The free market doesn't work. The emerging markets are crying foul. Global capital has been rampaging through their economies with dire effects. The most extreme case is Malaysia, prompting Mahathir Mohamad, that country's populist demagogue, to declare that "the free market has failed disastrously".
But that is not the right lesson to learn from Asia, Russia and, coming shortly, Latin America. It may be easier to for them to blame the markets than themselves, but the governments of these countries need to get the facts straight.
First, the benefits of free markets arise only where governments and industry are prepared for accountability. In the absence of an impartial legal system, some form of democracy, a free press and an acceptance of the concept of individual ownership, capitalism is corrupted as quickly as any other model of social organization.
Second, the governments facing the worst crises are those that habitually spend more than they collect in taxes, interfere in their country's banking systems and allow vested interest groups to prosper at the expense of the ordinary taxpayer.
These governments embraced free capital flows when it suited them: when they could be used to finance unproductive but prestigious white elephants; when those flows boosted their equity holdings or their banks; and when they needed to prop up their budgets. As we have just learnt from Russia's former finance minister, Anatoly Chubais, one of them at least believed it necessary and appropriate to lie about state finances to obtain continued credit - in Russia's case $22.6 billion in loans from the IMF and World Bank. It's only now, when the game is up and the debt pyramids they have built are crumbling, that they have turned on their former friends, the international capital markets.
Governments across Asia and Latin America now face an unenviable choice: fiscal adjustment and economic deceleration, leading to recession and deflation; or monetary expansion and possible hyperinflation. Faced with these unpalatable options they have turned back to the theories of John Maynard Keynes and Harry Dexter White. Both believed that capital flows would become an independent and disruptive force and that only control of both inward and outward flows could prevent systemic problems.
As our series of cover features show, these ideas have been picked up by MIT's Paul Krugman, World Bank chief economist Joseph Stiglitz and a host of other figures from politics and academia. They now openly question the unfettered deregulation of capital movements that until recently had been the core of modern financial thinking.
As well as exploring their views, we look at the role of the IMF, and its possible future and funding. We also argue that for smaller frontier markets, control of capital inflows (but not outflows) may be a way to curb the undoubtedly inappropriate role of portfolio, and particularly hedge fund, investment.
One last thought. According to figures released in mid-September, the total exposure of the Credit Suisse Group to Russia, Indonesia South Korea, Malaysia, Thailand and Brazil is around $8.2 billion. The group's total tier-one capital is $17.6 billion.
These are sobering numbers. But then look at the effect on the group's BIS ratios. Even if all this money were lost (and the group would never have to take a one-off hit of this size - cost reductions, tax relief and hidden reserves would soak up several billion dollars), the tier-one ratio would fall from 11.5% to 6.5%, still well above the 4% minimum, and the total capital ratio would fall from 17.7% to 12.7%. Compare this with the 1982 Mexico crisis. Many banks' total capital ratios dropped below 4% and some ran on negative equity.
For the big banks, too little capital is not the issue. Earning a return on what you have is.