Mary Riddell, writing in the Telegraph, says yes, it is. She points to the yawning gap between the Davos-world international class of ultra-rich and everybody else, and says this crisis is turning rather quickly into a question of the legitimacy of democratic capitalism:

Despite a pay gap that is widening to Victorian levels, this is not simply another parable of rich and poor, of cupidity and envy, of us and them. Nor, as the Resolution Foundation warns of long wage stagnation for the middle classes and the English bishops rise up against government welfare reforms, is it just a story of social injustice. Excessive pay has become the most potent symbol and proof of market failure. The capitalist model promoted by Milton Friedman and others in the 1970s has imploded, and, for all the pain, the consequences have not yet registered.

Eurozone economies are poised to live or die according to the dictates of the bond markets. Democracy has been over-ridden in Greece and Italy, now run by unelected technocrats already proving to have little traction on the predatory forces unleashed by leaders who thought they could control the monster they had created and nurtured.

The myth persists that the market can be as easily subjugated as it was once let rip. If only, causists suggest, we could repatriate powers from Brussels/ cut red tape/ keep foreigners out, all might yet be well (as Matt Cavanagh of the Institute for Public Policy Research has written, and as leading economists argued yesterday, plans to curb immigration would actually be deeply damaging to competitiveness and growth).

No doubt the Romans, the Habsburgs and the Bourbons also seized on straws to stave off nemesis. That is the manner in which empires fall.

More:

Politicians, terrified of conceding that they risk losing control, are unlikely to admit that, in one respect, Karl Marx was right. Capitalism has been shown to contain the seeds of its destruction. As the Croesus class cash in and the markets dine off democracy, no one dares point out that, from Tottenham to Tennessee, the world may be staring at the end of politics.

In Greek legend, King Croesus was placed on a pyre to be burnt alive. His pleas for salvation were answered by divine forces who ordained a storm so fierce that the fire was extinguished, sparing him to become a wise, if much less rich, adviser. This time round, with the flames licking at democracy’s roots, there may be no such happy ending.

Historian William Anthony Hay examines the case of Italy, a nationwhose politics and political traditions cannot handle global capitalism. Hay asks if it’s possible for a country to be rich and modern but still a failed state:

Italy suggests the answer is yes. Despite its many advantages, including world-class industries and an enviable standard of living, Italy has failed as an organized political community able to exercise authority by mobilizing the consent and allegiance of its citizens. The resignation of Italian prime minister Silvio Berlusconi—and his long persistence in office despite cringe-worthy antics—highlights a pattern that merits recognition. Public institutions lack credibility in a world of tax evasion and lawless enterprises, and Europe’s growing fiscal crisis has brought into the open structural weaknesses glimpsed only occasionally before. The problem lays not so much with the Italian economy as in the Italian state’s inability to get the public behind a reform program to raise productivity, cut expenditures and levy taxes effectively. In short, the government cannot govern.

The crisis of capitalism, then, is a crisis of democratic legitimacy in Italy. I believe we’ve been here before, in the 1930s.