The Business Secretary Vince Cable has come under attack for reports that he will call at the Liberal Democrat conference for an alternative to Capitalism. Apparently what he actually plans on is 'shining a harsh light into the murky world of corporate behaviour,' a reference that he is to undertake a 'wide ranging consultation of takeovers, executive pay and corporate short-termism.'

Of course, Capitalism is fundamentally flawed and, if the government and the business community were to take seriously biblical warnings against credit and debt financing, there are realistic measures that could be taken that would significantly avert the risk of a repeat of the recent global financial meltdown. For instance, as we've suggested previously, contracts for house purchase could be developed as an alternative to mortgage lending that more effectively share the risks and returns of price fluctuations (such as lease-to-buy or shared-appreciation arrangements, in which banks take equity stakes rather than give loans). Other measures would include the introduction of competition policy and regulatory restrictions (e.g. limits on a bank’s share of retail deposits) to counteract the competitive advantage larger institutions receive from being believed to be ‘too big to fail.’

So, if the director general of the CBI, Richard Lambert, is genuinely interested in 'ideas for an alternative' to Capitalism, he could do worse than to begin with our recent paper Beyond Capitalism or the plenary session on The Economic Crisis by Paul Mills at our Cambridge Papers Open Day last summer.

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