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Noah Smith

Socialism May Be Just What the Service Economy Needs

Free markets have done an awful job making health care and education affordable.

He really is a socialist.

He really is a socialist.

Photographer: Daniel Acker/Bloomberg

The 20th century represented the triumph of mixed economies over central planning. But the 21st century may turn out very differently because of changes in advanced economies.

Communist states, such as the Soviet Union, Mao’s China, North Korea and so on suffered various degrees of economic failure amid rigid central control of the economy. Meanwhile, countries that relied on government regulation and fiscal redistribution simply to smooth out capitalism’s rough edges -- the U.S., France, Germany, Japan, South Korea -- experienced political stability and rising living standards. Democratic countries that experimented with extensive nationalization of industry or pervasive regulation, such as India and the U.K., struggled until they implemented market reforms. Meanwhile, the spectacular results of China’s own market liberalization are well known.