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It's a pain in the ass to write functional code in python because the syntax is not optimized for it. A functional programming language makes lambda and (partial) application as cheap as possible, which Python does not.

I think you can get 95% of the benefit of FP just by favoring abstractions which present a functional interface. Python hasn't really gotten in my way, in that respect, though it would be nice to have first-class persistent data structures with structural sharing.

is coconut used in production? seems like a really bad idea?

It's python after all, so why not?