INTRODUCTION

In 1980, Ronald Reagan was elected President of the United States on the promise of radically reforming American government by cutting spending and welfare entitlements and improving conditions for private entrepreneurship. For Reagan, American government was akin to an alligator-infested swamp, not only stagnant but dangerous. Thousands of miles away, the Swedish Prime Minister, Olof Palme, in response to a local government's attempt to privatize a childcare center, took a different stance. Palme argued that the introduction of markets would create “Kentucky Fried Children,” the market standing for things American and unhealthy, a threat to Swedish children and the Swedish welfare state.

Nearly three decades later, even after the worst financial crisis of the post-war era, market proponents continue to warn of the dangers of government and to extol the power of “free markets.” In this view, the state, particularly the welfare state, remains something of a swamp, with rigid bureaucracies employing regulations, rules, and routines that frustrate businesses, fleece taxpayers, and alienate citizens. In order to “drain the swamp,” policymakers need to introduce greater competition and private entrepreneurship, with a limited state best delivering for the taxpayer, the user, and the citizen. By contrast, for opponents of markets, the solution is a fully public sector. The public sector is an antidote to the vicissitudes, distributional inequities, and moral corruption of the market.