The meltdown of Asian bined with a high- profile hedge fund failure at home, has revived the familiar charge that capitalist greed and pervasive market failure are the sources of economic crisis. What happened to Asian economies and one hedge fund has e a metaphor for the systemic moral failings of capitalism itself.

“It is beginning to be accepted that global capitalism is in serious trouble,” writes John Gray in The Nation, echoing sentiments widely shared on the political left. In apocalyptic tones, he predicts ing “breakdown of global laissez-faire.” Even more bluntly, the editor of the National Catholic Reporter wrote recently that given this year’s events and the plight of the poor everywhere, “one thing seems clear to me: Capitalism doesn’t work.”

Both editorials are symptomatic of a resurgence of old-fashioned anticapitalist moralizing, consisting primarily of flawed economic analysis and a generous dollop of redistributionist ethics. Their solutions are predictable: They desire more regulatory control and redistribution of the world’s resources by means of government policy. It is an old story but with a postsocialist twist. Clearly, the left (secular and religious) is hoping that recent financial troubles will serve as a rejoinder to everyone who crowed about the failure of central planning after 1989.

The problem is that it requires ideological blinders to regard the Asian meltdown and the failure of a hedge fund as a crisis of capitalism. These events have explanations having to do with mundane issues of money and finance. For example, the investment strategy of the hedge fund Long-Term Capital Management was based on a mathematical model formulated to notice small yield and price discrepancies in bonds and currencies, with programmed buying and selling based on certain assumptions about the future. The model was constructed based on historical patterns that held well for two years, generating returns in upwards of 40%.

It so happens that not all price patterns from the past hold in the future, contrary to the assumptions of the model. In the dark days of August and September, when the prices and yields took a wholly new turn, the risk that earned the firm such spectacular profits came back to devour it.

What we see in this case is not institutional failure but human failure. Successful investors sometimes forget that the future cannot be known with certainty by anyone. It is a peculiar trait of human nature that we are, time and again, inclined to believe that our ignorance can be e.

There is nothing wrong with speculation, and, indeed, if making good judgments about an unknown future helps coordinate economic maladjustments, that is all to the good. The problem arises when arrogance tempts us to believe in our own infallibility. It is this very hubris that leads some intellectuals to embrace the folly of central planning.

What does any of this have to do with corporate greed or the failures of the capitalist system? Nothing. Critics who say it does have confused human error with a social structure of sin itself. What is needed is to focus the penalties for getting carried away more particularly on those firms that are responsible. This is the system called profit and loss, one that has promised in an age of bailouts and loan guarantees and investment houses that are declared too big to fail.

No economic system can rid the world of human fallibility, and none should try. But major elements of the Left have not yet accepted the reality that the market economy, whatever its flaws, is no longer merely an option. It is not capitalism that is in crisis but the remnants of state planning, which those on the left still defend with such misguided moral passion.