My respect for Sir Simon Jenkins is on record, and holds good.  And his piece in today’s Guardian is unimpeachable in every respect bar one.

Says Jenkins:

It was regulation that failed last month, not the market economy.

To quote him back at himself:

It is rubbish, total rubbish.

Indeed it is also entirely contradictory, because Jenkins’ immediately preceding sentence says:

All markets required regulating.

Well, fuck me, man: you can’t have it both ways.

Sir Simon is entirely right to point out that, notwithstanding recent events:

The banks have not been “nationalised”, just deluged with money. They remain pluralist and competitive institutions, with independent boards. Their workers are not civil servants. Investors retain their shares. The bonus culture will revive. The impresarios of greed have been punished, or at least a few of them. But this is not socialism in our time, just public money hurled at the face of capitalism.
[...] Though bankers are more fun to blame, it was politicians whose laxity and craving for popularity lay at the root of the present trouble. They should at least be denied any triumph for aiding its cure.

This is exactly what I was trying, and failing, to say yesterday: the economic crisis is at least as much the responsibility of politicians and regulators as it is the bankers.

Jenkins is wrong, however, to claim that what has happened is not a failure of market economics.  If you recognise that all markets require regulation, then you have to accept that pure market economics is an imperfect theory that has failed.

Unfettered market economics simply does not work.  Like communism, it is a beautiful theory impossible to execute in reality.

If market theory is so fucking brilliant, why do we not still have 8-year-olds up chimneys and 11-year-olds down pits?  Why does every democracy have state-funded health and education systems of some kind?

If the only thing that matters is the pursuit of profit – and that, Sir Simon, should be just as obvious to “every student of economics” as being the founding principle of capitalism – then market economy ideologists cannot pick and choose how and when to pursue that profit.  If it’s cheaper to employ a 10-year-old in a sweatshop than to pay an adult a living wage, then tough: so be it.  That’s what the market dictates, folks!

If unfettered market economics even remotely worked, we would live in a very different world – even more avaricious, greedy, violent and uncaring than ours, if that’s possible to imagine.

Free market economists and their advocates cannot wash their hands of this disastrous mess any cleaner than Arrivederci Gordon and Captain Darling can.

The Ministry does not operate a “no blame culture”.  There is blame here and it should be apportioned equally to the reckless (the bankers) and the feckless (the politicians).  Neither should be let off the hook.