Sunday 7 July 2013

US Lobbyism Against China's State Capitalism - Two World Powers with Inverse Problems

For too long the Washington Consensus overshadowed and concealed the complexities of capitalism. The myth of the free market, a market that regulates itself and creates harmony and wealth for those who are willing to work hard for success, was repeated over and over again by mainstream economics and politicians after the end of the Cold War.

That this simple tale of an 'invisible hand' that harmonises human society through market forces is nothing more than a theoretical construction, was shown by the financial crisis and all the contradictions it brought to light. The case of China is in this respect a good example of how an economy can thrive if it is supported by state intervention. The world's second largest economy is not a country based on free market, but on a mix of market and state control.

Yet in both the US and China, state and market are interrelated in a way that poses many a threat to their present and future. In the following piece, Ian Bremmer analyses the many unsolved problems the two giants face, and how state and economy are entangled, but in very different, if not opposed ways. 

As protests sweep the developing world and Europe struggles through an austerity hangover, China and the U.S., relative to their peers, look like the best in class. They are both comfortable with their modest growth rates (compared to their norms of the past decade), and insulated from the kind of social unrest we are seeing in Egypt, Turkey or Brazil. But both countries have a deeper intractable challenge that will, in the longer-term, get worse. What’s interesting is that they’re the inverse of each other: in the U.S., wealth and private sector interests capture the political system. In China, politicians capture the private sector and the wealth that comes with it.



Buy on Amazon:

Runaway Best Seller

The Oil Vendor and the Queen of Flowers 賣油郎獨占花魁 (English and Chinese Edition) (Classics of Chinese Literature)

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