Economics is not pick and mix

Given the high-profile debate in the Financial Times and elsewhere about the future of capitalism, it is worth remembering that economics is not like a pick and mix stand.

It makes no sense to simply choose one model of capitalism over another. Drop America, say, and take up Sweden.

Any discussion of the future of capitalism should be preceded by an investigation of the character of the system as it exists.

Yet there is remarkably little debate about the nature of the real economy in contemporary capitalism. The discussion of economic models is an evasion of this vital task. Instead there are endless discussions on the financial markets and heaps of cheap moral fables about greedy bankers.

It is also worth remembering what happened the last time there was a heated debate about models of capitalism. In the late 1980s, a broad consensus emerged that the Japanese model was preferable to the American one. At the time, the Japanese economy was growing relatively fast and America was suffering economic problems. Yet just as the intellectual argument for the Japanese model was widely accepted, the country was hit by the bursting of its “bubble economy”. Nearly two decades later it is still suffering from painfully sluggish growth.

Pick and mix should be left to go the same way as Woolworths.