Robert Peston has released a publication entitled ‘The New Capitalism’, outlining his thoughts on why the crisis happened and what our post-recession economy will look like. Just like most of the BBC’s economic coverage this takes a very skewed view upon events.
Peston's claims that “Capitalism is changing in fundamental ways", even going so far as to suggest that it might be a change with more impact than the end of Communism! He states that, "For many years to come, what's happening will affect the relationship between business and government…" Quite. We will witness a greater distortion of capitalism in the form of further regulation, taxation and government debt. Naturally, the relationship between government and business will change, within the financial sector, but almost certainly not for the better.
The publication also claims that trade between ourselves and growing economies such as China exacerbated the problems:
“They were working to improve our living standards, because they made more and more of the stuff we wanted at cheaper and cheaper prices."
Although it is true that imports from China and other Asian economies grew, Peston has forgotten the fundamentals of trade. When trade occurs there is mutual benefit – the Chinese were not producing and exporting goods for only our benefit but also for theirs. The view that China’s only role in the past decades has been to work as a factory, churning out home comforts for the west, is naïve, archaic and dangerous.
It is fair to say that there is currently a lack of confidence in capitalism, the consensus within the media is that we need to boost regulation and control our industries to a greater extent. But during the boom years I can’t remember Peston, jumping off the bandwagon, telling us to slow down and warning us of the danger ahead.