The crisis that started on Wall Street in mid‐2007 and that has turned into a global financial and economic crisis is also a crisis of knowledge‐based economies (KBEs). In fact, it is related to intrinsic features of such economies. The central point argued in this paper is the need for a specific knowledge‐based economy perspective on the crisis that takes human nature seriously, i.e. that incorporates psychological factors like Keynes’ ‘animal spirits’. Such a perspective is a pre‐requisite for designing institutions that might be able to reduce the likelihood of the development of severe pathologies of KBEs in future. It also suggests the need for a new kind of welfare economics.