Four Economic "Models"
In describing this economic map to you, I have identified essentially four different national or regional economic models that are likely to compete for adoption as the "global" model. The first is a generally "capitalistic," free-market system, typified by the United States (and perhaps Canada). The American economy does have its share of social programs and protects certain products (e.g., sugar), but it is essentially liberal, capitalistic and free.
The second system, best typified by the current European Union, also is capitalistic, but with a much larger dose of socialism. I call it macro- managed. The people are taxed heavily and governments provide extensive benefits for heath, education, unemployment, and the like. EU governments also operate a range of businesses (air, ship and rail travel, telephone, energy) that generally are privatized in the United States. There also seems to be an antipathy towards very large business enterprises that might threaten government control or laborers' rights. The EU's common market works reasonably well as an internal customs union, but a high price is paid for its large bureaucracies, numerous regulations and large social programs. Businesses may not be able to grow to truly efficient sizes or be stifled by inflexible labor agreements. Weaker companies, particularly if they are "national heroes," may be propped up by government subsidies. In other words, the market is not competitive enough to maximize efficiency and must pay a high social tax. Yes, there is a "Fortress Europe."
Japan, once called the only communist society that works, is typical of the third model. Other examples might be Indonesia or Singapore. In this system, government and business collaborate to produce maximum economic outcomes. This may be at the expense of the consumer, however. (In a capitalist system, government more frequently regulates business to