Another similarity of Brexit and Trump's campaigns was an attack on so-called elites. This is not so much a failure of capitalism as of its high priests in the economic profession, for which we must all take some responsibility.

Brexit and Trump have brought the problems of capitalism into sharp relief, but both are only making things worse. Take the investment challenge - businesses invest where there they see technological or market opportunity.

Companies prefer to put money in the pockets of shareholders or to hoard cash rather than to raise wages or invest.

The globalized nature of production and innovation means that the benefits don't necessarily stay in the country where the investments are made.

Real median household incomes in the U.S. were basically the same in 1989 as in 2014. But we are also seeing similar challenges in the U.K. in the stagnation of real wages.

If we look at the complexity of the challenges facing western societies today, we see that the problems are not really about outsiders, but have their roots much closer to home.

Mainstream economic theories popular in the last several decades have tended to downplay the government's role in markets and to increase skepticism about even that more limited role. Austerity, particularly in Europe, has added to the problem. It has not worked, even on its own terms.