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Obviously anyone who thinks they know anything about economics will be mourning (to a greater or lesser extent anyway) the death of one of the twentieth century's greatest economists. Milton Friedman. So significant was he that I once thought they had named Milton Keynes after him and John Maynard! Come to think of it, with its fusion of central planning but with one of the country's first Cathedrals of the Almighty Consumer at its heart, MK is a strange coincidental fusion of the two men's ideas anyway!

I pity economists sometimes (though I say that through gritted teeth of course). For Milton Friedman's memory will forever be tainted by his association with Thatcherism and Reaganomics. Not in the usual sense of how he must have been the malevolent force behind them but in how little of his liberal vision they actually grasped. And how little of what they did grasp they actually implemented successfully. For the Europe that they so enthusiastically at first participated in was built as a protectionist's nirvana. The constant changing of which monetary aggregate to target was testament to how hopelessly they understood his view of stable money. For it should be remembered that he was just as critical of the contraction of money that he conclusively proved gave rise to the Great Depression, and, in the late eighties the Japanese slump, as he was of the loose money that created inflationary bubbles in the seventies and hangs over us now.

Now, I don't know whether the Freedom Association, which probably did as much as anyone to promote his ideas to Thatcher, were of as social conservative a bent as she, but she and her government failed completely to grasp the essential other side of the Freedom to Choose that he espoused. I cannot conceive of them taking on board his ideas on legalizing drugs - the criminalization of which was the greatest state subsidy to and protection for organized crime, he said. And the conservative vested interests then as well as now fail to understand his support for Land Value Tax. Whilst not a Georgist, in the sense that he did not believe the government should take all of the land value in tax, like Adam Smith he regarded taxes on such externalities as the fairest and least distortionary form of tax.

There can be no economic freedom without the personal freedoms that allow us all to choose individually how we will live our lives and the resources we need to do it. There can be no level playing field by making life easier for corporations but not for people. And there can be no free trade without that level playing field. That was why stable money was so important, as a level playing field, and that was why personal freedoms were and are so important and complimentary, for us all to compete with our own unique specialisms on that level playing field. Without the whole package the free market that many have imagined just cannot exist. And the greatest obstacle to it is political power.

It's only really in the past few years that I have begun to be able to isolate economists in my own mind from the context of the political movements that adopted their scholarship in some form or another. Adam Smith is another, hijacked by the "right" with all the connotations that has, whom I now find that if one can divorce them from the image of their latter day political tub-thumpers, speaks a lot of sense to someone trying to find an economics of the liberal centre. Even Keynes is another, hero of the opposite political camp, adopted by pseudo socialists and vilified by the right as a result. Together with Friedman, all three of these men have this reputational problem that their names are now routinely taken in vain when describing much bigger, more muddled, and often selective and twisted political implementations of the seeds of sense they planted.

I can't help thinking that if humanity needs a visitation from the afterlife, if such there be, then it ought to be a delegation of these economists who, now reunited, can compare the notes from their "great experiments" and find that middle road, and more importantly, the way to sell it to people!

This is something I've been meaning to write for months, but was particularly prompted to do so by a program on BBC last week about surviving the house price downturn. One guy had built himself a property portfolio worth about £8m (about £5m of which was debt) from a standing start renting a single room in a three bedroom house share five years ago.

He stated, correctly of course, that any numptie can make a killing while everything's rising, but it takes skill to do so in the uncertainty we are now in. His current ploy is to drop leaflets on people in areas where negative equity may be about to bite offering stretched home owners the chance to sell out quickly to him, at a deep discount, but continue renting the same home and with a guaranteed option to buy back again at a pre-agreed premium when things look better.

This sort of thing has long gone on, particularly in the "right to buy" market - albeit with some differences - unscrupulous bucket shop lenders go round offering to lend those who would not get a mortgage enough to buy their council home who then have trouble with their mortgage payments, they offer them a "rent-back" deal which is only just less than the mortgage payments so what they were paying £70 a week for as a council house in which they had no equity was now costing them double that still with no equity.

Anyway - many of you will know that I "run" a group called Oxfordshire Community Land Trusts , which is a mechanism for delivering more affordable housing for the "intermediate market" - those stuck above the income levels that would justify the deep subsidy of social rented housing but below a level that they can afford to get on the ownership ladder. Basically it works by the CLT owning the land and not crystalizing out the gain in land value on every transaction. People pay what they are judged to be able to afford rather than related to the home they need - I would pay nearly full market rates for a one bed flat whilst a family on half my income would get their three bed needs met on half my payments. But I would get twice as much equity as they do. Effectively we are all subsidizing each other through the Mutual Home Ownership Society that takes on the long term debt for the development and which all the residents join.

