John Bogle, one of the godfathers of the mutual fund industry as founder of Vanguard Group, says the financial crisis of the past 14 months has struck a blow at capitalism.

“It will take a lot to bring capitalism back, because capitalism has been deeply discredited,” he told Bloomberg TV.

“It’s a system based on trust, but the underpinnings of capitalism have changed radically,” Bogle says.

For example, individuals used to own 92 percent of stocks. “Today institutions own 75 percent of all stocks,” he notes.

“And they simply aren’t investing in the same way as if it was their own money.”

Bogle has been amazed at the effect of financial institutions on the real economy during the crisis.

“I thought I’d seen it all until this year,” he says.

“Real human beings have been hurt by the careless and disgraceful things done by our financial sector.”

Societal greed has played a role, he says. “Our society is now a ‘me first’ society,” he points out.

Some experts say the Bernie Madoff scandal proves that the system is indeed broken.

James Cox, a Duke University law professor, told Bloomberg News, “There are just so many people [investment managers] out there who aren't registered that it really just overwhelms the system.”