In his newest book, Ian Bremmer argues that state capitalism differs from free-market capitalism in that politics rather than profit is the main driver for decision-making. For this reason, it poses a threat to free markets and the global economy.
Capitalism takes many forms, but all of them can be distinguished by their "use of wealth to create more wealth, a broad enough definition to capture both free-market and state capitalism," notes Bremmer. In the free-market form of capitalism, the job of the state is to "enable" capitalism's success by enforcing contracts, as well as by limiting the influence of moral "bads" (such as greed) that can lead to market failures—something that has been occurring at least since the Dutch tulip craze of 1637. Free-market governments ensure that the economic game is played fairly.
In contrast, the economy in state capitalist regimes is dominated by state interest and power. As Bremmer explains, "Forced to choose between the protection of the rights of the individual, economic productivity, and the principle of consumer choice, on the one hand, and the achievement of political goals, on the other, state capitalists will choose the latter every time." To use a sports analogy, state capitalists would control the referees as well as the main players.
Bremmer acknowledges that state capitalism is not new. He traces the first reference to the phrase in a speech by Wilhelm Liebknecht, a founder of the Social Democratic Party of Germany, in 1896. But given recent questions regarding the merits of free markets after the 2008–2009 financial crisis, the need for job growth and economic stability in less than democratic regimes, and the growth of the economies and influence of state capitalist countries, this form of capitalism has gained momentum worldwide. While Bremmer believes the free market will eventually prevail over state capitalism, he foresees tensions between the two systems emanating from differences in incentives, transparency, and accountability.
Grand Strategies: Literature, Statecraft, and the World Order, Charles Hill (New Haven: Yale University Press), 384 pp., $27.50 cloth.
Charles Hill's new work offers an illuminating and incisive look into two realms traditionally seen as distinct: literature and international relations. The book provides a lively historical account of international relations as depicted in great works of literature, and how these literary works affect our perceptions about the nature of statecraft, but it surpasses and defies neat categorization. For Hill the relationship between these two aspects of the human condition is both subtle and mutually reinforcing. He asks us to consider international relations and statecraft as something partially formed by, and likewise informed by, literary works—and, more broadly, the literary imaginary.
Hill's subject matter is a difficult one because, naturally, it is not easy to organize a list of definitive works on the topic. Surely he could have turned Grand Strategies into a multivolume work, or just as easily have written an entire book on the insights to be gleaned from a serious study of Thucydides' Peloponnesian War or T. E. Lawrence's Seven Pillars of Wisdom—both of which are discussed here, along with more than seventy other works, stretching from Homer to Salman Rushdie. What makes Grand Strategies so edifying, though—for those more versed in either politics or literature—is the global perspective engendered by the author's approach. Tracing the genealogy of literary tropes and themes through the ages, Hill shows how these themes exert a subtle but pervasive influence in ordering the minds of scholars, politicians, and diplomats alike. To cite just one example, he convincingly demonstrates the influence of Virgil's Aeneid and Homer's Iliad on Walt Whitman's majestic Leaves of Grass, and the latter work's deep resonance with Abraham Lincoln, whose prose, and person, was shaken by contact with the Good Grey Poet. Multidisciplinary in scope and outlook, the work will be equally fascinating to political scientists, politicians and diplomats, and literary critics.
The Plundered Planet: Why We Must—and How We Can—Manage Nature for Global Prosperity, Paul Collier (New York: Oxford University Press, 2010), 271 pp., $24.95 cloth, $15.95 paper.
In his newest book, Paul Collier expands his analysis of poverty and the resource curse, the subject of his influential The Bottom Billion, to tackle the problem of the mismanagement of nature. He argues that we can save the planet and ensure development and prosperity for the world's poorest countries through an ethical approach to the natural world. Nature is the only lifeline for billions in this world, yet the majority of poor countries have failed to capture its value for the benefit of their citizens. Climate change and the agricultural practices of the rich exacerbate their plight.
The key to addressing the twin problems of poverty and climate change, argues Collier, is to adopt the ethics of custody—an approach that allows extraction of natural resources and industrial emissions but demands that we do so responsibly and with the rights of future generations in mind. Collier thus aims to steer a middle course between a strictly utilitarian focus on growth and a romanticized view of nature that advocates preservation at all costs. Natural assets are an untapped source of wealth for many of the poorest countries. Collier outlines a chain of decisions (from avoiding a gold rush to investing the profits into domestic development) that a government must get right if this potential is not to be squandered or siphoned away.
On climate change, Collier suggests that we think of carbon emissions as a liability, "the natural equivalent of a debt," and price all carbon emissions accordingly. He advocates a common global tax on carbon, which would provide the necessary incentives for the development of new technologies. In turn, this will lower carbon fuel prices and lead to a gradual adjustment to a low-carbon future.
Collier ends on an optimistic note: though prospects for intergovernmental cooperation on such issues as fish stocks or climate change appear slim at the moment, new technologies are creating an ever more informed and connected global citizenry that can hold its leaders to account and press for change. Part ethical treatise, part development manual, part manifesto, the book aims to inform and spur such citizen action. While some readers will take issue with Collier's preference for market based solutions or the political feasibility of his proposals, the book’s accessible language, its lively examples, and the breadth of its discussion make it essential reading for development professionals, government officials, and anyone who cares about the future of our planet.
- The End of the Free Market: Who Wins the War Between States and Corporations? (The End of the Free Market: Who Wins the War Between States and Corporations?)
- The Plundered Planet: Why We Must--and How We Can--Manage Nature for Global Prosperity (The Plundered Planet: Why We Must--and How We Can--Manage Nature for Global Prosperity)