Financial Times
June 17, 2011
When Sir Winston Churchill suggested that democracy was the worst form of government except all the others that had been tried, he might well have been right. Democracy has its limitations, particularly when electoral judgments come into conflict with the more ruthless judgments made by the market.
But it remains as difficult as ever to see any better alternative. This remains particularly true in the nation that gave democracy to the world.
When the will of the market collides with the will of the people, there is nothing for it but to accept the pain. That was the story of the implosion after the Lehman Brothers bankruptcy nearly three years ago and it appears likely to be the story of the Greek fiscal crisis now.
After Lehman, there was initial shock and uncertainty – but the collapse of stock, commodity and currency markets did not happen for a few weeks. That was when elected politicians were forced to choose between the demands of voters and markets, and went with the voters.
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