Bank Chaos Opens Capitalism’s New Era: Micklethwait & Wooldridge

There are few better places to consider the past few days of banking chaos than a small room hidden away in Edinburgh’s financial district — not far from where the godfather of free markets, Adam Smith, once lived. The Library of Mistakes is devoted to capitalism’s disasters: You can see a shirt signed by Nick Leeson, the rogue trader who brought down Barings Bank, and a portrait of the legendary American fraudster Charles Ponzi. Old newspapers proclaim government bailouts of long ago while the shelves groan with tomes like “Where Are the Customers’ Yachts?”

The library takes as its motto ...