The Rise of Free Market Economics: Economists and the Role of the State since 1970

Between 1970 and 2000 there took place a remarkable and dramatic change in attitudes toward the role of the state in economic activity. An ideology favorable to management of the economy gave way to one in which state action was seen as raising more problems than it solved. The role of the market was extended, markets being created by government where they could not evolve spontaneously, and attempts were made to minimize the role of state-organized and state-funded economic activity. Thus nationalized industries were privatized; services provided by the state were outsourced to private contractors; industries were deregulated; taxes were cut; and attempts were made to reduce the level of govern-ment spending. This was much more than a simple change in attitudes toward economic policy: it was a radical shift of worldview, involving a transformation of attitudes across a wide range of the political spec-trum as well as being associated with profound changes in economic theory.1 Inequality in the distribution of income was allowed to rise t