DAVOS, Switzerland (AP) ― A four-year economic crisis has left societies battered and widened the gap between the haves and have-nots, financial leaders conceded Wednesday ― with one suggesting that Western-style capitalism itself may be endangered.

As Europe struggles with its debt crisis and the global economic outlook remains gloomy at best, there’s a sense at the heavily guarded World Economic Forum that free markets are on trial.

Many at the elite economic gathering in the Swiss Alps accept that more must be done to convince critics that Western capitalism has a future and that it can learn from its massive failures.

For David Rubenstein, the co-founder and managing director of asset management firm Carlyle Group, leaders must work fast to overcome the current crisis or else different models of capitalism, such as the form practiced in China, may win the day.

“As a result of this recession, that’s lasted longer than anyone predicted and will probably go on for a number more years ... we’re going to have a lot of economic disparities,” Rubenstein said. “We’ve got to work through these problems. If we don’t do in three or four years ... the game will be over for the type of capitalism that many of us have lived through and thought was the best type.”

Some 2,600 of the world’s most influential people came for the forum this week amid increasing worries about the global economy and social unrest due to rising income inequalities.

China has reaped the rewards of its transition to a more market economy and is now the world’s second-largest economy. Unlike the capitalist systems in the U.S. and Europe, China’s market transformation has been heavily guided by a state apparatus that continues to balk at widespread democratic reforms. Latin America, too, has seen success in the development of “state capitalism” in certain industries.

“You combine elements of private enterprise with public responsibility,” said Colombia’s mining and energy minister, Mauricio Cardenas.

Although Rubenstein’s stark appraisal may be an outlier, there was a clear defensive posture among many participants on this opening day of the forum.

There were numerous references to the need to innovate, the need to consult with employees and the realization that power in the world is shifting from the west to the east. While the traditional industrial economies of the United States and Europe have limped through the last few years, often from one crisis to another, many economies in Asia and Latin America have been booming.

But Raghuram Rajan, a professor at the University of Chicago, doubted that the Chinese model was likely to last for too long.

State capitalism, he said, may be good if you’re playing “catch-up” but it reaches its “natural limits” once that’s been accomplished. Others worried about conflicts of interest as the same government officials run the companies and set industry regulations.

Mark Penn, global CEO of the public relations firm Burson-Marsteller, told the Associated Press that “the whole crisis has raised larger questions about how is capitalism working, how do you redefine fairness in the 21st century?”

Many rejected the suggestion by Sharan Burrow, the general secretary of the International Trade Union Confederation, that capitalism has lost its “moral compass” and needed to be “reset.” Business leaders insisted they were learning from the mistakes that dragged the world into its deepest economic recession since the World War II.

Bank of America’s CEO Brian Moynihan said bank excesses in the run-up to the credit crunch of 2008 reflected the economies the banks were operating in, so it is important now that policymakers don’t overreact.

Moynihan, whose bank had to back down on charging a $5 debit card fee after protests by the Occupy movement and others, said banks have “done a lot” to reduce earlier excesses. He also noted that boom and bust cycles are a part of the Western capitalist structure.

Many outside the confines of the Davos conference center disagree, after years of crisis in which hundreds of millions have lost their jobs even as top executives still reap huge pay packets.

Protesters on Wednesday sent aloft big red weather balloons carrying a huge protest banner reading “Hey WEF, Where are the other 6.9999 billion leaders?”

The activists were from the Occupy WEF movement, a small group camping out in igloos at Davos and following in the footsteps of the Occupy Wall Street movement that spread around the world.

Experts said protests must be expected after the excesses of the last decade.

“When you have a financial sector which is a casino, that’s putting at risk taxpayers’ money, you have a reaction,” said Guillermo Ortiz, a former governor of the Bank of Mexico.

Policymakers around the world have sought to rein in the excesses of the banking sector by introducing new regulations requiring them to keep bigger capital buffers, but that’s not done much to appease those voicing their discontent around Davos.

Although some protesters clearly have revolutionary goals like the overthrow of the capitalist system, many just want their aspirations and objectives met by an often-distant political and business elite.

The CEO of accounting giant Deloitte, Joe Echevarria, talked about developing “compassionate capitalism.”

“You’re going to have to deal with regulation ― balancing the need to protect society along with stifling growth,” he told AP in an interview. “I think that has to manifest itself through the choices that governments and businesses make.”

While the bigwigs debated at Davos, key Greek bondholders were holding closed-door meetings in Paris to discuss how ― and whether ― to continue talks central to resolving Europe’s debt crisis that would forgive 50 percent of Greece’s enormous debt.

Later Wednesday, German Chancellor Angela Merkel is expected to speak on Europe’s crisis in her keynote speech at the forum. In an interview with six European newspapers, Merkel drove home the need for reform in debt-troubled eurozone nations instead of spending more to beef up the region’s bailout fund.

Surveys ahead of the meeting showed pessimism among world CEOs, plunging levels of public trust in business and government leaders and concerns that fragility in the U.S. and European economies could hurt the global economy.