To get out of this vicious cycle, first of all the crazy economic dependence on the whims of clearly irrational financial markets must be reduced – which means not just more regulations, but also shrinking of the financial sector and subjugating it to the needs of the real economy and society.
Second, a real progressive change also requires a major change in strategy, within countries and globally. Essentially, we have to move away from the profit- and export-driven growth model to a wage-and-employment-led growth model, in which improvements in employment and quality of life of all citizens are seen as the basic goals.
Image: A protester hold a placard against banks during an"Occupy Hong Kong" rally outside the Hong Kong Exchange Square.Previous columns by Dr Jayati Ghosh:
Global Financial crisis: Five steps world leaders must take
Global turmoil and the threats it holds for the Indian economy
The scariest thing about the world economy
Is Europe rushing headlong into economic destruction?
The finance minister has failed the common man
Two burning issues the budget must tackle
Renowned economist Dr Jayati Ghosh is the Professor of Economics at the Jawaharlal Nehru University in New Delhi. She is also a member of the National Knowledge Commission set up by the Indian Prime Minister.