Why Russia and China's markets will overtake the US and free markets (Europe)
24 replies, posted
[B](Reuters) - The Western multinationals that have dominated global trade for decades are going to have their lunch eaten in China and elsewhere, and many are unaware it's about to happen.[/B]
That's the warning in "The End of the Free Market" (Portfolio, $26.95), a new book by political risk expert Ian Bremmer.
Bremmer, known for showing the effect of political turmoil on financial markets, argues that China, [URL="http://www.reuters.com/places/russia"]Russia[/URL] and other emerging markets have developed a new economic model -- state capitalism -- that clashes with the free-market system of the West.
State capitalism is not the rebirth of socialist central planning, he writes. It is a system in which authoritarian states dominate markets primarily for political gain. In the process, they favor national enterprises over foreign competition.
A grasp of state capitalism is essential if Western businesses are to understand its potential effect, argues Bremmer, the founder of political risk consultants Eurasia Group.
Many Western corporations -- Eurasia counts about 100 of the Fortune 500 as clients -- are unprepared for what they face.
"I would say that a quarter of them, max, have China strategies that are sustainable for five years. Of the ones that don't, maybe half are aware of it, and that's a serious problem," Bremmer said in an interview.
"They're going to get crushed," he said, although he noted that the situation is hard to predict beyond five years.
Western multinationals increasingly rely on foreign sales, especially in emerging markets, where state capitalism has many sympathizers. At least half the revenue of companies in the Standard & Poor's 500 Index is generated abroad.
Bremmer doesn't see dramatic Cold War standoffs like the Berlin airlift or the Cuban missile crisis. But state capitalism can have far-reaching consequences, compromising a country's security and the global economy.
Bremmer notes that state capitalism is not an economic model like free enterprise, but a tool elites will use to stay in power.
"(It's) not a formula for producing more efficient or more equitable economic performance," he writes.
Writing before Google's run-in with China in March, Bremmer asks what happens when the day comes that China no longer needs foreign investment to develop and decides to shelter local companies from foreign competition.
Google's decision to close its China-based search service and redirect traffic to Hong Kong underscores a failure to understand the politics behind the spat. It was favoritism of Google's Chinese rival, Baidu, not censorship, Bremmer said.
"Google really believed that they were on the side of the Chinese people against the Chinese government," Bremmer said. "That's ridiculous."
Something else that people have failed to grasp about China is that while the United States clearly has a divided political system, the Chinese people are fully behind their government in China's ascension as a world power, he said.
The subtitle of Bremmer's book is "Who wins the war between states and corporations?" Asked for an answer, Bremmer finds the West still holds advantages in terms of size and resilience, and because China, long-term, looks "bubble-like."
But the jury, he says, is still out.
[url=http://www.reuters.com/article/idUSTRE64R4Y520100528]Here Be Sharks[/url]
Harvard/Yale/Stanford graduate and Socialist economist, Richard Wolff Ph.D, telling it like it is:
[B][I]Capitalism hits the fan (skip to 7:10)
[media]http://www.youtube.com/watch?v=TZU3wfjtIJY[/media]
[/I][/B]
No shit.
I'm up to the point where he's talking about emerging films that keep having unstoppable forces.
So what does that means for all the Westerns in 1950-1970s? Nostalgia?
Wakka, the Communist Glaber.
Wakka here's the problem with Socialism, most workers don't give a shit about equality, they just want more pay.
[QUOTE=MachiniOs;22257666]Wakka here's the problem with Socialism, most workers don't give a shit about equality, they just want more pay.[/QUOTE]
Who doesn't want more pay?
Why do you all hate commies?
[QUOTE=wanksta11;22258571]Why do you all hate commies?[/QUOTE]
Because they will take our jobs and fuck our wives!
As soon as I saw that it was Wakka I knew what to expect.
[QUOTE=MachiniOs;22257666]Wakka here's the problem with Socialism, most workers don't give a shit about equality, they just want more pay.[/QUOTE]
That's just human nature.
I'd rather live in a country that grants basic human rights than in a country with a debatable lead in the world market.
[QUOTE=Led Zeppelin;22258659]I'd rather live in a country that grants basic human rights than in a country with a debatable lead in the world market.[/QUOTE]
Bad luck for you then.
You guys are eeediots. What does this article have to do with socialism?
[QUOTE=wanksta11;22258571]Why do you all hate commies?[/QUOTE]
Because they brutally raped my country for 50 years, and don't have the common sense to issue a public apology.
[QUOTE=Paravin;22261339]Because they brutally raped my country for 50 years, and don't have the common sense to issue a public apology.[/QUOTE]
The leaders of the Soviet Union are dead, who should give issue the apology?
The Soviet Union wasn't really communist anyways.
Does anyone on facepunch read anything any more? Not once do they mention anything concerning socialism or communism. This is about "state capitalism" which is a different thing all together.
Rather than attacking the OP's inclinations, why not discuss what the article is about? I think it doesn't take much to see that Russia and China's policies has thrown in a factor into the international markets which might hamper western ambitions, for good and bad. While this article only covers a book, I think it's something that economists are keeping their eyes on.
The video you guys can say what you want about it. It's bias is expected, it is from the ISR, but some of the criticisms are valid.
How old is this discussion again. Like 30 years ?
This is an opinion piece, and I don't care how educated this guy is.
Don't see how this is any better. [quote]Bremmer notes that state capitalism is not an economic model like free enterprise, but a tool elites will use to stay in power.[/quote]
[QUOTE=Led Zeppelin;22258659]I'd rather live in a country that grants basic human rights than in a country with a debatable lead in the world market.[/QUOTE]
Why not both
I wanted to think this guy had something interesting to say, but then he threw in the part about how state capitalism isn't concerned with efficiency and so on like Western free enterprise.
C'mon! Western corporations are about profit, nothing else. Not 'free enterprise', not 'fair competition', not 'ethics'. Nothing but profit.
That's their advantage. China's leaders will steer China's economic power where they want it, not necessarily where the profit is. Corporate leaders steer their businesses where the money is.
[QUOTE=Jacam12SUX;22258630]That's just human nature.[/QUOTE]
That's just how you're brought up. You were raised here in good ol' capitalia, where things like fascism and killing people for their beliefs/words is evil. In North Korea however, they all love the government.
I'm not advocating fascism, that's just an example of different universes
[QUOTE=ProboardslolV2;22267714]That's just how you're brought up. You were raised here in good ol' capitalia, where things like fascism and killing people for their beliefs/words is evil. In North Korea however, they all love the government.[/QUOTE]
Indeed. The people in Russia prefer an authoritarian leader (IE Putin/Medvedev, mainly Putin) over some pussy alcoholic that destroyed their once mighty country.
[editline]04:39PM[/editline]
Not everyone wants American "democracy".
because they're uneducated?
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