The breakdown in financial markets this fall reveals the industry at its worst — the single-minded obsession with short-term returns led to some shameful behaviour among lenders, product manufacturers, and advisors — but the exposure of these nearly-fatal flaws should not obscure the good that the industry can, and should, be doing.

The past few months have been ugly ones for anyone that toils away in the financial sector. The hangover caused by its excesses threatens to drive the world into recession. Governments are being forced into politically awkward bailouts to save firms from themselves, and to avoid worse harm for everyone else. Even in Canada, where the fallout has been rather modest, people are losing their jobs, and some firms are struggling to survive. Moreover, the business’ credibility has been shredded.

The industry response should not be defensive: rather, the opportunity to remake the financial sector in a more sustainable, socially useful fashion should be embraced.

While the credit market meltdown has exposed some of the industry’s greatest illusions, and revealed the phantom nature of certain financial “innovations,” the flipside of this episode is that it also demonstrates how critical the basic job of finance really is — without credit, economic growth grinds to a halt.

Furthermore, the road to solving some of the world’s greatest problems — hunger, disease and climate change — runs through the financial industry. While a few of its own innovations have proven rather suspect, the provision of capital is the lifeblood of genuine progress in truly important, inventive sectors such as agriculture, biotech, and cleantech. Additionally, financial ingenuity can create market mechanisms to help deal with social ills. More simply, honest advice at a fair price can help workers save enough to remain self-sufficient.

In the past, the idea that the financial industry could help cure the world’s problems may have seemed laughable. However, amid the crumbling facades of finance, it’s the notion of untrammeled capitalism and ruthless market efficiency that has been exposed as a silly fantasy.

There is tremendous power in the material and intellectual resources of the financial industry. It’s time to start deploying those resources to the greater good, not solely in the service of grotesque personal greed.