Socialism is, essentially, the tendency inherent in an industrial civilization to transcend the self-regulating market by consciously subordinating it to democratic society.
The key to tackling the problem identified by Adair Turner – the weakness of global nominal demand – is therefore expenditure, specifically, public expenditure that can be undertaken quickly: on the upkeep of roads and railways, on flood defences, on water conservation, on horticulture, and so on…
When the Fed offered to buy a large number of securities held by banks, both mortgage-backed securities and government bonds, bankers exchanged these bonds – some of which were likely to be non-performing and therefore loss-making – for the equivalent of a bigger ‘overdraft’. This ought to have cle…
Equally, its scarcity means that, unlike the endless and myriad social and economic relationships created by credit, the capacity of bitcoin to generate economic activity is limited (to 21 million coins). The currency’s architects deliberately limited the amount of bitcoins in order ostensibly to p…
And if, during a boom, the demand for loans expands beyond the capacity of the economy – in other words, clients apply for and bankers create too much credit, which is then used to chase too few goods, services and speculative assets – the money supply expands. In this case, excessive borrowing a…
