In September 2008 the Lehman Brothers bankruptcy ignited panic throughout the financial system, sparking a chain reaction that led to the worst global economic crisis since the Great Depression. Amid the carnage of bankruptcies, soaring unemployment, and millions of families losing their homes, lay the bloody corpse of a set of ideas that had underpinned the economics of the previous 30 years. Capitalism based on markets, especially financial markets, was believed to be delivering unprecedented prosperity, creating a general increase in wealth, including among the poorest people on the planet. But that system is dead. So what to do now? Scrap the system?
In this revised UK edition of The Road from Ruin, Matthew Bishop and Michael Green have examined each financial crisis since the Great Depression, including the 1970s oil shock; Black Monday, the 1987 stock market crash; Japan's great deflation; the Asian financial crisis; and the collapse of long term capital management. They draw out the right and wrong lessons learned and explain how they can be used as the basis for meaningful reform that will enable capitalism to keep its ability to create wealth but on a more even and responsible keel.