Many authors have written about the failure of economic theory but best-selling financial author, George Cooper, has come up with an original solution on how to fix both economic theory and the economies of the world. He has done this by taking the key ideas from the greatest scientific revolutions in history to re-imagine how our economies really work in the first place.
By illustrating how both our economic theories and our economic policies can be fixed, Cooper is setting out to present a simple idea that has the power to revolutionise how we think about our economies and how our governments set their policies – he calls the idea the circulatory growth model in his new book Money, Blood and Revolution.
The circulatory growth model recognises that capitalism has a tendency towards wealth and income polarisation and explains how this problem can be addressed. For example the model makes it immediately obvious how policies designed to promote borrowing lead directly to lower economic growth, higher income inequality and, in the end, to higher government deficits.
Cooper takes his readers on a journey through the history and philosophy of scientific progress. He compares the confused state of economics today to the confusion which dogged astronomy, medicine, biology and geology prior to their respective revolutions. In doing this he builds a persuasive case that economics is long overdue its very own scientific revolution.
The circulatory growth model has some surprising implications. It shows, for example, why some countries have prospered while others have failed. It also shows why government spending and taxation are necessary for economic growth.
These conclusions fly in the face of today’s accepted mainstream economic ideas, which press always for smaller governments and lower taxation.