Chicago School economics 'a disaster and a disgrace', says leading analyst | you bet it is

I’m reading the Guardian again and today and I ended up on the business pages. I never used to read the business pages, because I thought they were all about which companies had bought which other companies and how much each currency is fluctuating against each other - and there is a lot of that – but there is also some very interesting stuff that crosses the line into politics.

This article, about Chicago School economics, I read today for example is the sort of thing that gives a real insight into what politicians of the Tory and Republican parties (boo, hiss) are thinking. The article is a short summary of some of the ideas of an economist called Roger Bootle.

"A year ago we came perilously close to utter catastrophe," Roger Bootle says. "But the neoliberal, free-market people are already on the warpath. They remind me of some mythical creature – cut off one head and it sprouts more."

Of course this Roger Bootle guy has a new book out and that’s why he’s in the paper, but it does seem to me that he really cares about the economy – and if you ask me the economy is part of society, not something outside it. It is something we have to try to understand and get right, and not just on a national scale, but internationally.

People talk about economies under a few different overarching headings, such as feudal, communist, barter and capitalist, but I don’t think they are particularly helpful. Animals can be talked about under the same overarching headings, such as mammal, fish, marsupial and arachnid, but a whale is a mammal that swims in the sea and a mudskipper is a fish that walks on the land.

In the same way a capitalist economy can develop to be very centrally controlled and limit the availability of wealth, and a communist economy can develop towards the free movement of wealth, ideas and people. In this way it is the direction the economy is moving in that defines it, and gives a clue about whether it is a positive influence on society and people’s overall happiness or not.

I spend most of my time in the UK and Austria, two very similar economies – mostly capitalist, but with healthy doses of socialism thrown in – and there are a lot of good things about these economies, but they are not perfect, and more worrying they seem to be developing in the wrong direction. The movement of wealth, ideas and people is slowing. Wealth is becoming less evenly distributed (the even distribution of wealth is the key) and peoples happiness is plummeting.

I also read – in the Guardian of course – about similar negative stuff happening across the rest of the world, and the suggestion at the end of the article about going towards a single world currency seems to be one tiny piece in the puzzle of getting the world economy right.

>you can read about the beautiful Dragonbat with his nose in the paper illustration and how it was done at Starbright Illustrations.