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Centralised economic planning was at its height thanks to a combination of world war, statist ideologies and the new macroeconomic techniques invented by John Maynard Keynes. It was against this backdrop that a marginalised group of economists and philosophers began the neoliberal fightback. They were inspired and organised by the émigré Austrian intellectual, Friedrich Von Hayek.

Markets, from this perspective, are information-processing machines. They are like vast computers, channelling decisions, desires and preferences. They have no ideas of their own about what is worth producing and having: they just process the choices that individuals happen to make. And their capacity to do this is all thanks to the price mechanism.

Firstly, individuals, not experts, were the best judges of their own tastes and welfare. Secondly, the price mechanism of the market could be trusted to adjudicate between the various competing ideas, values and preferences that exist in modern societies. The state, by contrast, could not.

How has this mess been created? The mismanagement of the crisis by the coalition government means it has to bear significant blame, but the main cause lies in the nature of the economic model that the UK has pursued for three decades.

However, the underlying economic model remained intact; the New Labour thinking was that we should let the City maximise its profits by minimising regulation, and then help the poor with the taxes on those profits. There was no realisation that the financial system itself may be a problem.

Of course, all of these policies are supposed to have been backed up by scientifically proved economic theories – saying that markets are best left alone, that making the rich richer makes everyone richer, that welfare spending and protection of worker rights only make people lazy and dependent, and so on. Most people have accepted these theories without much questioning because they are based on "expert" advice.However, all these economic theories are at least debatable and often highly questionable. Contrary to what professional economists will typically tell you, economics is not a science. All economic theories have underlying political and ethical assumptions, which make it impossible to prove them right or wrong in the way we can with theories in physics or chemistry. This is why there are a dozen or so schools in economics, with their respective strengths and weaknesses, with three varieties for free-market economics alone – classical, neoclassical, and the Austrian

Here again, he seems to be talking about physical volumes of capital, augmented year after year by profit and saving.

The basic neoclassical theory holds that the rate of return on capital depends on its (marginal) productivity. In that case, we must be thinking of physical capital—and this (again) appears to be Piketty’s view. But the effort to build a theory of physical capital with a technological rate-of-return collapsed long ago, under a withering challenge from critics based in Cambridge, England in the 1950s and 1960s, notably Joan Robinson, Piero Sraffa, and Luigi Pasinetti.

There is no reason to think that financial capitalization bears any close relationship to economic development. Most of the Asian countries, including Korea, Japan, and China, did very well for decades without financialization; so did continental Europe in the postwar years, and for that matter so did the United States before 1970.

We Make Our Own History rethinks humanist Marxism as a theory of collective action, including the ways in which social movements from below can develop from localised struggles over individual issues to far-reaching projects for social change (a welfare state, an end to patriarchy, an ecologically sustainable society). It also looks at the history of movements from above – those which can draw on the resources of capital, the state or cultural power to impose themselves.

If the ideologists of neoliberalism want to present it as the natural order of humanity, a more sober historical assessment points out that it has lasted about as long as Keynesianism did before it – a few decades – and is just as vulnerable to the collapse of the alliances which sustain it.

The Latin American pink tide demonstrated US inability, for the first time in a century or more, to impose its will (in military, foreign policy or economic terms) on its Latin American “backyard”. The planned “long war on terror” is basically over, with the original strategy for a rolling series of attacks on rogue states buried in the sand and political support for US wars collapsing not only among US elites, but also their European and Arab allies under the impact of the anti-war movements of 2003 in particular. This has fed into a broader weakness in relation to control of the strategically crucial Middle East and North African region manifested in the “Arab Spring”, in particular events in Egypt, and subsequent failure to secure support for war in Syria. Meanwhile, the Wikileaks and Snowden affairs have highlighted the legitimacy crisis of the supposedly all-powerful surveillance state.