The spectacular fall of Bernard Madoff, blue chip investment manager, past stock exchange chairman, alleged Ponzi scheme operator, and bearer of a surname which is curiously appropriate for bad puns under the circumstances, may be a business opportunity in disguise for entrepreneurs.

Of course, the Luddites who could never bear the truth about the effectiveness of free markets are using his alleged fraud as an excuse to re-heat their discredited predictions of the death of capitalism. In fact, what we might see is a move towards a new capitalism in which markets are actually more open.

If that sounds too good to be true, follow this line of thought...

Those with surplus wealth have traditionally thought it safest to invest it through the financial Establishment.

No one was ever more Establishment than Bernard Madoff, a leader of New York society, a generous philanthropist, a big donor to the ruling Democratic Party, and a founder of the National Association of Securities Dealers Automatic Quotations (NASDAQ) stock market, who later served as its chairman.

So if investors cannot trust such a pillar of the financial Establishment, who can they trust?

To blame a lack of “regulation” is to miss the point that no one in the history of business was ever more regulated than Bernard Madoff.

Investors should not rely on regulation – it will let them down.

Instead, the lesson they should learn from Madoff is not to rely on Establishment types like him but to invest directly and keep an eye on their investments.

This means more investment in small and medium sized enterprises, with more investors serving on boards of directors, which benefits both parties.

The opportunity here is for entrepreneurs to seek out investors disillusioned by the Madoffs and to convince them to invest in their businesses instead.

The opportunity for politicians and other leaders is to establish mechanisms and laws to encourage that process – and thus renew our free market system.