'The Non-Existent Hand' by Joseph Stiglitz, London Review of Books

"What we can do, however, is ensure that those who make mistakes bear more of the consequences of their decisions – and that others bear less.

We can ensure that those entrusted with the care of other people’s money do not use that money for gambling. This is true whether those decisions are based on flawed models of risk or irrational perceptions of uncertainty.

Taxpayers, workers, retirees and homeowners all over the world suffered because of the mistakes of America’s financial markets. That is unacceptable, and it is avoidable.

Keynes’s great contribution was to save capitalism from the capitalists: if they had had their way, they would have imposed policies that weakened the economy and undermined political support for capitalism.

The regulations and reform adopted in the aftermath of the Great Depression worked. Capitalism took on a more human face, and market economies became more stable. But these lessons were forgotten.

Thatcher and Reagan ushered in a new era of deregulation, growing inequality and weakening social protection. We are now seeing the consequences, and not just in greater instability.

Keynes’s insights are needed now if we’re to save capitalism once again from the capitalists."

http://www.lrb.co.uk/v32/n08/joseph-stiglitz/the-non-existent-hand