And earlier in the year we were asked whether this was still an attractive option in a falling market. Obviously it changes the landscape somewhat. Now perhaps more of a problem is that people who could afford to buy outright are unable to get mortgages through no fault of their own. Indeed this could be a boon to the CLT market, because we could find ourselves with more better off residents who would therefore be able to subsidize even lower income houses (it all works on averaging out the total payments you see).

But also by tweaking the model, from a development model to an acquisition model, I believe we could help out those over-stretched households currently prey to the man I mentioned above and with a long term benefit to the success of future CLT projects. In this scenario, the CLT would buy up houses and convert them into mutual ownership. The occupant instead of having to rent from the profiteering speculator landlord would get to keep whatever equity their current circumstances allow them to commit to with the CLT effectively holding the balance. As circumstances change, the household could buy back extra equity (without themselves actually having to borrow anything - Mutual Home Ownership looks more like rent from the occupants' perspective).

What we need to make this happen is access to funds - not necessarily large funds - just a revolving facility that allows us to step in quickly when a household is in distress and lenders start to take action against them - we get them the money to pay off all or most of their distressed borrowing and then the Mutual Home Ownership Society borrows against its commercial facility to take on the house itself with the household's new calculated affordable commitment.

Who has such funds? Well, local authorities have a duty nowadays to try to prevent homelessness, not just deal with it after the fact. Such a scheme has got to be a more efficient use of public money than say, Vince Cable's idea of getting councils to reward previous speculative build by buying direct from builders and converting them to social rented housing (I don't think it's a bad idea - just that mine is better!). Even existing lenders might find it more attractive to convert the loan to a MHOS than to repossess.  In the longer run the CLT ends up with more freehold land that would eventually, when the housing on it has reached its planned end of life be theirs to redevelop in the interests of the local community at that time and in the meantime the distressed owners get to keep their existing home, albeit with lower equity levels and lower debt levels.

Dare I even suggest that this might be a better way to spend $700bn than rewarding the bankers who helped cause the problem in the first place?  Julia Goldsworthy , get in touch if you want to know more!

If I'm a bit quiet at the moment it's because a. I have half a dozen unfinished blockbuster blog posts in progress and b. I seem to be putting in 12-14 hour days at work at the moment as I'm in the middle of a big software rollout. In fact I've just finished (at half past three in the morning) shutting down remotely tonight's 25 updated machines - perhaps I would be better off in India!

But I seem to have been "tagged" by James Graham for a response to George Osborne's statement that we are all living off the coat tails of the City of London, so I will try and honour him with a response! I'm not sure I share his or Jonathan Calder's interpretation that Osborne means the rest of us are living as "parasites" on the City. I don't detect such a value judgement in Osborne's comment. Rather I think he is in fact describing the status quo.

When as much Sterling is traded on forex markets in a week than our entire annual GDP - more in a single month than our entire national wealth - and when every trade generates a commission or turn for the middle-men in the City, Osborne is right if he is merely pointing out that we are too dependent on the City. What I can't fathom from what has been reported of his interview is whether any solution he might have to offer involves reducing the influence of the financial sector at the same time as trying to increase the competitiveness of British industry and non-financial sector wealth creation.

However much we may be dependent at the moment on financial markets for our national cash-flow (I won't say wealth creation because money is not itself wealth and pushing money around is not producing any tangible wealth, just pocketing tokens that could be used to buy actual wealth) it is unhealthy because it exploits all of us. In order to have enough tokens to trade in the volumes the interbank market needs to make a decent return they artificially inflate all the world's currencies. And then skim the cream off of what they have created.

I confess my mind is sorely troubled by recent events in the financial markets - partly why I am finding it very difficult to write about it. For several years now, after reading the likes of "The Future of Money: Creating New Wealth, Work and a Wiser World" (B.A. Lietaer) and "The Grip of Death: A Study of Modern Money, Debt Slavery and Destructive Economics" (Michael Rowbotham), I have become convinced that we are in the "last days" of a system based on debt, speculative froth and the dominance of money pushers, abetted by state protectionism of the highest order. Part of me wants this current crunch to precipitate the sort of crisis that will force us to find an alternative more sustainable system. The other part recognizes the inevitable pain to ordinary people such a collapse would cause unless we have an alternative waiting in the wings.

The problem is that they really do rule the world. Because we have given them the ability to create credit at will, to manipulate money supply, currency circulation and so on they utterly outgun all the real wealth production in the global economy. And it's only when we wake up to the fact that they are only able to do so by persuading us to borrow, usually on the back of land values that are in turn driven up by that borrowing until they reach what in the US has recently become a bursting point threatening the stability of the rest of the global market, that we will be able to do something about it.

A couple of blog posts in the past few days - one by Lynne Featherstone on Lib Dem Voice - have highlighted the issue of corruption, but there is no greater confidence trick and fraud than that perpetrated every day against us by the financial sector. Let's have some more discussion of how that affects us and what we can do about it.

Just a possible alternative headline for this story in today's Oxfrord Mail/Times - Trap Grounds Bill Tops 159k