Lord Adair Turner, the former chairman of the UK's Financial Services Authority, thinks that the rise of political extremism in Europe and the US is an "inevitable consequence" of a breakdown in capitalism.
Turner said the political gains for far-right parties in Europe, and Donald Trump's surprise success in the Republican primaries, spring from voter anger on being overlooked by the free-market.
"I think it's a huge issue for those of us who believe in a free-market economy and that free-market capitalism delivers for everybody. The blunt fact is that it is breaking down," Turner said at a MarketAxess conference in London on Thursday.
Wage-earners on the lower end of the scale "have seen no increase in the US for 25-30 years" and in the Eurozone wages "are significantly below where they were" before the 2008 financial crisis, he added.
Turner also argues that problems really set in when political instability affects investment decisions, potentially leading to a vicious circle.
"These things can become circular, and there's a process of political uncertainty that creates worries about financial risk which leads to lower levels of investment," Turner said. "The Trump development is the inevitable consequence of a system" that used to provide benefits for everyone, but that doesn't anymore.
Plenty of people criticise capitalism and extremists like Trump. But Turner is different. He is the consummate insider, a former vice-chairman of Merrill Lynch Europe and former chairman of the FCA. He is also a respected economist, lecturing at LSE. He is also the author of "Between Debt and the Devil," a respected — if dense — book on the effect of credit on the free market.
Meanwhile, Russia has criticized Donald Trump's latest presidential election video, which it says demonizes the country. The video shows Putin throwing a man in a judo match and an ISIS soldier pointing a gun at the camera before cutting to Hilary Clinton barking like a dog.
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