Book review: The FIRE Economy by Jane Kelsey

I believe Auckland University Law Professor Jane Kelsey has written a very important book, warning us that our economy is being burdened with unsustainable debt and that we are sleepwalking to a potential financial crisis. She is not alone in her stance.

Her views keep company with some pretty influential people: Joseph Stiglitz, chair of the UN Commission on Reform in the International Monetary and Financial System; Christine Lagarde, managing director of the IMF; and Mark Carney, governor of the Bank of England.

Their mutual position is best summed up in the words of Mark Carney.  “Just as any revolution eats its children, unchecked market fundamentalism can devour the long term dynamism of capitalism itself.”

The “FIRE” in the title is an acronym for Finance, Insurance and Real Estate and has become shorthand for the forces that are currently seen as the drivers of our economy. Kelsey makes the very real point that these are also the forces that will destroy it.

The FIRE economy, marked by neo-liberalism, has become so embedded that it will take either a crisis or careful dismantlement over years to loosen its grip.

Jane Kelsey argues that in the last three decades “financialisation” of the economy has seen paper values being used to leverage greater paper values, fuelled by unsustainable investment in non-productive assets, spiralling out of control and exacerbating the gap between the haves and the have nots.

It’s a book that needs a wide audience.

I went to the launch in the Lecture Hall of Old Government House last week – well attended by the Jane Kelsey Fan Club - a large number of anorak-wearing Green and Labour Party supporters. Unfortunately some of the rhetoric echoed old left-wing mantras and I hope the book doesn’t get politically hijacked and therefore marginalised and dismissed as Socialist cant. 

It’s too important for that and needs to be read, absorbed and acted on by anyone with an ounce of economic common sense.

Mike Hutcheson

​--

The FIRE Economy by Jane Kelsey

Bridget Williams Books

$49.95 (print), $20 (e-book)