The book demolishes standard macroeconomic theory and shows how central banks’ blinkered obeisance to that theory has, by making bubbles, crises, recessions and, latterly, inflation inevitable, undermined the pillars of a capitalist society.

It has become a commonplace to blame central banks for recurrent bubbles and financial crises, recessions, massive wealth inequality and widespread disenchantment with capitalism, and latterly for inflation. But this important new book argues that the enormous intellectual error of which central banks have been guilty sprang from the generation-long arrogance of the mainstream academic macroeconomics profession, which ignored interwar lessons and the crucial importance of intertemporal disequilibrium. The book shows why and how the intellectual error, most evident in the deliberations and actions of the US Federal Reserve from the mid-1990s onwards, set in train the global consequences which now threaten the continued existence of a capitalist society. In particular, it explains how central banks have needed the financial-sector misbehaviour they so piously castigate. While a key early figure in this Greek Tragedy was an ardent advocate of capitalism – Alan Greenspan, the revered former Federal Reserve Chairman – culpable hubris has underlain the whole structure of modern macroeconomic theory. Nemesis, the book shows, has followed ineluctably.

Bernard Connolly is a renowned British economist and author of the international best-selling book on monetary matters, The Rotten Heart of Europe. A consultant to wealth managers, he is highly respected by central bankers, policy-makers and financial-market participants, who appreciate his depth of highly original theoretical understanding and his ability to apply that theory successfully to the real world. He has published articles in the financial and general press throughout the world.

* The new book from the bestselling author of The Rotten Heart of Europe’, the classic whistle-blower’s account that shook Europe.
* This book demolishes standard macroeconomic theory and shows how central banks’ obeisance to that theory has fatally undermined the pillars of a capitalist society.
* An essential read for anyone interested in contemporary economics and a devastating challenge to traditional thought and approaches to the subject.

‘In the 1930s, great books were written on the economic policies necessary to save democracy, and Keynes’s General Theory and Schumpeter’s Capitalism, Socialism and Democracy are still on reading lists for students and general readers alike. But there are few modern counterparts. Bernard Connolly’s new book will fill this gap.

Connolly does not take prisoners. He points out that the source of the financial crisis a decade ago lay in global developments and lays particular responsibility on Western policymakers. Most important of all, he explains why this happened in terms of an intellectual failure of much of the modern economics profession which, seduced by its own technical progress, failed to learn the lessons of the 1930s and failed to understand what was going on in the world around them. In their own understanding, the problem lay with the world and not with their models.

A unique feature of Connolly’s work is his understanding of the historical origins of both the economics and politics that are driving current developments. It is unusual to find a very good economist who understands not only the intellectual origins of his subject but also political history. Even those reviewers who would disagree with his conclusions will recognise that they have learnt a great deal from the richness of his analysis and the force of his argument. This will be a book to read by anyone interested in political economy today – and surely we all ought to be concerned about what is going on in the world.’

Mervyn King, former governor of the Bank of England

‘For many years Bernard Connolly’s work has cut through the noise and shown unrivalled insight into what is really happening in Western economies. You Always Hurt the One you Love needs to be read by every policymaker as a necessary first step to understanding why we are in the fix we are in and how we get out of it.’

Lord Frost, former Cabinet minister and chief Brexit negotiator

‘Recent developments in financial markets reveal again that mainstream macroeconomics has deep flaws. Bernard Connolly´s book offers an alternative approach which deserves wide attention.’

Otmar Issing, former Chief economist of The European Central Bank

‘There are plenty of books already out on the subject of the causes of the rise of what the establishment refers to as populism and on the various ways we might “save capitalism”. Few are written, or likely to be written, by an economist with the depth of understanding of both the political and economic drivers of the shifting sands of the West as Bernard Connolly – or, indeed, with his forecasting record. His book displays a genuine understanding of the policy mistakes that have taken our current system to the brink of unsustainability – and offers a lifeline in the form of the policies that could pull us back from that brink. Connolly isn’t going to find a willing audience for his ideas at the world’s central banks. But he should certainly find a fascinated one among the ordinary people who have borne the brunt of their failures.’
Merryn Somerset Webb, senior columnist, Bloomberg

 ‘Given that views are so different even among “experts”, what is the right economic policy in a democratic society? Simply put, we need a rethinking of macroeconomics, as Keynes did in the 1930s. Of course, it is a really daunting task, but we have to start it. What is needed is deep observation from a wider perspective, clarity of thinking, and honesty and courage to raise one’s voice. Bernard Connolly has been doing exactly this over the past decades. I believe Connolly’s new book, which synthesises and develops his ideas from the past two decades, will be a great contribution to much-needed work going forward for academics and policymakers – and it will allow a wider public to understand and assess the social and political implications of what those policymakers are up to.’
Masaaki Shirakawa, former governor of the Bank of Japan

‘Bernard Connolly is one of the five most prescient global financial strategists in the world today. Everything he writes is light years ahead of the pack. Agree or disagree, his analysis regularly stirs the pot of the global economic debate.’
David Smick, founder and editor, The International Economy magazine, and New York Times bestselling author

‘Bernard Connolly is a seer – one of the most penetrating intellects I have ever encountered. What he sees in his new book, and explains more clearly and compellingly than anyone, is how central bank policies based on a wholly inadequate academic theory have so distorted Western economies that capitalism itself, and the whole structure of our societies, is now in danger. Connolly combines rigour and passion with insight in his writing. This book matters. And it will be unmissable.’
Paul Tudor Jones, founder and chief investment officer, Tudor Investment Corporation; founder and sponsor, Robin Hood philanthropic foundation