subject: There Are Two Fronts Facing Each Other - State Capitalism And Free Market Economy [print this page] There are two fronts facing each other - State Capitalism of China together with Russia and the Free Market economy of America and her allies in Europe. In the background are the emerging economies of countries like India and Brazil that both sides want to capture. The recent financial crisis has placed America on the wrong foot with the emerging countries that are looking askance at the free market economy USA represents.
This scenario has been sketched by political risk analyst Ian Bremmer in his book The End of the Free Market: Who Wins the War Between States and Corporations?
However although Bremmer is an advocate of free market he is not a liberal. He is all praise for Margaret Thatcher to have allowed the privatization of a swath of businesses at that time owned by the British Government. He is of the opinion that China should do the same thing. In the 90s Russia handed over many state run concerns to private hands. But Put in is once more clamping down the long arm of the government.
Bremmer is not a indoctrinated conservative. He contends that USA has to stand joining hands with its allies in Europe - all capitalists facing the threat that can be foreseen. He admits that within capitalism there are differences like line followed in USA and that pursued in the Scandinavian countries and France. Nevertheless USA shares a core understanding with Western Europe regarding the private sector and this should be the engine for fueling growth.
It is this line of thinking that is at the core of formation of the European Union. The attraction towards the free market has made Europe come together in a way that history has never seen. This cannot be said about the nations that follow state capitalism. Bremmer explains that the ruling cream at the top in nations like Russia, China, Venezuela and Russia are the owners of firms with the purpose of furthering political agendas.
Bremmer writes that the elite of these nations following state capitalism use some of the profit money to dole out welfare to the people to keep them drugged and content. They also use the power of their companies to make life and living difficult for their neighbouring countries. The instance of Russia cutting off gas supply to Ukraine can be cited as an example.
According to Bremmer the biggest fear is that the BRIC countries comprising of Brazil, Russia, India and China will leave USA out and do business with each other. It would cripple the economy of USA.
