Capitalism itself is not in crisis, but western capitalism is. This is a result of three mistakes.

The first was to regard capitalism as an ideological good, not as a pragmatic instrument to improve human welfare. Alan Greenspan was probably the greatest victim of the ideological conviction that markets always knew best, so there was no need to regulate them vigorously. This has wreaked havoc on the world. Yet no Asian society fell prey to this dogma. Instead, they believe that no society can prosper without good governance.

For capitalism to work well, the state has to play a regulatory role. This was ignored by many western governments. To make matters worse, the west spawned a huge financial services industry that was widely thought to have added a lot of “value”. For a while, like all good Ponzi schemes, it seemed to have done so. Yet it is now clear it added no real new value.