examples of Social Enterprises in the Scandinavian countries and at local levels in the UK

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