Vicky Pryce, board member of CEBR, a former government economic adviser and co-author of It’s the Economy Stupid, Economics for Voters, says Yes.
The impact of globalisation has on the whole been positive. It has lifted hundreds of millions out of poverty, created vast new middle classes and extended all our horizons.
The consumer has benefited from lower prices. Inflation has been low as a result, and monetary authorities have responded by keeping rates at record low levels in accordance with set inflation targets.
This may have tilted the balance of wealth in the economy but for the vast majority of the population, growth and employment are key – and access to cheap and abundant credit vital. The Bank of England’s own estimates suggest that, during the period of ultra-low rates, UK unemployment would have been 1.5m higher and wages on average £2,000 lower without its action.
Mark Carney is right that in the end it is fiscal policy, decided by politicians, that should be doing the redistribution in a capitalist economy – not monetary policy whose aim is financial and inflation stability that benefits all.
Jason Hollands, managing director of Tilney Bestinvest, says No.
There are myriad reasons for the disillusionment with establishment politicians and an elite which includes big business, including downwards pressure on wages from immigration, unelected policymakers, and the actions of international corporations to mitigate their exposure to taxes.
Central banks are not solely to blame, but the unintended consequences of unconventional monetary policies since the financial crisis have been a major factor. QE and ultra-low interest rates have had tenuous benefits for the real economy, but have helped supercharge returns on markets, making asset owners wealthier when wage growth has been anaemic.
This has fed a sense that the “recovery” has benefited the few, not the many. Yet capitalism – a system where rewards require risk-taking and which demands both losers and winners – is not to blame.
Pump priming has removed much of the risk from markets to the benefit of asset owners, while the rest struggle to make headway.