The next economic consensus but one

The Brazilian economist Roberto Unger was so incisive and clear in his radicalism in the Radio 4 programme Analysis tonight, warning the Left in Britain not to be "paladins of nostalgia" but to have some kind of vision of the future.  The bizarre thing is that so few of the interviewees - even the Social Liberal Forum's David Hall-Matthews - really seemed to grasp what he was saying.

Part of the problem, I suppose, is the BBC's obsession with the minutiae of Labour Party policy, which is a side-effect of getting an IPPR apparachik to present the programme.

It is true that the idea of 'pre-distribution' has real intellectual depth, and could provide an antidote to a century's disastrous Fabianism, but will it?  On the evidence of the programme, probably not.  Policy for political parties is a frustrating and deeply conservative compromise, these days, trying to fit new ideas into old frameworks until they are barely new at all.

But the debate which really caught my imagination was the one about banks.  We are moving towards a new debate, which never quite seems to take off in the UK, about their future - but which neither Labour nor Conservative seem quite able to run with.

The question is not how to bend the banks to the will of politicians, which never quite seems to work, versus the idea that they have done their penance and must be left alone.  That is the old debate and it has got us precisely nowhere.

What Unger brings to this is the idea that we need a different kind of economic institution to make the economy work for us.  That implies breaking up the existing banks, which have ceased to function effectively, and to create a whole range of different kinds of banks - with their roots and allegiance locally and regionally - to finance and profit from a new kind of local economy.

Our politicians don't yet see that this isn't some kind of moral argument - a side issue to the main struggle to bring growth the old-fashioned way.  It is the central tenet of a new economic approach that is designed to bring economic well-being, and may be the only way of doing so.

There is lots of money around for lending.  What we so desperately lack is the institutions capable of lending it.

Unfortunately, the UK left seem to be determined to be 'paladins of nostalgia' instead.