Just like after the crash of 2008, capitalism needs to restart

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I mention all this now because it amazes me that capitalism is, once again, seriously dysfunctional. And unless we do something about it, the crisis will recur.

The history of the past two centuries teaches us that capitalism often goes wrong – and coordinated intervention is needed to build a framework in which it can operate. During the Industrial Revolution, waves of bank failures led to the UK’s Pivotal Bank Charter Act 1844 – which established the regulatory powers of the Bank of England to tame the chaotic banking system.

Likewise, inhumane working conditions in Victorian England were countered by successive factory laws, which led to a long process of improving employee safety. Buffering half a century ahead and the Great Depression, which followed the Wall Street crash, gave rise to modern competition laws, to protect customers from exploitation by very powerful corporations.

These changes did not happen because governments wanted to replace capitalism with socialism or even communism. They were attempts to modify a system that had come to be seen as immoral, eliminating the harshest edges of capitalism to restore the broad public approval on which it was built, to ensure its very survival.

Too often, society demands new rules for shaping and framing free markets, so while driving growth and prosperity, they are not overly exploitative and chaotic. Today, here in the UK, is such a moment. British capitalism needs to be modernized, modernized and restarted – to ensure the system is fit for the post-Brexit, post-Covid and 21st century world.

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