Sunday, January 29, 2012
State Capitalism: A Viable Alternatives ? - Debate on the The Economist
link to the article here
In class we learned about some different variations of the two extreme models of economic systems: Capitalism and Socialism. Interestingly, there is a current debate in The Economist about whether State Capitalism is a viable alternatives for the US.
Basically, State Capitalism is usually described as profit-seeking activities undertaken by the state with management of productive forces in a capitalist manner. So as we can see, state capitalism is nominally socialist.
Currently there are two sides of the debate. Representative of the motion that opposes the proposal succinctly stated: "State capitalism is not simply an economic system. It is a political invention designed to ensure that market activity and wealth serve the interests of the state and those who run it. This is the primary reason that it will not become a viable alternative to liberal capitalism"
And the defender of the proposal stated: "State capitalism is not just a command economy ran by authoritarian elites. Democracies and autocracies follow the model. There is not one single political system within state capitalism and no single model of influence on the economy"
These sentences are just the beginning of the debates, and there is a lot more on the web. It is really interesting to see the arguments of the two sides. It is also interesting to see that there are far more people believing in State Capitalism than those who do.
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3 comments:
State capitalism provides a unique solution to many of the problems we are beginning to face in society. The fact that so many costs are externalized while operating under the current model leads me to believe that state involvement may be one of the only solutions that can effectively temper the situation. I only hope that it does not serve the limited interests of those with power and influence.
While free market proved to be the most efficient economic system, I think that some characteristics of state capitalism are necessary. As we discussed in class certain crucial industries and spheres need government control (postal service,electric industry,etc.)in order to keep consistent uninterrupted service. Also some industries require government control, especially monopolies.
Even though state capitalism definitely has certain advantages over our current system, the feasibility of such system happening is rather small. The social stigma of anything, even loosely, related to state management is too radical that such change may be accepted.
Hao pointed out that there are more supporters than oppositions in the debate. However, since the readers and poster of the Economist tend to be the more educated and economic guru and is not at all a good reflection of American population, this point provides us little practical information.
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