12 Market fundamentalism – in the form of light-touch regulation, the belief that bubbles cannot be identified and that markets always clear – contributed directly to the financial crisis and the associated erosion of social capital. Ensuing events have further strained trust in the financial system. Many supposedly rugged markets were revealed to be cosseted: •  major banks were too-big-to fail: operating in a privileged heads-I-win-tails-you-lose bubble;  •  there was widespread rigging of benchmarks for personal gain; and  •  equity markets demonstrated a perverse sense of fairness, blatantly favouring the technologically empowered over the retail investor. 13  Such practices widen the gap between insider and outsider returns and challenge distributive justice. More fundamentally, the resulting mistrust in market mechanisms reduces both happiness and social capital. We simply cannot take the capitalist system, which produces such plenty and so many solutions, for granted. Prosperity requires not just investment in economic capital, but investment in social capital. It is necessary to rebuild social capital to make markets work. This is not an abstract issue or a naive aspiration. I will argue that we have already made a start with financial reform and that by completing the job, by returning to true markets, we can make capitalism more inclusive. What then must be done? There are a wide range of policies to promote inclusive capitalism from early childhood education, training and the importance of differentiated pathways and mixed-income neighbourhoods. These are all fundamentally political issues.

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