Markets and Pseudo Markets; D. Boudreaux

421 Markets and Pseudo-Markets by Donald J. Boudreaux T he 1980s will be remembered as the dec ade in which "the market" gained a de gree of respect worldwide that it never had or that it had only many decades ago. Most obviously, the overthrow of Communist regimes throughout Eastern Europe during the final months of 1989 holds promise for significant eco nomic reforms that will introduce market mecha nisms into those economies. Recent election results in Nicaragua, and current political maneu verings in the Soviet Union, also suggest that a continuation down the path toward freer markets is likely. Obviously, classical liberals should be pleased by these developments. More time-tested reforms have taken place in the English-speaking world. In Great Britain, Margaret Thatcher's program is an attempt to restore the market in that nation. And, of course, the United States in the 1980s was the Reagan era-a period in which "the free market" lost its vulgar connotation in the popular mind.

Although Thatcher's and Reagan's efforts de serve praise (especially when compared with the possibility of a continuation in the 19808of 19708 type policies), that praise should be only mild. The changes brought about were neither as extensive as those promised in the late 1970s and early 19808, nor as permanent. Of course, Thatcher and Reagan faced political realities that made it extremely dif ficult to do more than bruise government on its lit tle toe; any attempt to cut off an arm or leg of gov ernment almost certainly would have resulted in the loss of Thatcher's or Reagan's political head. It is a common theme that opponents of government intervention seldom win in battles with politically Dr. Boudreauxis studyinglawatthe Universitya/Virginia. entrenched specialinterest groups. It is also a com mon theme among classical liberals that ideas do matter and that long-run victory for the market is possible only with a fundamental change in the way people think about the role of government as com pared with the role of the market.