Economists and think tanks round the world have recently been rushing to the defense of capitalism — but a very poor fist they have so far made of it.

Of course it's easy to see that capitalism, broadly defined, has vastly improved living standards in the last hundred years or so and that Karl Marx was wrong about the imminent collapse of the capitalist system. For the majority of people, although not all, the rise in real incomes, and in general prosperity, has been unparalleled in human history. And in most places, but again not all, capitalism, freedom and the rule of law have all ridden together. Who could want to change any of that?

But the trouble is that this analysis is entirely backward looking. Its users are captives of a 20th-century vocabulary. They seem stone blind to the absolutely fundamental changes in the capitalist process that have been brought about by the digital revolution and the network age, and which are still taking place.