Paul asks lefties a question: is the crisis one of managerialism or neoliberalism? I'd answer: both.

The proximate cause of our current troubles is the failure of managerialism. The banking crisis shows not so much that financial markets fail but that organizations do so. There are three (non-exclusive) ways of reading the banking crisis, all of which represent a failure of management in some sense:

- Banks did not understand the risks they were taking in mortgage derivatives, relying upon wholesale finance or taking over ABN Amro.

- There was a principal-agent failure. Either regulation failed, or shareholders failed to rein in CEOs, or CEOs didn't appreciate the dangers their trading risks were taking.

- Banks' business models failed to adapt to the new conditions of the 00s, in which saving was concentrated among Asians rather than westerners and in which there was a demand for safe securities.

However, you read it, the crisis shows that managerialism - the idea that some people have the capacity to control large organizations for the better - is wrong. Managerialism is an ideology justifying big pay for bosses, not an empirical truth.

However, in two other senses, the highlights a failure of neoliberalism.

First, the deep cause of the banking crisis was a dearth of capital investment. In a parallel universe, the high Asian savings rate would have had a happy ending. In driving down bond yields, it would have encouraged western firms to invest in new plant and technology thus making us all richer. But it didn't. Because of the lack of investment opportunities, the savings glut was invested in the housing bubble, which burst.

I say this represents a failure of neoliberalism because neoliberalism told us that if only labour and product markets could be deregulated, (some) taxes cut and profits increased, that investment would follow. From the 80s onwards, the UK and US governments followed this advice to some degree - but investment did not follow. Neoliberals had too much faith in entrepreneurial spirits.

Secondly, the banking crisis - and the euro zone debt crises - are crises of risk-bearing. The neoliberal case for financial deregulation was that it allowed risk to be parcelled up and so be bought by those best able to bear the risks. But this was wrong. Risk ended up being concentrated in the hands of a few banks, with the result that quite small losses had terrible macroeconomic effects.

Now, you might think that one implication of what I'm saying is that the left needs alternatives to both managerialism and neoliberalism. It does. The problem is that the left's alternative to neoliberalism (insofar as it has one) often seems to lie in a call for just a different type of managerialism - top down control by a group of people whose confidence exceeds their ability.