Jeremy Warner: Can capitalism ever adopt a conscience? Perhaps it will have to

Outlook Can capitalism ever be socially responsible, or is that simply not part of its DNA? There are lots of fine words and good intentions being expressed here in Davos about the need to make free markets work for the public good – as there always are when capitalism goes through one of its perennial crises. Normally this talk lasts about as long as the conference itself.

Yet this time the crisis is so serious and the period of excess so extreme that bankers and business leaders are duty-bound to respond.

Capitalism is nothing if not adaptable, and in the interests of self-preservation alone markets must this time embrace genuine change.

Stephen Green, chairman of HSBC, put it best when he said that we lost something very precious with the slow shift over recent years of business and banking mentality to one of "anything goes, provided it's legal and we can get away with it".

Nor did he think that regulatory overhaul was a solution in itself to the myriad different failings thrown up by the banking crisis. No amount of rules will enforce good behaviour. Business and finance should seize the opportunity to get things right so as to ensure the continuation of free markets for the benefit of future generations.

Yes, but how? Everyone agrees that things again got completely out of hand during the boom, yet the greed and over-exuberance that drove it are in truth just part of human nature and, though perhaps distasteful, a deeply rooted part of the economic cycle. It is not obvious how you ensure that the natural rhythm of creative destruction which lies at the heart of the business cycle can be reformed so that it always works for the common good.

Tony Blair, the former British prime minister, observed that an old lesson was being painfully re-learned – that the financial system is there to serve the wider economy, and the wider economy is there to serve society at large. Regrettably, it is much easier to define the problem than to come up with worthwhile solutions.

There was real wisdom from Indra Nooyi, the chairman of PepsiCo, who said the worst that could happen is that we start questioning the mechanisms of capitalism themselves, which are above all about generating a surplus, moderated by competition, regulation and ethics.

Mr Green seems to have it about right in insisting that the solution starts at home, with corporations and banks instilling their organisations with socially responsible values that help build sustainable businesses for the long term.

In five years' time, when memories of the last bust begin to fade, can these new values hope to survive the rush to profit? This time, global capitalism perhaps does have to be serious about reform, for it might not get another chance. The markets are widely acknowledged to have failed, but there is regrettably little evidence here of humble pie.

Beyond the good intentions and fine words, the prevailing – though by no means universal – attitude among participants is "let's fix it and start again where we left off". That's plainly not going to be enough this time.