The Gods that Failed
How blind faith in markets has cost us our future
Larry Elliot and Dan Atkinson
London: The Bodley Head, 2008, p/b, £12.99
This is E and A’s third book together. It was published just before the previous, June issue of Lobster.(1) Their first book, The Age of Insecurity (reviewed in Lobster 35) was a careful, detailed demolition of the delusions of the free marketeers, their loose talk of globalisation and a ‘new world order’; and the mistakes being made by nominally left-wing parties in adopting the free market nonsense. In 1998, when this appeared, the authors’ advocacy of a return to Keynes, the mixed economy and tight control of the financial sector, was going utterly against the mainstream grain – which may explain why the book was widely ignored.
Their second, Fantasy Island (reviewed in Lobster 54) had a narrower focus. I noted:
‘This is a prolonged Bronx cheer and a sneer of contempt at NuLab and all its works ….. E and A have written a full-on demolition of NuLab’s economic and, to a lesser extent, social policies.’
In this, their third, they combine bits of the approaches of both their earlier books: NuLab’s economic policies are again treated with scathing contempt. For example they write on page 9:
‘Instead of taking on the City, the government has turned its attention to the workforce – both blue-collar and white-collar – which has to be made ready for the global challenge from China and India by being re-skilled and re-educated and by learning how to be “entrepreneurial”. While this makes for fine speeches, it represents displacement activity on a grand scale.’
And they give us a detailed analysis of the economic catastrophe which they have watched coming down the line for years.
If the current crisis (I began writing this in late September as the last of the former mutual building societies self-destructed in Britain after enriching its senior management) is unclear to you, this book will explain it; from the broad historical sweep, covering the rise of the City in the 1970s, through the failure of regulation, the technical details of the financial ‘products’ which crashed the system, to accounts of the major incidents en route to the present situation.
In the final chapter there are also policy alternatives to the present shambles which are not a million miles away from the economic nationalism of the Labour left of the 1970s. Some form of economic nationalism, dressed up as ‘green’ economics or not, is the only viable alternative that I can see. But how bad will it have to become to get this kind of heretical thinking onto the mainstream political agenda of this society? Three million unemployed? Four? Cuts in social benefits and pensions? (The government is already cutting some state sector wages by paying less than inflation annual rises.)
They don’t make for cheerful reading but Elliot and Atkinson’s three books are the extant best commentary on the last decade in this country’s history.
Notes
- And not reviewed by The Guardian, for whom Elliot is economics editor, until 11 October.