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This book should be read by any politician or business person who wants a thoughtful briefing on current economic affairs. And if they are smart enough to know they don't know it all themselves, they will put it down wishing they had Adair Turner as adviser.

Turner is, above all, so sensible. Conflicting evidence is assessed, implications are thought through. In the old days, when the ablest people with these skills joined the civil service, Turner would inevitably have been a permanent secretary at the Treasury.

If you want measured, yet incisive, comment on the economic costs of regulation, the use of market mechanisms to achieve environmental objectives, the economic significance of new technology, or the origins of the Asian financial crisis, you will find it here. Yet the qualities that make these observations so dependable may be less useful when it comes to promoting grand themes. The composition of the picture is not as assured as the detail of the painting. There are three key theses in Just Capital: one is right, one is half right and one is wrong.

The one that is right is that rich states follow different economic models and there is no evidence that one enjoys more sustainable success than another. A decade ago, it was obvious that, since the war, the economies of Germany and Japan had outperformed those of Britain and the US. As growth in these economies slowed, we shifted our attention to the dynamic Asian Tigers. When they were struck by financial crisis, the US became the model for us all.

It seems that economic commentators will soon need to find another hero to succeed Akio Morita, Lee-Kuan Yew and Alan Greenspan.

It is time they stopped drawing a line through last week's trend and projecting it for decades ahead. Perhaps Turner could begin by having a word with his colleagues downstairs at Merrill Lynch.

He is right to emphasise that the similarities between the performance of the major economies are far more important than the differences. And he's right to draw the inference that we have choices about economic policies. We can have higher environmental standards and wide-ranging employment rights, if these are the policy choices we make. We can choose higher standards of public services, or lower taxes.

Some of these policies have costs, but they are costs that rich economies can easily bear if they choose to do so. It is rarely true, in a well-run market economy, that there is no alternative.

Turner is half right in his ringing denunciation of the pursuit of national competitiveness. As director-general of the CBI, he had to conceal his impatience at business lobbyists who used the slogan of 'competitiveness' to identify the interests of their own firms with the interests of the country as a whole. The benefits that an individual firm might derive from a lower exchange rate or from cheaper fuel would generally have to be paid for by someone else's business.

But that does not mean, as he claims, that only firms, not nations, have competitive advantages, or that governments can do nothing to promote these national competitive advantages. Indeed, the Government has done well at sorting the wheat from the chaff in that debate. But it has done a less good job of defining a 'third way'.

While fashionably sceptical about the third way, Turner has a wrong view of what it might be. He is anxious to distinguish a political sphere, in which compassion and concern are paramount, from a market economy, in which self-interest can be pursued. The job of government is to wind up the motor of capitalism, and then let it rip.

But the required schizophrenia is impossible to manage. We cannot separate our business ethics from our personal and potential morality. You cannot be a beast in the boardroom and a concerned citizen at home. The task for 'third wayers' is to find a set of common values that legitimise a market economy but still meets proper demands for fairness. Without that, capitalism will be undermined, not just by demonstrators in the streets of Seattle but by its failure to attract support from the mass of ordinary, decent people.