by George Soros
Little, Brown, pounds 17.99, 244pp
by Edward Luttwak
Weidenfeld & Nicolson, pounds 20, 290pp
by Susan Strange
Manchester University Press
pounds 13.99, 212pp
The Ownership Solution
by Jeff Gates
Allen Lane/ Penguin Press,
pounds 20, 389pp
John Maynard Keynes denounced politicians in thrall to defunct economic ideologies. For the past quarter century, the world has been told that if only democracy and society - with their elected representatives - would stand aside, then the self-correcting forces of the unregulated market would solve the world's problems.
Market fundamentalism has now become another defunct ideology. We have come to the end of what historians will call the Chicago-Pinochet era. And panic is setting in. A third of the world is in recession. Massive amounts of tax-payers' money has to be handed to banks in order to prevent collapse. Inequalities are increasing. No city is free of beggars; and 150 years after legislation stopped little boys going up chimneys, we have 1.9 million children in waged labour in Britain. Worldwide, the number of child labourers has doubled to 250 million in a decade. Dickens and Zola would feel at home.
Naming and blaming abounds. Continental socialists denounce America. The English right hates Europe. Asianists who once proclaimed that the future lay in the east (and they ranged from far-right John Redwood to soft-Marxist Martin Jacques) have gone strangely quiet. They are praying that no one digs up the cuttings in which they prostrated themselves before Malaysia's Dr Mahathir or Indonesia's General Suharto.
So, as PEP statements flood through letter boxes to show a decline in the value of our savings, the time has come to listen to those economic pundits connected with reality. No one has had a stronger connection with financial reality than arch-speculator George Soros. He has rushed out his book on global capitalism a few weeks after the Russian devaluation - in which he lost millions - convinced him that he had a message for the world.
As he makes clear in this fascinating work, the bottom line is that Soros got out early from investment in firms which no longer produced adequate returns. Thus he made his money. And thus the abandoned firms and their communities lost access to the capital that fuels hope and growth.
Soros writes that "the development of a global economy has not been matched by a development of a global society". We can all agree with that. But what is the speculator-philanthropist's answer? He spends 200 pages defining the problem without admitting that he and other speculators formed part of it. He provides no solution, save a more democratic UN and help from foundations like his own to set up after-school classes in poor areas.
Edward Luttwak is even more apocalyptic than Soros. He sees populism and fascism as the likely response to global economic instability. His winner-takes-all model of "turbo-capitalism" has shut down its after-burners, and in too many countries looks more like a Lada than a Ferrari. "Turbo- capitalism too, shall pass," he writes. Agreed. But what comes in its place?
Luttwak again offers no answer, but Susan Strange shows that serious economic thinkers can swim against the stream. The late Susan Strange's compassion and concern for the poor provided an ethical dimension to her economics, absent from too many recent discussions. She had every right to say"I told you so", since she coined the phrase "Casino Capitalism" - the title of her 1986 book. Her last work, Mad Money, is a reprise of its argument, but with an old-fashioned catastrophe thesis at the core. This argues that it all has to get a lot worse before it gets any better.
Strange has half a point. The supreme task of policy makers today is to avoid a descent into the barbarism of the 15 years between the Great Crash and the arrival of Keynes at Bretton Woods in 1944. Yet public opinion is not yet sufficiently alarmed to provide political leaders with the pressure to impose reforms like those that Keynes and RooseveIt's New Deal economists drew up for the post-1945 economy.
Susan Strange writes warmly of the postwar Marshall Plan. But the point about that plan was not just the generous dollar credits offered by the US. If governments wanted Marshall Aid, they had to respect democracy, draw up productivity plans, and order managers to negotiate with employees.
Equally important, they had to develop welfare programmes so that the fear of the future brought by individualised provision of health, education and old-age care was removed. The plan amounted to direct interference in national sovereignty to make a connection between market growth and democracy; between a social policy aimed at reducing inequalities and the rooting-in of stable capitalist institutions.
The past decade has seen Soros and his comrades in Wall Street, the City and European bourses showering money on corrupt, arms-hungry, police states without ever asking in return for any respect for social rights, a free media, an independent judiciary, or balanced domestic growth. If the world economy is to be set right again, it must connect money with democracy. Growth will have to provide more equal shares, via a world trading system that respects human beings as well as PEP profitability.
But if it all gets worse, it will simply get worse. A retreat to protectionism, to the kind of anti-European isolationism advocated by William Hague, will simply produce a nastier, meaner, more authoritarian politics.
Yet there is a better way. Jeff Gates - neither financier, nor professor, nor journalist - has written the best book on economics for a generation in The Ownership Solution. This is a running commentary on where modern economics has gone wrong. His fluent book is full of insight and description, assembled in an accessible and readable manner. And Gates has a policy prescription: massively to expand ownership of the economy by turning millions of employees into stakeholders in their own firms.
The clumsy acronym ESOP (Employee Share Ownership Plan) does no justice to a new form of ownership that goes far beyond either the state ownership of classic socialism or the Anglo-Saxon model of ownership by pension, saving and insurance funds. ESOPs in the US cover more than 9 million workers in more than 10,000 firms. Jeff Gates served as a counsel for the US Senate Finance Committee, which developed ESOP legislation in the 1980s, and his book is a huge how-to-do-it compendium covering all aspects of the legal, fiscal and ethical complexities of changing company ownership.
In Britain, we are stuck with quill pen-and-ink company legislation largely unchanged since 1857. Our one-club model of ownership - the plc - stifles innovation and entrepreneurship. To change that requires changes in what we mean by ownership, so that more people will have a sense that they belong in the economy and can benefit from its activity.
Can Britain take a lead to encourage new forms of ownership based around employee stakeholding? This could be the third-way model for the next century. It would help to restore the equilibrium that, as George Soros has finally understood, is desperately missing from the modem economy.
Denis MacShane is Labour MP for Rotherham