Two of Britain's most prominent economists have called for changes to the economic orthodoxy. At an event organised by the independent think tank, the Finance Foundation, Lord Adair Turner, the Chairman of the Institute for New Economic Thinking and Martin Wolf, the Chief Economics Commentator at the Financial Times, both suggested that future economic stability across the world will rely on a change in the accepted balance between the state and the private sector.

Lord Turner suggested that nominal demand growth can come either from private credit and money creation through the banking system or from government sovereign money creation. Turner's crucial argument was that the modern economic orthodoxy, that the free market banking system will bring the optimal result whereas sovereign money creation is always dangerous, is a fallacy. Indeed he harked back to Chicago plan theorists from the 1930s, such as Henry Simons, who suggested that private credit and banking were so dangerous that banks should be abolished. However, Turner stopped short of this heterodox view arguing instead that both systems – the market or the state - could be subject to failures. He suggested that – because of the political danger in a regime of 'helicopter money' financing in which politicians might overstep safe limits of sovereign money creation – a robust and independent institutional setting, such as the Bank of England's monetary policy committee, would be needed to control the policy. He also advocated for a hybrid system with a role remaining for private credit, but with greater controls to stop the excessive creation of private money and purchasing power – these, he argued, led inevitably to the 2007‐08 crash and the current debilitating debt overhang.

Wolf also laid blame for the current global economic problems on the previous acceptance of the premise that liberal finance was the key to growth and stability. His carefully chosen words attacked the financial sector for making no real contribution to economic productivity and then argued that the increasing inequality now being experienced in developed economies is not conducive to stable democracies, and must be addressed as a matter of urgency. Wolf went on to suggest that there are both supply and demand side problems in our economy and that our current tools for stimulating economies are not working; historically low interest rates are not removing the underlying economic malaise in Britain or globally. He therefore supported Turner's championing of helicopter money creation – even postulating that all citizens could be given a monetary handout - as preferable to drastic future alternatives such as negative (and possibly super--‐negative) interest rates.

Both men had stark warnings for the future of the global economy. Turner pointed out that the stagnating standard of living in advanced economies is stirring popular anger at elites and minorities. Wolf led on from this point to warn of the historical lessons to be learned from the combination of these types of anger with economic downturn and suggested we are seeing dangerous ideologies break into the mainstream of American politics – a risk he described more broadly as the rise of the 'political entrepreneur' who sees a populist gap and moves to fill it. Wolf further argued that the Western policy towards the liberalisation of the Chinese financial system is extremely worrying. He believes that the current acquiescence towards a breakneck pace of liberalisation could eventually lead to a huge crash in the world economy and commented, perhaps prophetically, that if the Chinese financial system is liberalised to the same extent as that in the United States it will be "game over" for the global economy.

Turner and Wolf's remarks display the increasing lack of trust in well--‐worn economic policies that promised, but have failed to deliver, economic stability and its corollaries: social and political stability. Their remarks may remain heterodox, but both seem determined to be heard and to ensure their ideas will help to stave off future economic or worse disasters.

This summary was written by Ben Szreter, Graduate student in economic history, Wadham College, Oxford University