Richard Freeman on what the credit crunch means
Richard Freeman is a top labour market economist – a professor at Harvard and senior fellow at the LSE – who takes a sympathetic ‘critical friend’ interest in the trade union movement. I’ve only just spotted this post from a few days ago from the US blog Today’s Workplace. Its conclusions will not surprise, but it is one of the most cogent pieces on how the credit crunch will (or at least should) change politics and economics. Here’s a long quote, but read the whole thing!
Financial screw-ups aside, the greatest problems currently facing the world are not problems that competitive markets can solve. There is no way profit-seeking firms will come together collectively to solve global warming and climate change, nor to make sure that the huge demands for natural resources from economic growth now in China and India as well as in the US and other advanced countries do not produce disaster for some countries or persons. Profit-seeking firms have no incentive to deal with the danger of some global pandemic, of protecting us from horrific terrorist biological and nuclear attack. They will not invest in the long-term basic research that might give us alternatives to non-renewable resources or the knowledge to deal with global health problems. The problems of the 21st century are public problems that require an active government and active private non-governmental groups working to resolve.