Capitalism ‘failing many’

CAPITALISM is failing because it no longer helps ordinary people, says a top economist seen as a frontrunner to lead the Bank of England.

Raghuram Rajan, who is the former head of India’s central bank, said that faith in the global economic system must be restored urgently.

He added that it was once possible to get a good job with a relatively modest education, but success is now reserved for people who went to top schools.

The 56-year-old said: ‘I think capitalism is under serious threat because it’s stopped providing for the many, and when that happens, the many revolt against capitalism.

‘It’s not providing equal opportunity and in fact the people who are falling off are in a much worse situation.’ Rajan, a former chief economist at the International Monetary Fund, has been widely tipped to succeed Bank of England Governor Mark Carney when he leaves in 2020.

In a break with Carney’s often gloomy predictions about Brexit, the Indian criticised the European Union’s ‘profoundly undemocratic’ centralisation of power.

Asked if the UK’s future might be brighter outside the European Union, he told The Times: ‘It could be, but it does require a lot of things to go right. The big Brexit debate is, can you, in a short span of time, reengage with the world on equal terms while getting more sovereign powers?

‘I have no doubt that there is a scenario in which that can happen and I have no doubt there are other scenarios where it flops miserably.’