In the mid-1970s, Keynesianism came in for criticism in the world of economics, and neoclassical economics -- which sees the market as almighty -- became the mainstream theory. One underlying reason for this was the economic decline of the Soviet Union and other socialist countries.
In December 1991, socialism collapsed as the Soviet Union disappeared from the world map. The media said capitalism had "triumphed" over socialism. This perception prevailed at least through the mid-1990s. Former Soviet republics and East Asian countries promoted, with some success, market-oriented economic reforms. The triumph of capitalism over socialism was clearly visible.
However, capitalism has not won an absolute victory over socialism. The fact is that capitalism over the past decade has produced mixed results at best. Japan, which had been hailed as the most successful of the latter-day capitalist economies, has been locked in a deep slump since 1991. The United States, the paragon of capitalism, has been hit by a series of corporate accounting abuses since 2001. These incidents have exposed "contradictions" in an economy hooked on stock prices.
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