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.

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Por Jorge Nascimento Rodrigues em 12 Maio An interview with Ian Bremmer, president of the Eurasia Group. It will take place internationally, as we see these competing models create friction in international politics and global markets.

State Capitalism Comes of Age

What was the main reason for the coming back of state capitalism around the world? The rise of state capitalism really began several decades ago with the rise in importance of oil in the global brremmer.

It accelerated with the growth in importance of emerging markets in global economic growth. Ags angry activist response to the global economic crisis—and the fact that the crisis originated inside western financial institutions—provided the real tipping point. An important additional point: China has plenty of money with which to begin financing the next capiatlism of its expansion. Are we assisting to the swinging of the pendulum in economic doctrines?

In other words, the conflict between liberalization and increased state intervention will not take place within these developed states. Or these economic fragmented arguments — for the moment not yet an articulated theory- are nowadays basically a disguise for geopolitics action for certain emergent powers or populist politics for certain politicians? This is a good question.


Cappitalism, this is not a return of socialism. This is capitalism as practiced by the state. In a political context, state capitalism makes sense as a tool for authoritarian governments, because it allows them to micromanage both political and economic challenges that have a direct impact on state stability. But in an economic context, state capitalism is not a particularly efficient engine for long-term expansion. By the way, the financial crisis and global recession have revealed that the lack of regulation of recent years is hardly a durable model for long-term growth either.

There is a delicate balance between these two extremes that policymakers all over the world will have to find. The most surprising of these horsemen would probably be the sovereign wealth funds SWFbecause they rocketed to etate so quickly after having existed as a very small factor in global market performance for many years.

Over-leverage has made them much more influential. Who will gain the race? There is a restructuring underway, and there stxte be clear winners and losers. Of the likeliest winners, China tops the list. Beijing has responded to its economic slowdown with a massive state spending spree, and it has the reserves to do a lot more.

Once China resumes its former growth pace, its large supply of low-cost labor and growing capacity for innovation in higher value-added manufacturing sectors will still be there. As a result, the leadership has proven a major beneficiary of a rising tide of national pride. Major Arab energy producers like Saudi Arabia, the United Arab Emirates Abu Dhabi, not Dubaiand Qatar are coping well with the global slowdown, despite the fall in energy prices since last summer.


For the most part, gulf banks avoided exposure to the financial products that did so much damage in the west, and budget planners in these governments made wisely conservative assumptions about crude oil prices.

Brazil will also re-emerge from the financial crisis with it status as an emerging market power intact. His still high public approval ratings suggest his government will ride out the current crisis capiralism its market-friendly reputation secure. India has several advantages which help limit political risk in the country.

Infighting among key politicians in Ukraine prevents its government from moving forward on implementation of changes needed to ensure IMF help is not delayed. Innovation, and particularly innovation diffusion through the economic tissue, is the engine of growth. But it is poor in the diffusion phase.

Ian Bremmer

The new trend will stiff innovation and growth as the Soviet implosion reminds comrs Over the longer-term, however, technological innovation will have a transformative effect. The rising of state interventionism grows the risk of protectionist policies around the world?

WTO will have a bad time? Email not published Required. Notify me of followup comments via e-mail. Editado por Jorge Nascimento Rodrigues. China tops the list…of the likeliest winners Q: Risks in Russia Q: Greatings, Super post, Need to mark it on Digg Have a nice day. Annan Out 28th, at 4: