G20: Skewed finance

The world faces crisis of finance, not a crisis of capitalism. As protestors gather to denounce capitalism on the occasion of the G20 summit in London, it is worth remembering that free markets and free trade are not to blame for the current economic mess. The real culprit has been skewed finance. This distortion has operated on four levels. First, there has been an imbalance in world trade, with giant surpluses in China matched by deficits in the US, the UK and elsewhere. That allowed borrowers...