False Dawn, By John Gray

Events since False Dawn was first published in 1998 would seem to bear out John Gray's thesis that global capitalism leads not to universal prosperity but to chaos. In chapters on the US, Russia, China, Japan and developing countries, Gray shows again and again that laissez-faire capitalism is the problem, not the solution. On virtually every page there is some insight that makes you think: for instance, Gray points out that America's unemployment figures look far better than they are if you factor in the US prison population of more than a million.

Gray argues trenchantly that a global free market is not a natural state of affairs, but an artificial creation. One-size-fits-all capitalism – based on the American model, of course – is a Utopian dream, a legacy of the Enlightenment project of a universal civilisation, like Soviet and Chinese communism. Like them, it's doomed to be a tragic failure.

Gray is hard on the Enlightenment, blaming its blind faith in reason for everything that's gone wrong since the 18th century. Yet the Enlightenment project was hardly without achievements, and towards the end, Gray does concede that the resources of critical rationality we have inherited from it may be of some help in solving our problems.

Is there a solution? Gray states in his newly added foreword that there may well not be. Ideally he favours, in Isaiah Berlin's words, "a reasonably peaceful coat of many colours" – a world of many varieties of capitalism, each suited to its own region. But he doesn't think this likely.

More probably, we are living in the last days of a second belle epoque, and the collapse of global capitalism will herald instability and war. As much a work of political philosophy as economics, this is a thought-provoking and bracingly pessimistic book.