The Politics of Free Markets: The Rise of Neoliberal Economic Policies in Britain, France, Germany, and the United States

Extract

The Politics of Free Markets: The Rise of Neoliberal Economic Policies in Britain, France, Germany, and the United States. By Monica Prasad. Chicago: University of Chicago Press, 2006. 280p. $57.00 cloth, $23.00 paper.

This is an ambitious book, and an important one. It asks one of the key questions of contemporary political economy: how to explain the rise of neoliberal economic policies in advanced industrialized countries. It answers this question by considering the rise of neoliberal policies in four countries—Britain, France, Germany, and the United States—in three policy areas—taxation, welfare, and industrial policy. Although the book's main focus is on important moments of policy change in the 1970s and 1980s, it considers these in the light of the preceding postwar period and uses them to illuminate more recent events. It notes that although in retrospect it may seem natural that the United States and the UK would have become neoliberal and France and Germany not, this was not at all obvious at the time. Much the contrary, since both the United States and the UK in the 1970s had more progressive tax policies, more egalitarian welfare states, and more anti-business industrial policies than France or Germany. The puzzle, then, is how to explain the transformations in all four countries, which left the United States and the UK much more neoliberal in tax policies, less egalitarian in welfare states, and arguably more pro-business.