My book, Mammon’s Kingdom, was born of incredulity. The global financial and economic crisis of 2008 was the second most devastating in the long history of capitalism. Only the crisis that began with the Wall Street crash of 1929 and culminated in the Great Depression of the 1930s did more damage to output, employment and welfare.
And, just as the crisis of the 1930s made nonsense of the economic orthodoxy of the previous half century, the crisis of 2008 and its aftermath tore gaping holes in the intellectual system that had underpinned the assumptions of central bankers, ratings agencies, business schools and professional economists for a generation, and had shaped the policies of international economic institutions such as the World Trade Organisation and the International Monetary Fund.
On a deeper level, the crisis exploded the dogmas spawned by that system: that government intervention in the economy does more harm than good, that markets should therefore be left to regulate themselves, that rewards reflect productivity, that, since ‘a rising tide lifts all boats’, the forces that make the super-rich richer also benefit the poor, that the information available to buyers and sellers in the market place is symmetrical, that the choices made by unfettered economic agents are rational and that the booms and busts which had been capitalism’s most obvious hallmark for centuries were no more.