Poor Bernie Madoff.

Yes, of course, I jest. Bernard Madoff, the confessed author of probably the largest financial fraud in history, a man who victimized not just the rich but also the figurative widows and orphans who were cast on the rocks by the various charities he left penniless, is deserving of scant sympathy. But he will probably end up fortune’s fool anyway, reviled not only for his own massive crime but also as the symbol of a deregulated marketplace whose excesses had very little to do with ­Madoff’s misbehavior.

There is no question that Madoff, a former board member of the National Association of Securities Dealers, has done enough on his own to live in infamy. As an international marketmaker, he ran an apparently legitimate enterprise that acted as elaborate window dressing for a ­bogus investment-advisory business. Madoff the investment guru provided remarkably steady returns to a number of huge Wall Street funds, which, it turned out, he was paying from the increasing pile of capital invested with him by Wall Streeters and others eager to get in on a good thing. Crime is one of the least celebrated arenas of the human imagination, and the sheer art of Madoff’s enterprise, as intricate as an Escher drawing, deserves a perverse kind of admiration.

Madoff gulled his victims by generating ersatz account statements and trade confirmations, not to mention legitimate 1099s in which profits paid with other people’s money were duly reported as income to the Internal Revenue Service. The pyramid scheme worked as long as rising markets provided Madoff’s investors with more and more to entrust to him. But with the crash last fall, his customers needed their investments back. Faced with nearly $7 billion in redemption claims, Madoff is alleged to have confessed to his sons and the Federal Bureau of Investigation that for years he had paid investors with money that wasn’t there.

Crooks, generally speaking, provide an object lesson of limited value. That is because rules and regulations can never fully protect investors from someone intent on breaking them. The astonishing paper trail Madoff created to hide his crimes suggests that he may well be one of those guys who would have gone wrong no matter what. But Madoff will learn that, invariably, timing is everything. As Warren Buffett is rumored to have remarked, “You cannot tell who is swimming without trunks until the tide goes out.” The laissez-faire markets of the Bush era, the greed-is-good eagerness with which everyone went sprinting into Madoff’s trap, and the fact that Madoff’s crime was exposed by the downturn mean that his name is liable to emerge as a convenient symbol of the ridiculous excesses that resulted in a worldwide market meltdown in the last quarter of 2008.

The events of this period will probably be considered as epochal as the fall of the Berlin Wall. The notions that have guided American business for the past 30 years—that free markets are self-regulating, that unrestrained economic activity always leads to the greatest good, that markets are made up of rational actors, the whole Friedmanian megillah—has been exposed. Information is not freely available in our markets; diligent analysis requires too much time and expense for all but a very few and may not even be possible in a financial environment as vast and intricate as the one we have spawned. Wall Street, it turns out, had more lemmings than sharpies. Even the best and brightest bought into collateralized mortgage obligations, credit default swaps, and Madoff’s pyramid scheme. For the foreseeable future, the certificate of deposit may remain the investment vehicle of choice for individuals, and Treasury bills with zero returns the best option for institutions.

Where we go from the post-Madoff, post-meltdown world is the very complicated question for which no one yet has answers. The Obama administration faces massive challenges, but also an extraordinary opportunity, because the assumptions underpinning the American economy have not been as open to restructuring since Franklin D. Roosevelt entered the White House. But one thing is clear: The market should not dictate policy. There remain only a few right-wing nuts who believe that the goal of all governmental activity should be to leave the market alone. Whatever the changes are, they’re likely to be salutary. And, irony being what it is, Bernie Madoff may be one of the guys we have to thank.