New York is no longer viewed as the financial capital of the world, or even of the United States. Given the recent government intervention in states' economies, will the free-market model be able to compete?
In Foreign Affairs, Ian Bremmer states, "Until very recently New York City was the world's financial capital. It no longer is even the financial capital of the United States. That distinction now falls to Washington..."
Most Americans see this government intervention as necessary, and many hope that this intervention will ebb as the economy rebounds. Some also see this as an opportunity to redress health care, income distribution, or environment issues.
First, should state capitalism in America exit as soon as possible? George Will's op-ed states it should but unfortunately won't.
Second, Bremmer sees this tide of intervention in the developing world as "signaling a strategic rejection of free-market doctrine." "(T)he free-market tide has now receded." "(S)tate capitalism has introduced massive inefficiencies into global markets and injected populist politics..."
Therefore, the underlying dynamic for the next decade will be the competition between state capitalism, particularly of China and Russia, and free-market models led by Western companies and the US.
So, will state capitalism dominate the developing world?
What do you think? One, will Washington recede? Two, can the western model compete? Three, should we worry?
By William Vocke, citing Ian Bremmer, "State Capitalism Comes of Age: The End of the Free Market?" Foreign Affairs (May/June 2009) and George Will, "Capitalism Goes Out of Tune," The Washington Post
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