Anger and frustration felt by hard-working people who have seen their wages and job security steadily diminish is fueling a populist revolt against the political establishment.
The left’s standard solution has been an activist government that taxes the wealthy – invests the proceeds in excellent schools and in other means that people need to become more productive and redistributes to those in need.
These prescriptions have been opposed vigorously by those on the right – who believe the economy will function better for everyone if government is smaller – public debt is reduced and taxes and redistributions are curtailed.
But the standard explanation – as well as the standard debate – overlooks the increasing concentration of political power in a corporate and financial elite that has been able to influence the rules by which the economy runs.
And the interminable debate over the merits of the ‘free market’ versus an activist government has diverted attention from how the market – both in Britain and in the United States – has come to be organised differently from the way it was half a century ago – why its current organisation is failing to deliver the widely shared prosperity it delivered then and what the basic rules of the market should be.
This means that the fracture in politics will move from left to right to the anti-establishment versus establishment.