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Capital Economics

The leading macroeconomic research consultancy

The Trouble with Markets

Roger Bootle - Managing Director

Saving Capitalism From Itself

“The Trouble with Markets has grown out of my burgeoning worry that the financial collapse of 2008/9, the essence of which I can claim to have foreseen, imperils not just the economy but capitalism itself. Globalisation, the root of recently low inflation and increased prosperity, is at risk. And dare I say it, democracy, the root of everything is at risk as well.”

Roger Bootle

The essential themes of “The Trouble with Markets”

  1. The Trouble with Markets is about the deep origins of the crisis, both practical and intellectual.
  2. It sets the crisis in an historical context, with fascinating material on the Great Depression and on other periods of economic downturn, such as Japan in the 1990s, and 19th century recessions.
  3. It is thoroughly international in scope with neither an American nor a British perspective. There are plenty of examples from both of these countries, but plenty from other countries as well.
  4. Although it is fiercely critical of central banks, regulators and greedy bankers for their role in the crisis, it puts the blame for what has happened not on them but on an idea – namely that financial markets can be left alone – and on the workings of the international financial system.
  5. It deals extensively with the contribution of China’s excessive saving in causing the crisis.
  6. It discusses whether the current situation will give rise to inflation or deflation.
  7. It analyses what investors should do with their money in these turbulent times.
  8. It discusses both measures to get the world out of the immediate hole and the reforms that will be necessary to keep it on the straight and narrow in the future.
  9. These are truly radical, encompassing much tighter regulation of banks, reform of corporate boardrooms and changes affecting institutional investors.
  10. It argues that people in financial services have been excessively paid for years and it proposes ways in which this can be changed. It argues that a fall in the importance of the financial services sector in GDP would be a good thing.
  11. On the international scene it proposes a new world money as part of a Grand Bargain between America and China.
  12. The Trouble with Markets is in the tradition of “Political Economy” and is written to appeal to the general reader.

Reviews

"Compelling prescriptions from an economist unusually able to speak with authority - because unlike most of his peers, Bootle spotted that the boom was unsustainable"
Robert Peston, BBC Business Editor and author of Who Runs Britain?

“In his last book, Money For Nothing, Roger Bootle predicted with great accuracy the property crash and subsequent financial crisis. In The Trouble With Markets, he offers us a way out of the almighty mess that excessive debt created. It should be made compulsory reading for all policy-makers.”
Jeff Randall, Sky News business presenter and Daily Telegraph’s editor-at-large.

“This book will stand out in the explosion of financial crisis literature. Roger Bootle is one of the top, practical economists in the financial world but he is not afraid to tackle the bigger, deeper questions around the future of capitalism, the role of markets and government.”
Vince Cable, MP, and author of The Storm: The World Economic Crisis and What it Means

“This challenging and provocative book is essential reading for every corporate executive and business owner. It poses fundamental questions about what it is that makes a market economy tick and it tackles the thorny moral aspects of the role of business in society. After you have read it, your thinking about business in society will never be the same again.”
John Connolly, Senior Partner and Chief Executive, Deloitte LLP

“Roger Bootle knows how markets work, and also when they don't work. Everyone who wants a real understanding of the strengths and weaknesses of the market economy should read this book.”
John Kay, Financial Times columnist, visiting professor at the London School of Economics and author of The Long and The Short of It

"A brilliant book that puts markets in stunning perspective. Once again, Roger Bootle tackles, head on, some of the toughest economic questions of our time. An extraordinarily penetrating and absorbing analysis."
Sir Brian Pitman, Former Chairman, Lloyds TSB Group and Senior Advisor to Morgan Stanley

“Roger Bootle’s “The Trouble with Markets: Saving Capitalism from Itself” impresses in style, substance and courage. Hope that the Lucases read and respond, the young quants listen and learn and the CEOs and risk managers comprehend and transpose. Roger’s next book ought to address how co-regulation should take shape and look like. Hope he doesn't wait too long!”
Prof. Dr. Norbert Walter, Chief Economist of Deutsche Bank Group and CEO of Deutsche Bank Research

“Roger Bootle is one of the best interpreters of modern capitalism around. This account of the crisis and what it means is as important as it is accessible. I hope his conclusions are taken on board by all those taking decisions about Britain’s future.”
Will Hutton, Executive Vice Chair, The Work Foundation