The financial crisis that started in 2007 shrunk the world economy by 6% in two years, doubling unemployment. Its proximate cause was predatory bank lending, so people are naturally angry and want heads and bonuses to roll – a sentiment captured by the current worldwide protests against “Wall Street.” The banks, however, are not just … Continue reading Recovery before Reform
Author: Robert Skidelsky
Economist and member of the House of Lords
Coordination vs Disintegration
Since its collapse in the autumn of 2008, the world economy has gone through three phases: a year or more of rapid decline; a bounce back in 2009-2010, which nevertheless did not amount to a full recovery; and a second, though so far much shallower, downturn this year. The resulting damage over the past four … Continue reading Coordination vs Disintegration
The Price of Civilization by Jeffrey Sachs
This is the latest in a spate of books provoked by the world economic crisis and one of the best. Jeffrey Sachs calls himself a "clinical economist". In The End of Poverty he applied his clinician's skills to the distempers of Africa; in this book he turns them to the hubristic and wasteful habits of … Continue reading The Price of Civilization by Jeffrey Sachs
Back from the Brink by Alistair Darling
Alistair Darling's story of his time as Gordon Brown's Chancellor of the Exchequer is intriguingly titled Back from the Brink. There are many brinks in this book - the near-collapse of the British banking system and the world economy, for one. The relationship between Mervyn King, governor of the Bank of England, and Callum McCarthy, … Continue reading Back from the Brink by Alistair Darling
The Consequences of Angela Merkel
Germany has been leading the opposition in the European Union to any write-down of troubled eurozone members’ sovereign debt. Instead, it has agreed to establish bailout mechanisms such as the European Financial Stability Facility and the European Financial Stabilization Mechanism, which can lend up to €500 billion ($680 billion) combined, with the International Monetary Fund … Continue reading The Consequences of Angela Merkel
The Keynes-Hayek Rematch
The Austrian economist Friedrich von Hayek, who died in 1992 at the age of 93, once remarked that to have the last word requires only outliving your opponents. His great good fortune was to outlive Keynes by almost 50 years, and thus to claim a posthumous victory over a rival who had savaged him intellectually … Continue reading The Keynes-Hayek Rematch
The Battle of the Bonds
Everyone knows that Greece will default on its external debt. The only question concerns the best way to arrange it so that no one really understands that Greece is actually defaulting. On this topic, there is no shortage of expert plans – among them bond buy-backs, bond swaps, and the creation of Eurobonds, a European … Continue reading The Battle of the Bonds
Free Speech under Siege
Recently, at a literary festival in Britain, I found myself on a panel discussing free speech. For liberals, free speech is a key index of freedom. Democracies stand for free speech; dictatorships suppress it. When we in the West look outward, this remains our view. We condemn governments that silence, imprison, and even kill writers … Continue reading Free Speech under Siege
Lumpy Labour
As the world recovers from the Great Recession, it has become increasingly difficult to discern the true trend of events. On the one hand, we measure recovery by our success in regaining pre-recession levels of growth, output, and employment. On the other hand, there is a disquieting sense that today’s “new normal” may be slower … Continue reading Lumpy Labour
Democracy or Finance?
“Shorting” is a tactic well known among the financial cognoscenti. It means betting against an asset with borrowed money in the expectation of making a profit when its value goes down. A speculator can “short” a government by borrowing its debt at its current price, in the hope of selling it later at a lower … Continue reading Democracy or Finance?
Robert Skidelsky 