State Capitalism Comes of Age (Foreign. Affairs magazine). The End of the Free Market? By Ian Bremmer. May/June Across the United States, Europe. Member Login · · · Capital Flows · State Capitalism Comes of Age. by Ian Bremmer via Foreign Affairs April 24, State Capitalism Comes of Age. Ian Bremmer. Foreign Affairs. New York: May/ Jun Vol. 88, Iss. 3; pg. 40, 16 pgs. Abstract (Summary) Across the US.
|Published (Last):||3 September 2013|
|PDF File Size:||20.39 Mb|
|ePub File Size:||17.81 Mb|
|Price:||Free* [*Free Regsitration Required]|
No, the free market won’t die.
Bremmer considers the recent sharp turn towards state capitalisk economy as dangerous if it continues too long. Every economy in bfemmer needs in some degree of state intervention and decisive political actions to be cured, but the excessive political measures are proven ineffective simply because of the ineffectivness of central planning. Bureaucrats and social engineers cannot play the role of free market managers. They have no experience in commercial decisions, they often do not care about the property they managed, and they sometimes create crony rings and corruption.
The neo-liberal free market ideology was dominant during the last 20 years of the 20th century, but suddenly, inthis bremmre changed when the United States entered in the biggest financial crisis since The new course of state control over key economic sectors in the U. The West has moved “left,” and this intensified the already existing tendencies toward state capitalism in the developing world.
The coming back of state capitalism
In his essay Bremmer argues that the West is responsible “whether free-market capitalism will remain a viable long-term alternative will depend in large measure on what U. The government of the U.
Instead, profiting from commercial relations with state capitalist countries is iann the United States’ near-term economic interests. For the sake of the United States’ and the world economy’s long-term prospects, defending the free market remains an indispensable policy. And there is no substitute for leading by example bremmsr promoting free trade, foreign investment, transparency, and open markets, in order to ensure that the free market remains the most powerful and durable alternative to state capitalism.
Nowadays state capitalism takes more and more ground over the world: The state penetrates in sectors “as diverse as petrochemicals, power generation, mining, stqte and steel production, port management and shipping, weapons manufacturing, cars, heavy machinery, telecommunications, and aviation, a growing number of governments are no longer content with simply regulating the market, a growing number of governments are no longer content with simply regulating the market,” says Bremer.
When the state takes control over economy, the economy becomes a hostage to political goals. This creates authoritarian political regimes, in which polititians are connected with business elites as is in Russia where the biggest companies are controlled by a small group of oligarchs supported by Kremlin.
The motivations behind investment decisions in state capitalism are political rather than economic. On the international stage in a world dominated by state capitalism economy is not anymore a source for cooperation but a tool for political pressure and conflict. This fact has been proven over the years and the last blatant example was the dispute between Kan and Ukraine this January that endangered Europe’s gas supplies.
Today’s state capitalism exists in countries where the rule of law is weak and corruption is a common practice. In his essay Bremmer prognoses: Managing China’s looming social and environmental challenges will ultimately prove beyond the capacity of bureaucrats; they will eventually realize that the free market is more likely to help them feed and house the country’s 1.
In Russia, faced with a declining population and an economy too dependent on the export of oil and gas, policymakers may conclude that future economic prosperity requires renewed free-market reforms.
Bgemmer United States should reassert its commitment to expanding trade both with the European Union. In the United States and Europethe power of the invisible hand remains an article of faith.
Governments on both sides of the Atlantic know that to maintain popular support, they must keep their promises to return the banking sector and large enterprises to private hands once they have been restored to health. He co-authored The Fat Tail: