. . . it is not enough to show that a situation is bad; it is also necessary to be reasonably certain that the problem has been properly described, fairly certain that the proposed remedy will improve it, and virtually certain that it will not make it worse.
- Robert Conquest
A modern market economy cannot exist in a vacuum. Market transactions take place within a framework of rules and require someone with the authority to enforce those rules. Governmerit not only enforces its own rules but also enforces contracts and other agreements; among the numerous parties in the economy. Sometimes government also sets standards, defining what is a pound, a mile, or a bushel. And to support itself, governments must also collect taxes, which in turn affect economic decision-making.
Beyond these basic functions, which virtually everyone can agree on, governments can play more expansive roles, all the way up to directly owning and operating all the farms and industries in the nation. Controversies have raged around the world, throughout the twentieth century, on the role that the government should play in the economy. For much of that century, those who, favored a larger role for government were clearly in the ascendancy. Russia, China, and others in the Communist bloc of nations were at one extreme, but democratic countries like Britain, India, and France also took over ownership of various industries and tightly controlled the decisions made in other industries that were allowed to remain privately owned.
During the 1980s, however, the tide began to turn toward reducing the role of government, first in Britain and the United