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Economics After the Crisis

Economics After the Crisis: Objectives and Means

Adair Turner
Copyright Date: 2012
Published by: MIT Press
Pages: 128
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  • Book Info
    Economics After the Crisis
    Book Description:

    The global economic crisis of 2008--2009 seemed a crisis not just of economic performance but also of the system's underlying political ideology and economic theory. But a second Great Depression was averted, and the radical shift to New Deal-like economic policies predicted by some never took place. Perhaps the correct response to the crisis is simply careful management of the macroeconomic challenges as we recover, combined with reform of financial regulation to prevent a recurrence. In Economics After the Crisis, Adair Turner offers a strong counterargument to this somewhat complacent view. The crisis of 2008--2009, he writes, should prompt a wide set of challenges to economic and political assumptions and to economic theory. Turner argues that more rapid growth should not be the overriding objective for rich developed countries, that inequality should concern us, that the pre-crisis confidence in financial markets as the means of pursuing objectives was profoundly misplaced.

    eISBN: 978-0-262-30175-6
    Subjects: Economics, Finance

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Foreword
    (pp. vii-viii)
    Richard Layard

    Adair Turner is one of the most talented Britons of his generation. He is both an intellectual and a policy maker, and he has little time for those policy makers who are, as Keynes put it, simply “slaves of some defunct economist.” In this book, based on his memorable 2010 Lionel Robbins Memorial Lectures, his purpose is no less than the rewriting of economics in the light of the current economic crisis.

    The first issue is the goal of the economic system. Turner rejects the aim of maximizing the present value of the GDP. Instead he argues that much more...

  4. Introduction
    (pp. ix-xiv)

    The capitalist system has suffered a great crisis. And when the crisis intensified dramatically in the autumn of 2008, many commentators emphasized its wide-ranging nature. The prospects for the economy were discussed in apocalyptic terms—a new Great Depression threatened. But there was also talk of a crisis in political legitimacy and a likely paradigm shift in political economy: an end to the era of unfettered, finance-driven Anglo-Saxon capitalism, and an end to the era of greed. Many thought that a shift to left-wing politics and to more redistribution was likely, and that new ideas and policies as radical as...

  5. 1 Economic Growth, Human Welfare, and Inequality
    (pp. 1-34)

    Let us begin with the objectives of economic activity and policy.

    In the second half of the twentieth century, the idea became increasingly dominant that attaining a superior growth rate and thus increased prosperity should be the central objective of public policy.

    Other issues—culture, morals, religion, national identity—were not entirely absent, but, in contrast with nineteenth-century or early-twentieth-century politics, the main electoral battleground was often the issue of which political party would best deliver material prosperity. Harold Macmillan’s election campaign in 1959 was built on the assertion “We’ve never had it so good.” In the 1960s, Harold Wilson’s...

  6. 2 Financial Markets: Efficiency, Stability, and Income Distribution
    (pp. 35-66)

    In the first chapter, I considered the objectives of economic policy. In this chapter, I will turn to the issue of means, and in particular the role of markets.

    Suppose that increasing per capita GDP is a sensible objective—and not just for middle-income and low-income countries, but also for high-income countries. How confident can we be that free markets are the way to deliver such growth? In particular, how important is financial-market liberalization, and what other consequences, good or ill, might free financial markets bring with them?

    The proposition that markets drive economic efficiency is central to much of...

  7. 3 Economic Freedom, Public Policy, and the Discipline of Economics
    (pp. 67-96)

    I began chapter 1 by describing the dominant political and economic conventional wisdoms of the last 30 years, which together provided an instrumental justification of free markets: the idea that free markets and strong market incentives to economic efficiency are good because they will make societies richer on average, the idea that getting richer is by definition good for human welfare, and the idea that, in turn, inequality is a by-product of a dynamic free market, justified because and to the extent that free markets with substantial inequality generate faster growth.

    But in fact, as was set out in chapter...

  8. Notes
    (pp. 97-106)
  9. Index
    (pp. 107-108)