The Origin of Wealth

CHAPTER EIGHTEEN

Politics and Policy

THE END OF LEFT VERSUS RIGHT

THE WORLD of economic ideas has always been linked to the world of politics, and historically, paradigm shifts in economic theory have led to reconfigurations of the political landscape. Adam Smith’s ideas helped inspire a dramatic expansion in free trade in the nineteenth century. Karl Marx’s theories provided the impetus for cataclysmic changes in the twentieth century. The Neoclassical paradigm laid the intellectual foundations of Western capitalist orthodoxy, while Keynesianism tempered that orthodoxy with a role for the state. In the period after World War II, state activism ...