In the twentieth century, the slump of the 1930s was followed by a period in which Keynesian economics, with its emphasis on state intervention and the value of public spending as a means to reduce unemployment, were dominant. An increasingly mixed economy, combining public and private enterprise, was developed. However, since the end of the 1970s, following the state's fiscal crisis and the increasing influence of New Right philosophies, laissez-faire economics is now once more in the political foreground, with writers such as Friedrich A. Hayek (The Road to Serfdom, 1944) and Milton Friedman (Capitalism and Freedom, 1961) providing inspiration. The result has been an increasing privatization of state activities and a return to an all-pervasive market economy. However, despite its impact on government policies, the criticisms of laissez-faire theorizing are powerful, not least because actual markets bear so little relation to the theorists' idealized models of rational, atomized individuals making choices in the market. In the real world, markets are beset by so-called imperfections: there are often monopolies of supply, imperfect information, few purchasers, external constraints, and so forth. Moreover, individuals' preferences are shaped and limited by culture and social norms, so reducing choice. The idea of efficient, let alone equitable, allocation via the market is something of a chimera: it functions far more effectively as myth than reality. See also LIBERALISM; MONT PELERIN SOCIETY, THE.
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