A timely and relevant analysis of the post-Communist world that seeks to explain the fall of Communism and, perhaps without intending to do so, drops an intellectual bomb into the budget debate in the US. Lord Skidelsky (Political Economy/Warwick Univ.; John Maynard Keynes, Vol. II, 1993, etc.) adapts his book's title from that of Friedrich Hayek, who predicted that collectivism would lead to serfdom. Skidelsky agrees, calling collectivism ``the belief that the state knows better than the market, and can improve on the spontaneous tendencies of civil society . . . the most egregious error of the twentieth century.'' That collectivism has affected states everywhere--including the West, where it takes the form of increased government spending. In 1960, the governments of the main industrial countries spent, on average, 30 percent of their GNP; by 1985 this was 47 percent. The result, as Hayek predicted, was inflation, growing unemployment, and a sharp reduction in growth rates. Skidelsky traces the growth of this collectivist urge (and, in an interesting aside, notes that regulation is ``a potent source of collectivist creep. . . . It is perhaps the characteristic form of collectivism in the United States''). He rejects the association of Keynesian policy with inflation and socialism, linking Keynes rather with Hayek, Beveridge, Popper, and Schumpeter as liberal thinkers who helped to destroy intellectual support for collectivism. None of them would have succeeded, however, without the actions of Reagan and Thatcher, and the characteristically Anglo-American individualist reaction against the failures and excesses of government. Most provocative is Skidelsky's conclusion that public spending should not exceed 30 percent of national income and that deep cuts cannot be made without reducing the social agenda of the state: ``The collectivist age will not be over until state spending has been drastically pruned.'' One of the most incisive and potentially influential analyses of the implications of the fall of Communism.