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 the faults of theory and policy that led to the crisis were integral elements within a broader set of simplistic beliefs about the objectives and means of economic activity that dominated policy thinking for several decades. This dominant discourse cast economic growth as the objective, markets as the universally applicable means of achieving it, and inequality as inevitable and necessary. Turner takes on these assumptions point by point, arguing 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, and that these conclusions have broad implications for the case for economic freedom, for specific areas of public policy (including financial regulation and climate change), and for the discipline of economics itself.
About the Author
Adair Turner was appointed Chairman of Britain’s Financial Services Authority in September 2008. A Visiting Professor at the London School of Economics and at Cass Business School, London, he is the author of Just Capital: The Liberal Economy.
“Adair Turner is the jewel in the crown of British public servants. He is one of a tiny minority in public life today capable of thinking and acting at the highest level. Economics After the Crisis, based on three lectures he delivered at the London School of Economics in 2010, is a thinking person's delight, not least for the clear and lucid way in which Turner sets out his arguments.” — Robert Skidelsky, The Times Literary Supplement
“...With this book, Turner has proved that Britain still produces thinkers who combine ideas with practical experience.”—New Statesman
"A well-researched and profound rethink of macroeconomic and financial policy after the crisis. Lord Adair Turner not only challenges the consensus on short-term tactical approaches to regulation and macroeconomic management, but he forces the reader to think more deeply about the long term goals of policy, including unfettered growth and the role of the free market."
Kenneth Rogoff, Harvard University
"Adair Turner insists that economics should analyze the world as it actually is and human beings as they actually are and avoid taking its simplifying assumptions too literally. In this short volume he sketches the elements of such an analysis and shows how they can be applied to policy problems of the day, from financial regulation and population growth to climate change and income inequality. No one who worries about the future of the economyand the planetwill fail to be provoked."
Barry Eichengreen, George C. Pardee and Helen N. Pardee Professor of Economics and Political Science, University of California, Berkeley