Former financial watchdog chief: Capitalism has 'gone wrong'

  • The former head of the business lobby and financial regulator told the BBC that capitalism has “gone wrong.”
  • Lord Adair Turner pointed to sluggish growth and productivity and said living standards.
  • He said the rise of technology was “paradoxically” leading to workers taking low paid, low tech jobs.

LONDON — Lord Adair Turner, the former chairman of the Financial Services Authority warned that capitalism is failing to produce higher living standards.

Lord Adair Turner, who also used to lead the Confederation of British Industry, said economic growth was not having a real positive impact on people’s incomes and living standards in the UK, in advance of the release of third quarter growth figures on Wednesday.

“Everybody knows that capitalism is not egalitarian, but the broad promise has been that, over a ten year period, you can be pretty confident that a rising tide raises all boats and everybody feels somewhat better off, and that’s gone wrong,” he told BBC Radio 5 Live’s Wake Up To Money programme.

In November last year, he told Business Insider he was “increasingly worried” that advances in technology were undermining capitalism and stopping the global economy recovering from its “post-crisis malaise.”

Speaking on Wednesday, he pointed to a mixture of stagnant productivity, a fall in real wages and rising inequality as evidence of a system that is not working for many people.

“This is a big challenge for economists,” he said, “Why, in a world of apparently extraordinary capabilities of technology, do we have these very low productivity growth rates?”

He also said a major problem caused by increasing automation, particularly in sectors such as manufacturing and retail, was workers being displaced by technology and being paid low wages in “gig economy” jobs as a result.

“I think paradoxically that we should expect to see in a world of huge automation the continued proliferation of low paid, low tech jobs,” he said.

Lord Turner said slow growth was also in part a product of high levels of consumer and corporate debt, and hangover from the financial crisis.

On Wednesday morning the Office for National Statistics will release an estimate for UK GDP growth for July to September.

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