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Postmodern spaghetti, the new Russia and a lesson in policing

By Prospect   October 2011

We wasted a good crisis

John Kay (September cover story) is disingenuous about the origins of the financial crisis. He notes the emergence of the derivatives market in the 1970s and deplores banking’s “trading culture.” Yet neither was greatly implicated in the problems of 2007-08. And he is wrong to characterise the advocates of free markets as indifferent to their cultural underpinnings. The founder of free market economics, Adam Smith, wrote one of his two major books, The Theory of Moral Sentiments, about little else.

Kay is also unreliable about risk, which banks do no more than shift around. No…

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