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21Mar

Value(s) by Mark Carney review – call for a new kind of economics

This weighty assault on the modern free market by the former governor of the Bank of England is a landmark achievement

If 25 years ago anyone had suggested that one of the world’s most prominent ex-central bankers would launch an intellectual broadside at free market fundamentalism for shredding the values on which good societies and functioning markets are based, I would have been amazed. If, in addition, it was suggested he would go on to argue that stakeholder capitalism, socially motivated investing and business putting purpose before profit were the best ways to put matters right, I would have considered it a fairy story. Although writing in this vein in the mid-1990s made my book The State We’re In one of the past century’s political bestsellers, the newly elected Labour government was terrified of going near most of it for fear of being cast as anti-business and interventionist. Now Mark Carney, governor of the Bank of England until this time last year, has turned his hand to driving ideas once considered eccentric into the mainstream.

In a mix of rich analysis mixed with pages that read like a dry Bank of England minute, he blames the three great crises of our times – the financial crash, the pandemic and the climate emergency (he is the UN’s special envoy on climate action and finance) – on twisted economics, an accompanying amoral culture, and degraded institutions whose lack of accountability and integrity accelerate the system’s dysfunction. Thus banks lost control of reality in a fantasy world in which balance sheets could grow exponentially without risk – another market would handle that – indulged by governments and regulators who believed that markets were always right. Then came the Covid pandemic, for which western governments were singularly unready, relying on dubious cost-benefit analysis rather than valuing what we as humans tend to – our lives and looking out for one another. The same mistake is being made with climate change.

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