In the tentacles of vampire cephalopods

The next book I read is going to be Grigory Yavlinsky’s . On paging through, it’s apparent that the book is about the moral and social norms then permit the market economy to function well – and their breakdown as a major contributory factor to the crisis. I’m sure I’ll agree – it was a big theme of  (out soon in Italian by the way as Economia dell’abbastanza). Yavlinksy – an architect of Russia’s transition to a market economy –  ends with a call for a restoration of moral principles in politics and the implementation of public policy.

If only it were as easy as the kind of people who go into politics deciding they have to act in the public interest. That’s a good start, obviously. However, the book has just one sentence that touches on oligarchy and doesn’t mention the illegal economy at all. New estimates suggest the shadow economy ranges in size from 18% of GDP on average in the EU to 40% in Sub-Saharan Africa, 35% in the post-socialist economies. That’s £1 in every £5 or £3 respectively generated outside the law and the tax system. Activity on this huge scale must be facilitated by both the banking system and by law enforcement turning a blind eye.

And then there are the legal ‘vampire squids’, to apply  brilliant image to the still-in-denial banking industry. The world economy is ententacled by vampire cephalopods, whether operating inside or outside the law. Of course social norms must change, but I fear that won’t be enough.

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  1. Pingback: Who is responsible for the Greek debt crisis? | The Enlightened Economist

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