Heretics in the Marketplace

1.
In 1992, Francis Fukuyama’s The End of History and the Last Man landed on the bestseller lists like a kind of coda for the Cold War. Long before the Berlin Wall fell, collectivist systems from China to Latvia were giving way to market-oriented systems; when the Soviet Union finally closed shop in 1991 it was more a ratification than a revolution. So, it seemed, ended the long historical argument over ideal social arrangements, which had found terminal equilibrium in Western liberal democracy.

I recall reading Fukuyama with a kind of smug complacency, not an unreasonable sentiment given the context: I was living in Hong Kong—revered by Milton Friedman and libertarians everywhere as a perfect laboratory of unfettered markets—and working for the Far Eastern Economic Review, a now-deceased sister publication of The Wall Street Journal, where you checked any regard for government at the office door if you knew what was good for you.

Over time, however, inconvenient facts intruded. It turned out that Hong Kong’s government does quite a lot, from providing housing for about 60 percent of the population to owning virtually every square foot of land in what was then a British colony (today a Special Administrative Region of China), while guaranteeing what amounts to universal healthcare. This