If capitalism is the answer then what was the question?

One of the few pleasures of the current global financial crisis has been the emergence of John Lanchester as a writer on economics. His articles on the topic in the London Review of Books are classics of clear explanatory writing; like Cobbett he uses plain English prose to get to the heart of the matter, so that the reader actually understands it.

He has now written a book Whoops! which is probably one of the best guides to the mysterious world of high finance since J K Galbraith's account of the Wall Street Crash.

His analysis of the economic and political climate in which  the crisis occurred is that with the collapse of Communism the capitalist Western countries no longer had a comparator to demonstrate to their citizens that their model delivered a better way of life. When the Berlin Wall fell the capitalist model stood supreme and unchallengeable.

If anyone dared to suggest 'there must be another  way' the West could reasonably respond; 'Show me.' John Lanchester's book shows quite clearly the consequences of allowing capitalism to go unchallenged and unregulated. He exposes the sloppy thinking behind the belief that a free market regulates itself, as well as the sheer intimidatory power that the market uses to prevent any form of regulation.

Now the West has been forced to embrace a strange sort of social capitalism and take the banks that were Too Big To Fail into various schemes of public ownership. However these act like cuckoos in the nest, greedily requiring so much for their own sustenance that they choke off almost all other forms of public activity. The business of government becomes providing a life support system for business itself, with the bank threatening to die if the system is switched off - and to take the government, and the country with it. However at some point the banks that have been Too Big To Fail are going to become Too Big To Rescue - there simply won't be any resources left to sustain them. What happens then?

What will we do if we have no money?
O true lovers, what will we do then?
O we'll hawk through the town for a hungry crown,
And we'll yodel it over again.
(Mary Delaney's song)

Matthew Edwards