Who is to blame for bank debt billions?

Mon, Mar 18, 2013, 06:00

Sir, – Padraic Neary (March 13th) attributes the world financial crisis to radical change in the “world economic conditions”; a change from “inability to ever produce enough” to the “potential to produce everything to gross surplus”. For whom?

Economic systems are social institutions designed/evolved by human beings. Their aim is to produce and distribute goods and services efficiently and fairly. Each of these two aims has a moral implication, but perhaps the second, (distribution) more saliently.

Our current predominant economic model, free market capitalism, is moderately successful by the first of these aims – production. It demonstrably fails in the second aim – distribution. This failure is evident both in world and domestic contexts. When Bob Geldof was trying to feed children dying of starvation in north east Africa, I could buy raspberries, from there, in Covent Garden. In a domestic context, the gap between rich and poor in wealth, (their access to goods and services), has grown ever wider, in Britain, the US, Ireland and even in the emerging economies – India, Brazil, China.

The unfortunate paradox is that the human motive powering the production of goods and services (acquisitiveness/profit) is psychologically almost identical to the motive powering the acquisition of personal wealth and the widening of the gap between rich and poor, and the resultant failure to distribute fairly.

Thomas Kuhn, some years ago, described the structure of scientific revolutions in terms of “paradigm shift”, a change in the theoretical model. Perhaps we should look for a new model. – Yours, etc,


Grove Avenue,