So what’s different? As the financial crash fades in the memory, the question most frequently asked, and infrequently answered, is how permanent will be its imprint. To my mind, the answer is obvious. Everything has changed; and, of course, nothing has changed.

Start with the first of these two propositions. I was struck by an observation made by Gao Xiqing, the president of the China Investment Corporation. Surveying the nationalisation of large chunks of the US financial sector, Washington’s takeover of the automobile industry, and the soaring federal budget deficit, Mr Gao said he detected “socialism with American characteristics”. Plenty of Barack Obama’s Republican opponents would concur.

The US has not been alone in its interventionism. The British government, once as ardent a disciple as any of let-it-rip financial capitalism, now controls two of the country’s four largest banks. Tearing up decades of monetarist orthodoxy, it has been printing money to keep the financial system afloat. A hands-off approach to business has been abandoned in favour of what Lord Mandelson, the ever-energetic business secretary, calls a new “industrial activism”.

The market economy, it is true, has defied excitable predictions that the future would belong to the authoritarian capitalism of China and Russia. The Chinese have certainly navigated a skilful route through the crisis, but that country’s marriage of communism to the profit motive is sui generis. As for Russia, without the revenue from its energy resources, Vladimir Putin’s brand of crony capitalism would have collapsed long ago.

That said, the Washington Consensus, the organising idea behind the global advance of laisser faire economics, has been unceremoniously buried. The crash was the emerging world’s revenge. Forced to take the International Monetary Fund’s bitter medicine in the late 1990s, Asian governments vowed never again. As irony would have it, the foreign currency reserves they then accumulated inflated the financial bubble that was to burst with such devastating effect last year. The world’s rising economies are not about to take any more lectures from the west on the virtues of liberal markets.

The crisis has restored the legitimacy of the state: bankers have been dethroned, Alan Greenspan defrocked and economists exposed. Regulation is no longer a term of abuse. Adam Smith has made way for John Maynard Keynes as fiscal policy has been rehabilitated as a tool of economic management. The banks have been told to rebuild their capital. Sub-prime mortgages and collateralised debt obligations belong to the past.

Wait a minute, though. Most of this is as much about tone and degree as about substance. Where is the decisive rupture with the past? The second of my two propositions has it right: nothing has changed. And why should it have? Remember those hysterical forecasts about a world hurtling towards economic Armageddon. Well, they turned out to be just that – hysterical.

The global economy has taken a serious knock, at huge human cost. But even the ever-cautious IMF thinks it is now on the mend. Capitalism, to adapt one of Winston Churchill’s famous aphorisms, has proved again to be the worst possible system of economic management, except for all the alternatives.

Politics carries the same message. A backlash against free markets would have seen the resurgence of the left. Well, I suppose you could say the crisis gave Mr Obama a helping hand into the White House. But look elsewhere and we are scarcely witnessing a resumption of socialism’s long march.

The centre-right Angela Merkel has just won the German election. The Conservative David Cameron seems set to emulate her in Britain. France’s Nicolas Sarkozy looks impregnable against a divided socialist opposition; even Italy’s Silvio Berlusconi, sad to say, looks secure against the left.

As for the bankers, one or two have been packed off with platinum-plated pensions. Most of them are again counting the numerous noughts on their bonuses. To listen, as I have done recently, to executives of institutions such as Goldman Sachs is to realise that history is being rewritten even before the ink is dry on the first draft.

If the crash was the fault of anyone, the revisionist narrative runs, it was certainly not the masters of the universe at places such as Goldman. You and I may think it had something to do with dud mortgages being repackaged as inexplicably exotic financial instruments. Wrong. The fault lay with the inadequacy of the regulators. As for mega bonuses, well, what’s the problem?

What is missing is anything resembling a fundamental challenge to the status quo. The market system, of course, is being made a little bit safer; and, for a time at least, governments and regulators will intervene more directly to restrain some of capitalism’s animal spirits. The bankers will find that the price of stuffing their pockets is to be about as popular as politicians. I doubt they much care. You would be sorely stretched to describe any of this as a new settlement.

One or two people have offered intelligent suggestions as to how we might re-engineer market capitalism. Lord Turner, the chairman of Britain’s Financial Services Authority, is a rare policymaker with the courage to question the utility of the explosion in financial transactions that do nothing but generate hefty rewards for bankers. The American economist Joseph Stiglitz has urged policymakers not to be slaves to year-on-year rises in gross domestic product. There are other measures of human welfare.

I get the impression that few people are listening. The urge is to get back to business as usual. Among bankers I meet there is a lot more hubris than humility. In this respect, Goldman is merely first among equals. Among politicians, there is a shrug-of-the-shoulders resignation; where are the votes in a strategy that says there is more to life than GDP?

Historians, it is fair to say, will probably look back on the past year or so as an epochal moment. But what will interest them is not a change in the nature of capitalism but the shift in the distribution of global economic power. The market no longer belongs to the west.

philip.stephens@ft.com
More columns at www.ft.com/philipstephens

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