State Capitalism versus Free Markets

The Washington Times (Washington, DC), June 29, 2010 | Go to article overview

State Capitalism versus Free Markets


Byline: Doug Bandow, SPECIAL TO THE WASHINGTON TIMES

How quickly the world can change. In 1989, communism collapsed across Eastern Europe. The Berlin Wall, the most visible symbol of communist totalitarianism, fell without a shot being fired.

People spoke of the end of history. The entire world would be democratic and capitalist. Even China seemed destined to join the Western camp.

In the fall of 2008, it was capitalism that appeared to stagger if not quite collapse. Much of the world moved away from free markets toward state capitalism if not socialism. Today, China offers that model as an alternative to capitalist America.

In The End of the Free Market, Ian Bremmer offers a realistic yet optimistic discussion of today's competition between free markets and state capitalism. Although the total victory once envisioned for democratic capitalism looks far away, free markets will prove to be more flexible and resilient over the long term.

The collapse of communism was a moment of enormous human liberation. All of the formerly socialist societies looked west for answers.

However, liberty is good for individuals, not ruling regimes. Notes Mr. Bremmer: Authoritarian governments everywhere have learned to compete internationally by embracing market-driven capitalism. But if they leave it entirely to market forces to decide winners and losers from economic growth, they risk enabling those who might use that wealth to challenge their political power. This is one reason China consciously sought to avoid the Russian experience by maintaining political control even while liberalizing economically.

Democracy has made progress, but there is more to liberal society than occasional elections. As Mr. Bremmer explains, there is plenty of gray area between Norway and North Korea. Freedom House counts 121 democracies but a quarter of them are not free. The Economist Intelligence Unit cites 30 full democracies, 50 flawed democracies, and 87 hybrid democracies or authoritarian states.

Similarly, capitalism has advanced, though not as victoriously as once expected. The meme no longer is globalization sweeping all before it, effectively flattening the world's once diverse landscape. Mr. Bremmer writes: The power of the state is back. Over the past decade, a new class of companies has pushed its way onto the international stage: enterprises that are owned or closely aligned with their home governments.

Of course, there is nothing new about either authoritarian government or state economic meddling. Mercantilism once dominated European politics. Although that philosophy has been discredited, Governments are again intervening in their economies to promote declared national interests, and they have found subtler and more effective ways to practice protectionism, notes Mr. Bremmer.

The tools of state capitalism are many. National energy companies are a favorite; nominally private concerns acting as national champions are another. Sovereign wealth funds have become a common means for states to invest wealth garnered from natural resource sales.

China and Russia are premier practitioners of state capitalism. Other examples include the United Arab Emirates, Ukraine, Algeria and Brazil. Even India, which has moved toward free markets while preserving democratic norms, remains poised between the state-dominated economic model of an earlier era and one driven by private enterprise, writes Mr. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

State Capitalism versus Free Markets
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.