Chapter 1IntroductionWhen Markets Fail
Lecturing in Eastern Europe in the autumn of 1989, I was asked in a reproachful way why I did not urge the economics of Professor Friedrich Hayek as the alternative to the economic system there so obviously failing. I replied that this was not a design which, in its rejection of regulatory, welfare, or other ameliorating actions by the state, we in the United States or elsewhere in the nonsocialist world would find tolerable.
John Kenneth Galbraith
The end of the 1980s and the early 1990s marked a victory for democratic society around the world. Dictators in...