‘Depressions can be seen as what happens when inequality gets out of hand in a market system. At one end of the scale there is a growth in poverty, which in turn leads to high debt as people struggle to maintain their living standards. They either borrow or consume less. At the other end inequality encourages bouts of wild speculation as the rich find themselves with piles of spare cash. Speculation leads to bubbles, and bubbles lead to crashes...’
That was Larry Elliott and Dan Atkinson in their classic (if slightly neglected) book, The Age of Insecurity, back in 1998.
At the time, of course, they were wildly out-of-step with the times – off-message, as it was then known. Certainly no one in the triumphalist Blairite camp wanted to hear their warning that New Labour was ultimately headed for disaster, and that it was a mistake to abandon time-honoured social democratic values of egalitarianism in favour of the fantasy of the free market.
For ten years the Cassandra warnings have continued to pour forth. And, like Cassandra, it turns out that Elliott and Atkinson were right all along. Their devastating summary of the Blair years, Fantasy Island, came out in Spring 2007 and rained all over Gordon Brown’s parade just as the band was striking up.
Their most recent book, The Gods That Failed, dissects the roots of the current crisis. Its sales figures suggest that maybe people are listening: ‘Markets are not Magic. Debt is not Freedom.’
Whether the Labour Party has the courage to return to its egalitarian traditions is another matter.