It is still too soon to know what effect the storms blowing through financial markets will have on the outlook for the world’s economy. But it is already clear that the turmoil – and the authorities’ response to it – is not merely redrawing the landscape of global finance, but reshaping the political consensus about the right role for government in a capitalist economy.

What is happening in the US is likely to have large implications for economic policy in the rest of the world. That is especially true in Britain, where the scale of the crisis is similar and where successive governments of both Left and Right have extolled the virtues of US-style market economics more enthusiastically than anywhere else.

The financial crisis has strengthened the arguments of those on both sides of the Atlantic who believe that it is time to abandon faith in the efficacy of free markets. But there’s a grave danger, in the political rush to undo the mistakes of the past few years, that governments could push much too hard in the opposite direction and sacrifice many of the gains that markets have made in the recent past.

For a people that like to think of themselves as the globe’s principal defenders of free-market capitalism, the home of rugged self-reliance and devil-take-the-hindmost economics, Americans are starting to look increasingly like a bunch of whining Euro-weenies.

Troubled companies are lining up to plead for help from a sympathetic Government. The bailout of Bear Stearns in March, the de facto nationalisation of the home loan giants Fannie Mae and Freddie Mac earlier this month and yesterday’s frantic efforts to save AIG seem to be profoundly altering the mix in America’s mixed economy.

And it is not just financial companies – which have always held an outsized capacity to cause havoc in the global economy – that are pleading for special treatment. With banks getting help from the Government, the calls from senior executives at the car manufacturing giants such as General Motors are getting a sympathetic ear from Congress.

With its refusal at the weekend to rescue Lehman Brothers, the 158-year-old investment bank, the US Government is trying to restore some impression that the market should still be left to its own devices when necessary.

But one thing is already clear. The US Government is knee-deep in the financial markets in a way that it has not been in many years. The measures taken by the Federal Reserve and the Treasury to support troubled institutions mean that in the future the authorities will certainly have a much larger role in regulating – or even running – large parts of the banking and financial system. What’s more, there is an emerging consensus in the US that at least part of the problem in the past year has its roots in a regulatory regime that was simply too permissive for the health of the economy.

Barack Obama, the Democratic presidential candidate, condemned the conservative regulatory approach once again yesterday. He attacked his Republican opponent, John McCain, as having been “part of the problem” for 20 years or more. And he suggested that the Democrats, if they won in November, would push for a rollback of much of the financial deregulation of the past two decades. But even Senator McCain suggested that he, too, would push for “comprehensive legislation” if he won.

If this is the bipartisan mood in the US, the debate in Britain will also shift markedly. You could argue that Britain has been even more hands-off in its approach to the regulation of business. After the collapse of the Enron energy company in 2001, the US passed legislation designed to tighten accounting rules. Britain benefited from those changes as companies fled the US to avoid the new rules. And critics say the Financial Services Authority has been insufficiently aggressive in clamping down on malpractice.

This could have important implications for political competition in Britain. Though Gordon Brown’s Government will, like George Bush’s, presumably take most of the blame for the failures of the past few years, the political Zeitgeist surely seems to favour the left-of-centre party rather than conservatives. Even under the modernising David Cameron, the Conservative Party has argued that the economy would work better if markets were freer rather than more constrained. If the Anglo-Saxon political consensus is shifting towards more government intervention, higher taxes, and more regulation, the political consequences are uncertain.

The big danger in all this is that politicians will overreact to these turbulent times.

For all the ills of the past year or two, the fact remains that the global economy has enjoyed extraordinary growth and prosperity in the past 30 years. Three key trends have been behind this dramatic advance: restraint in the rapid growth of taxes and government spending; the freeing of business from bureaucracy, regulation and red tape; and the rapid growth in free trade.

Each of those advances is now under serious threat. Government spending has been increasing sharply almost everywhere. The tide of deregulation seems to be receding. And some of the pain associated with globalisation is undermining support for free trade, especially in the US.

The excesses of the past ten years in financial markets certainly call for much tougher scrutiny and tougher enforcement of rules by the authorities.

But the danger is that, in their efforts to address those excesses, politicians on both sides of the Atlantic could throw away the remarkable gains that capitalism has brought.

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