There is no iron law that decrees the triumph of the market. Since 1989, economic liberalization has had the upper hand ideologically. American triumphalism has played out against a background of retrenchment in Europe and Japan, and against a wider sense that the regulatory state has had its day and has lost. But this kind of triumph is by its very nature short-lived. It must continue to rely on the success of the American example, and on the willingness of Pax Americana to shore up the global trading system and to keep it going.
Economic ideas are fickle.
No victory in that domain is irreversible, or beyond the power of contingency and performance. It is patently obvious that a good deal of globalization's and liberalization's success has derived from the long and remarkable bull run of the American economy. But as the issue of valuation has arisen once again in the American economy, and as the nasdaq has lost roughly half of its value from its heights in March 2000, the triumphalism has begun to recede, and the faith in markets has given way to a subdued anxiety of reckoning. . . . Inc. All Rights Reserved.