This report introduces the new state
capitalism, mainly focusing on China, Russia and Brazil. The article claims that modern state
capitalism represents a significant advance on its predecessors for following
reasons:
“First, it is developing
on a much wider scale: China alone accounts for a fifth of the world’s
population. Second, it is coming together much more quickly: China and Russia
have developed their formula for state capitalism only in the past decade. And
third, it has far more sophisticated tools at its disposal.”
The
state capitalism looks like a coming trend.
Brazil government forced some private companies for being too
independent, French government has set up a sovereign-wealth fund, and South
African government is talking about nationalizing companies and making one a
monopoly. However, there are many doubts
about the state capitalism, how to capitalize on its successes when it wants to
innovate rather than just catch up or questions about how can you ensure a fair
trading system if some companies enjoy the support of a national government and
some don’t.
This
article will go deep into questions about the state capitalism.
4 comments:
It will be interesting to see which countries follow through and pursue the state capitalist system. It would seem, at first glance, that state capitalism could really work for some of the socialist economies, focusing more on capitalism which, as we know, as been the more successful form of economic system throughout history. However, I would be concerned, since state capitalism focuses on a few major state owned businesses or corporations dominating the market. With this more monopolistic way of producing capital, it will be interesting how many countries will, and how they will, play on the strengths of the state capitalism. The profit-seeking nature of this system could be very successful for some of these developed countries
One fear I have with the advent of State Capitalism is that it may lead towards a regression in the opening of markets and the broader globalization that the world has seen since the fall of communism. The further involved states become in their economies, the more likely they are to engage in anti-competitive trade practices which, in the end, only hurt consumers.
But if a few companies are under operation by the state, then the company may make its priority to produce the cheapest goods and services rather than obtaining the most profit. This method could also lead to more intensive care of externalities such as pollution.
I think we have found the catastrophic outcome if a country's government runs the major corporations. Think back to Eduard Duarte and his cautionary tale regarding Venezuela
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