John Gray (who, as is well known was once some kind of adviser to Thatcher) puts it better than I can:
'Even in its heyday it (the free market) was a misnomer. It was created by state coercion and depended at every point in its workings on the power of government. By the First World War the free market had ceased to exist in its most extreme form because it did not meet human needs-including the need for personal freedom... The free market that developed in Britain in the mid mid-19th century did not occur by chance. Nor contrary to the mythic history propogated by the New Right, did it emerge from a long process of unplanned evolution. It was an artefact of power and statecraft. In Japan, Russia, Germany, and in the United States throughout the decades of protectionism state intervention has been a key factor in economic development... Free market governments model their policies on the era of laissez-faire-the mid-19th century period in which government claimed that it did not intervene in economic life. In reality, a laissez-faire economy-that is to say, an economy in which markets are deregulated and put beyond the possibility of political and social control-cannot be reinvented... In nineteenth century England , the free market ran aground on enduring human needs for economic security. In the 20th century, the liberal economic order perished violently in the wars and dictatorships of the 1930s. That catacylsm was the precondition of post-war prosperity and political stability. In the 1930s the free market proved to be an inherently unstable instiution . Built by design and artifice it fell apart in confusion and chaos.'
