This article is from today’s FT Opinion email. Sign up to receive a daily digest of the big issues straight to your inbox.

Who is to blame for the long, slow, painful journey from the financial crash to global recovery? In this week's column, Martin Wolf argues that the discipline of economics has a lot to learn from its failures both during and after the global financial crisis a decade ago.

The profession was caught unaware and now needs to rebuild, Martin argues. It is not enough to say that the model works in normal times. We need also to understand the risks of crises and what to to do about them.

The basic Keynesian remedies — a strong fiscal and monetary response — remain right. And you can find that view confirmed by contrasting the policies pursued by the US after the crash with those followed in the UK and eurozone. “This recovery really has not been a triumph,” Martin concludes. And furthermore, fundamental macroeconomic theory suggests substantial ignorance of how our economies work, which is far from reassuring.

James Ferguson

The suburban doughnut
Sarah O’Connor argues that living costs in thriving cities worldwide are increasingly pushing ordinary, low-paid workers out into a doughnut of affordable housing. From here they commute to jobs in the centre in what has been called the “suburbanisation of poverty”. In the long run, this makes cities unlivable — even for the well-off, who need these workers nearby.

A fix to protect data
Julia Apostle writes that the Facebook data-harvesting affair should unsettle us. The answer to our current lack of control over our personal information online could be “self-sovereign identity,” where individuals control the data elements that form the basis of their digital identities, rather than centralised authorities such as governments and private companies.

Hungary’s brooding history:
From Budapest, Frederick Studemann reflects on the political atmosphere in eastern Europe. Citizens of several nations, including the Hungarians, have embraced the nativist right. At a pre-election rally for Victor Orban, Fred listens to Hungary’s prime minister spell out the contemporary relevance of a tumultuous past.

Best of the rest

Aggressive abroad, Putin plays a cautious economic game at home — Ruchir Sharma in the New York Times

China as seen from a glass house — Stephen Roach for Project Syndicate

The moment of truth for European debt — Guillaume Maujean in Les Echos (in French)

Cambridge Analytica may be guilty of hype. But data mining poisons our politics — Gaby Hinsliff in The Guardian

As if: Anthony Appiah’s ideas — Thomas Nagel in the New York Review of Books

What you’ve been saying

Unfortunate effects of Hammond’s criteria — letter from Paul Negrotti

Philip Hammond has made the criteria for loosening the purse strings contingent on the economy’s performance as assessed by the OBR. This unfortunately might have the effect of making fiscal policy pro-cyclical, where if the economy were to perform poorly and have significant slack, policy would not be stimulative, and if it were to perform well with little, policy would be expansionary.

Comment from Kassandra on After Cambridge Analytica, politicians must act to save the web

The internet is a fantastic resource. Social media is not. It was dreamed up by naive American college kids who had no sense that personal information cannot only be used for advertising. It can also be weaponized. Had they bothered to read or shown any interest in totalitarianism, they would have known. But they came of age in the early 2000’s when the march of liberal democracy and globalization seemed unstoppable. Or maybe they just didn’t care about politics. Maybe they were simply oblivious about the world around them.

Evidence does not support ‘conflict of interest’ worries — letter from Jan Bouwens

I understand that the public is cynical about whether lucrative advisory contracts can impair audit quality, and such scepticism can be healthy in professions that have a watchdog role. I also recognise the potential conflict of interest in such arrangements. However, research by leading academics over the past four decades hasn’t found actual evidence of shortcomings that would lend support for sweeping policy changes in this regard. In fact, it is found that, with the provision of advisory services, audit firms extend their knowledge base.

Today’s opinion

Economics failed us after the global crisis
Analysis of macroeconomic theory suggests substantial ignorance of how economies work

Free Lunch: We need an economics of belonging
Liberal openness must fight radicalism with radicalism

 Israel ponders a new war in the Middle East
An attack on Hizbollah could trigger an uncontrollable chain reaction

History hangs heavily over Hungary
Looming general election brings out references to past triumphs and travails

Cities only work if they accommodate rich and poor
Housing costs are forcing essential workers to live far from jobs in the centre

Fatal Uber crash shows we are poor at supervising driverless cars
The idea that automation improves safety by compensating for human error is false

 A Brexit withdrawal agreement in name only
The EU and UK have agreed to keep things just the same for a while longer

FT Alphaville: How did Cypriots respond to the 2013 banking crisis? 

 Instant Insight: Self-driving car death poses dilemma for regulators
Debate needed on benefits of autonomous vehicles if public backlash is to be avoided

Opinion today: Who’s afraid of Vladimir Putin?
The Russian president is prone to mistakes and makes calculations that often backfire

The Big Read: BlackRock bets on algorithms to beat the fund managers
Larry Fink’s firm hopes to build a ‘quant’ powerhouse through its active equities arm 

Lessons from Cambridge Analytica: one way to protect your data
Blockchain and similar technologies can help to keep digital identities safe

FT View: Xi reforms will tighten his control over China
Administrative shake-up is about centralising rather than loosening power

FT View: Four simple questions Facebook should answer
The social network has great power, but takes little responsibility

FT View

FT View: Driverless cars and the imperative of safety
Uber’s Arizona accident highlights the risks of trial runs

FT View: Brexit talks approach the limit of easy concessions
The UK prime minister must confront her party on the Irish border issue

The Big Read

The Big Read: BlackRock bets on algorithms to beat the fund managers
Larry Fink’s firm hopes to build a ‘quant’ powerhouse through its active equities arm 

Get alerts on Opinion when a new story is published

Copyright The Financial Times Limited 2021. All rights reserved.
Reuse this content (opens in new window)

Follow the topics in this article