Before the current economic crisis exploded, most Asian policymakers and intellectuals believed that when it came to the theory and practice of economic development, the west knew best. This conviction was justified. For two centuries or more, western economies had far outperformed their own. Asian economies only began to perform well when they accepted and implemented Adam Smith's theories of free-market economics.

However, when the crisis led to a global recession, with severe downturns in several major western economies, many Asians began to question their belief in western competence. An important distinction needs to be stressed here: while Asians have retained their faith in western theories on economics, they have progressively lost faith in western practices of economic management.

For example, many Asians are genuinely bewildered that a great mind such as Alan Greenspan could believe that derivative traders did not need any regulation. In 2003, the then chairman of the US Federal Reserve said: “The vast increase in the size of the over-the-counter derivatives markets is the result of the market finding them a very useful vehicle. And the question is, should these be regulated?” His answer was that the state should not go beyond regular banking regulation because “these derivative transactions are transactions among professionals”.