Occasionally an insider is brave enough to point out the truth. One is Andy Haldane, executive director for financial stability at the Bank of England.

In a speech at the recent Jackson Hole gathering of central bankers he gave a speech, “The Dog and the Frisbee,” in which he warned that the growing complexity of markets and banks can’t be controlled with increasingly complex regulations.

“As you do not fight fire with fire, you do not fight complexity with complexity.”

He argues that complex rules often: have punitively high costs of information collection and processing; rely on “over-fitted” models that yield unreliable predictions; and can induce defensive behaviour by causing people to manage to the rules.

He outlines five fundamental limitations of the human mind:
1) since even computers can’t track all the necessary variables in the massively interlinked financial world, there is little hope that humans can;

2) intense information feedback from markets makes signals almost impossible to detect in the noise, so that “the more complex the environment, the greater the perils of complex control;”

3) even when the variables that decisively affect outcomes are known, it’s hard to know which ones will matter the most in a given situation, and it is hard for regulators to resist the temptation to pay more attention to the most vivid factors;

4) regardless of the massive amounts of data available, the sample of financial crises remains relatively small, making it hard to form reliable conclusions about what works best to prevent or cure them; and

5) complex and detailed rules lead regulators and financial institutions alike to “manage to the rules,” tiptoeing right up to the hot red line at which a crisis can be triggered.

Mr Haldane instances how regulatory complexity has built up: the Basel rules on capital requirements for international banking went from 30 pages in 1996 to 347 pages in 2004 to 616 pages in 2010.

Where eagles dare
Intellectual debates between public figures are, curiously, more of a European phenomenon rather than an English-speaking one.

It took an Italian and a Frenchman to discuss the future of the book at such a level to produce This is Not the End of the Book, which has appeared in English in a compact 320-page version.

In it, Umberto Eco (The Prague Cemetery) and screenwriter Jean-Claude Carriere (The White Ribbon) range widely over human learning and civilisations in a conversation “curated” by editor and writer Jean-Philippe de Tonnac.

It is the kind of talk you would love to hear at book clubs or writers’ festivals. Though familiar with the convenience and advantages of digital storage and retrieval systems, the two bibliophiles have no doubts the book – as the most convenient and permanent means of passing on knowledge – will survive.

Which brings me to another French intellectual, Richard Millett, who has dared to go where where few would – an explanation of Norwegain mass murder Anders Behring.

In an essay Millet (available here in a French Kindle version) Millett suggests Breivik's violence is an example of "what awaits our societies that won't stop blinding themselves in denial." This is that "European nations are dissolving socially at the same time as they're losing their Christian essence in favour of general relativism."

As Time magazine puts it, Millet contends that Norway “asked for it” by allowed immigration, multiculturalism, foreign customs, language and religion to become dominant influences communities that previously did not feel under threat.

Naturally, Millett has become a high-profile target but equally unsurprisingly is unrepentant, saying: “I’m one of the most hated French authors. It’s an interesting position that makes me an exceptional being.”

What we can learn from the Swedes
Labour MP David Cunliffe has been talking a little about what he saw on a visit to some Nordic countries.

While he was on a private family holiday, and not in full fact-finding mode, he would have picked up pointers about why those one-time social democratic countries are flourishing under free-market policies.

Only one of the four, Finland, is a member of the eurozone and is now starting to show signs of slowing, according to the Wall Street Journal.

The others – Sweden, Norway and Denmark – are not. All demonstrate how sound policy can deliver low unemployment, low debt and high growth.

If he and they are honest, Mr Cunliffe’s colleagues won’t like his findings, as the empirical reasons why Sweden is doing well run counter to what we hear about the Labour alternative.

Instead of higher taxation and extending the welfare state, Sweden is shaking them off. A brief outline comes in a new report by Nima Sanandaji, The surprising ingredients of Swedish success – free markets and social cohesion, which is available at the UK’s Institute of Economic Affairs.

Some of Sweden’s biggest advances have come in reversing problems that are familiar here:

The expansion of welfare benefits created huge social problems. Generous benefits, in conjunction with high taxes and a rigid labour market led to high levels of dependency amongst large segments of the population and have limited the ability of Swedish society to integrate migrants into the labour market.

The solution has come in introduction of market reforms in sectors such as education (charter schools anyone?), health (more private hospitals) and pensions as well as increasing economic freedom. (Sweden is well behind New Zealand on this score but fourth in global competitiveness compared with New Zealand’s rise this week from 25 to 23.)

Apart from the obvious lessons in how to achieve economic success, the paper makes some interesting observations about the how the welfare state increases social inequality rather than diminishing it, as it advocates often claim:

The reason for this uneven distribution of wealth is that many Swedish households depend on government safety nets and therefore do not save. Around 30% of Swedish households have negative, or zero, assets. Another 20% have asset levels that correspond to around one month’s salary for a normal household. The Swedish welfare state has promoted a society characterised by vast differences in private wealth, with many families lacking a private safety net.