The Archbishop of Canterbury Dr Rowan Williams has spoken up in support of Karl Marx, defending key aspects of his critique of capitalism.

Dr Williams warns that in the face of the credit crisis, the financial world needs new regulation and says that our society is running the risk of idolatry in its relationship with wealth.

In an article in Friday's Spectator, Dr Williams compares today's debtors and financiers to the feckless young clerics and landowners described in the novels of Anthony Trollope. He writes: "Individuals find that their own personal financial decisions and calculations have nothing to do with what is happening to their resources, in a process for which a debt is simply someone else's wholly disposable asset."

Criticising the practices which involve financial institutions selling debts onto each other, Dr Williams says: "It is no use pretending that the financial world can maintain indefinitely the degree of exemption from scrutiny and regulation that it has got used to."

He calls for a basis of "common prosperity" to be established and suggests that other financial practices besides short-selling should also be banned. "Without a background of social stability everyone will eventually suffer," he warns. "Governments should not lose their nerve as they look to identify a few more targets."

Dr Williams says the crisis is underpinned by deeper moral issues, and the connection between money and material reality has to be re-established.

He concedes that entrepeneurs must be allowed to create wealth to help nations out of poverty. But he argues that it is "a sort of fundamentalism" to say that this is the only way.

"Fundamentalism is a religious word, not inappropriate to the nature of the problem," the Archbishop says "Marx long ago observed the way in which unbridled capitalism became a kind of mythology, ascribing reality, power and agency to things that had no life in themselves; he was right about that, if about little else. And ascribing independent reality to what you have in fact made yourself is a perfect definition of what the Jewish and Christian Scriptures call idolatry."

In a separate, video message Dr Williams also pledged the Anglican Communion to continue to work for the eradication of poverty.

Speaking on the eve of the United Nations General Assembly meeting on Millennium Development Goals in New York, Dr Williams said: "Let this meeting in New York be an occasion where the consciences and the hearts of all are truly touched and changed, turned towards the needs of the poorest, turned towards the recognition that we have it in our hands to make a difference."

The Archbishop of York Dr John Sentamu will share a platform with Gordon Brown and Bill Clinton at the UN meeting tomorrow (thurs).

In his prescient encyclical "On Christian Hope" last year, Pope Benedict XVI also addressed Marxist economic theory. "With great precision, albeit with a certain one-sided bias, Marx described the situation of his time, and with great analytical skill he spelled out the paths leading to revolution," the Pope said. "Together with the victory of the revolution, though, Marx's fundamental error also became evident. He showed precisely how to overthrow the existing order, but he did not say how matters should proceed thereafter."

The Pope described Marx's "real error" as materialism: "man, in fact, is not merely the product of economic conditions, and it is not possible to redeem him purely from the outside by creating a favourable economic environment."