As Brown poses as FDR, look ahead to a very new capitalism

Charles Leadbeater, the acclaimed innovator and new media analyst, predicts a transformed landscape: a new ‘networked’ capitalism in which the state plays a part but cannot pick winners — a system that is chastened, subdued and fraught with social danger

We should be searching for a new kind of capitalism, and not just according to the far Left. That is the message from Washington dinner parties and in the pages of the Financial Times.

For most people the next year will not feel like a search for a brave new economic model: it will be more like hand-to-hand combat to keep hold of what you have.

Yet the world is being turned upside down not by wild-eyed revolutionaries but sober central bankers and civil servants. High-octane, free-market financial capitalism has been devoured from within as the financial markets lost faith in the system they created. The City of London, once the jewel in the crown of the free-market empire, is being turned into a toxic debt recycling plant.

Bankers may become a bit like trade union leaders. After the excesses of the 1970s and the reforms of the following decade, the trade unions became just another part of the economy in the 1990s. They are still with us and occasionally make news, but they are not a power in the land. Something similar may happen to bankers.

Capitalism’s strength is its capacity for evolution. In the mid-1970s managed, national Keynesian capitalism gave way — in the US and the UK at least — to a more international, market-driven variety, a shift that gathered pace after the fall of the Berlin Wall in 1989. Will this year mark a further mutation to a new model of capitalism that could be with us for the next three decades?

The answer will depend on the severity of the looming recession, the pain it inflicts on people’s finances and the shock it delivers to conventional wisdom.