There is a big temptation to see the coming general election as a contest between advocates of a Corbynite command economy and liberal champions of the market. The trouble with that narrative is that there are many forms of a market economy, and even ardent capitalists see that there are fundamental flaws in the prevailing system.
Currently there are two dominating business cultures: entrepreneurial and extractive. Only the former is compatible with a prosperous future for the UK. Entrepreneurial culture is about creating wealth by investing in productive assets and employing people to develop improved goods and services. Extractive business culture is very different and many commentators on both sides of the Atlantic have warned of its dangers.
One is Professor George Akerlof, winner of the Nobel prize for economics in 2001. He has said that organisations that rely on government guarantees in the event of losses have an incentive to ‘loot’, leading to a ‘topsy-turvy economics of maximising current extractable value’.
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