Introduction

At the end of the period of reconstruction of the national economies shattered by the war, income redistribution and discretionary macroeconomic management emerged as the top policy priorities of most Western European governments. The market was relegated to the ancillary role of providing the resources to pay for this government largess, and any evidence of market failures was deemed sufficient to justify state intervention, often in the intrusive forms of centralized capital allocation and the nationalization of key sectors of the economy. Indeed, centralized management and unfettered policy discretion came to be regarded as prerequisites of effective governance.