The Public Interest

Trust—but quantify

William A. Galston

Winter 1996

WITH the collapse of communism, and of confidence in command economies, a century-long debate has ended: Markets are now regarded, almost universally, as the principal source of the wealth of nations. But what are the requirements for successful market economies? One typical answer stresses the removal of dead-weight government intervention; another, the construction of key institutions—stock exchanges, banks, impartial legal systems—as reliable frameworks for individual transactions; a third, the circumscribed, but active, use of public power to correct “market failures” in the provision of goods such as job training.

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