A Banquet of Consequences is a lively exploration by financial expert Satyajit Das on why, following the global credit crunch, the world is entering a period of prolonged economic stagnation, and what that means for all of us.
The factors that caused the Global Financial Crisis of 2008 have not been addressed, notes Satyajit Das in this brilliantly clear-eyed account of the state of the world economy. Global debt today is higher than it was before the crisis. The big banks, bailed out by taxpayers at the height of the GFC, are now bigger than ever, by an astonishing 40 per cent. The problem of unfunded and unsustainable welfare entitlements remains unresolved. In most developed countries, economic growth, employment, income and investment are still struggling to return to pre-crisis levels. Meanwhile the developing countries have not become the new drivers of global prosperity they were expected to be.
The crux of the issue, argues Das, is that economic growth cannot continue indefinitely. The reasons for this include demographic changes, lower rates of innovation, slower improvements in productivity, the increasing scarcity of natural resources, the impact of global warming, the reversal of globalisation, and the rising inequality within and between nations.
The strategies deployed by governments to promote growth have failed. What’s really needed is unpopular structural change, which will result in a reduction in wealth and living standards. World leaders know what to do, they just don ‘t know how to get re-elected after they ‘ve done it. People don ‘t want to hear that their time of plenty has reached the end.