What went wrong with capitalism and how to fix it : back to basics.

The Efficient Market Theory (EMT) asserts that all the information available to value assets is rapidly integrated into the assets price. J.M. Keynes, likened financial markets to a beauty contest.  This beauty contest model is an explanation for such phenomena as stock market bubbles and why markets tend to err away from any fundamentals.  Minsky argued that  “stability was destabilizing”, that prolonged economic growth generated financial fragility as investors became less risk averse, ignoring the risk part of their profit function in frantic search for yield, irrespective of the risk behind it until markets crashed and brought the music to a sudden stop. Thus, central banks and governments have to regulate financial markets and impose speed breaks to slow down money flows beyond certain fundamental values.  Is the 'old system' bust ?  Can it be fixed or is it to be thrown into the dustbin of history, just like the  old communism system ? by Marwan Elkhoury; (Read the whole article)