So it seems we're in for a 'double-dip' recession. A weird term, double-dipping; it comes I think from the unsavoury habit of sticking your half-eaten nacho back in the salsa. Either that or some bizarre sexual practice. Its meaning is equally repellent: As soon as the economy starts to look better it will inevitably get worse again. Why? I've no idea. That's the stupid thing – although people have been saying for at least a year that the recession could turn out to be W-shaped, I've still to hear a plausible explanation. Except that it's in honour of the founder.

How can they be sure a second recession is coming? They weren't so hot at predicting the first one. My theory is that nobody actually predicted any such thing as a double-dip.

Someone just said: "What if instead of the normal V, this recession turns out to be W-shaped?" It was completely random speculation, but now everyone's all "My God, could that really happen?" and is glancing wildly around for signs. As soon as the dollar drops by one fifteenth of one percent, they scream "Ahh! It's happening! Sell, sell, sell!"

Economics is full of self-fulfilling prophecies like that. Funny though, only if you predict panic. Saying "Hey, I hear there's going to be fifty years of calm, slow and stable growth" never seems to work. It reminds me of a thoroughbred racehorse or show dog.

Perfectly efficient and splendid-looking for a single purpose, but startle it in any way and it runs around squeaking and trying to bite its own head off.

Let's face it, if we're having a second recession it's because we pointedly refused to learn the lesson of the first one. What are we doing wrong? The clue is in the name. Capitalism is all about the money. Sure, money is something we need, it has to be traded and managed. But our system focuses on it to an obsessive and dysfunctional degree. We become so enmeshed in abstruse 'services' and 'instruments' that it seems like the financial industry is the economy.

Yet it – indeed, money itself – exists only to facilitate the actual business of making and trading real things. Financial markets provide a service, but they only reliably make money for one kind of person: People who already have money. In our upside-down system we have so over-prioritised financial markets that they are hindering – even destroying – actual productive economic life. Our system chiefly serves the interests not of dynamic business, but of static wealth.

Meanwhile China, where the availability of money is pretty much set by government fiat or decree, has overtaken Japan as the world's second-biggest economy and has the number one spot firmly in its sights. Some people will repeat the mantra that this only works under a dictatorship, that democracy needs capitalism, but they are refusing to acknowledge that capitalism has no reciprocal love of democracy. As long as it’s left free to make money, it doesn't mind if that happens under democracy or dictatorship.

Not only does democracy not need capitalism, I'm not entirely sure it can survive it.