In his article “State Capitalism Comes of Age”, Ian Bremmer discusses the phenomenon of state capitalism which develops in modern society with references to the opposition of this notion to the concept of free markets. Bremmer accentuates the fact that today the idea of state capitalism is predominantly based on the development of the energy market and oil industries. Despite the fact the modern economy of the developed countries depends on the principles of the free markets, there are countries where state capitalism remains the main strategy or model for the successful economic development of the industry and companies within it (Bremmer).
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Thus, Bremmer concentrates on the discussion of the opposition of the models realized in such countries as Russia, China, Brazil, and India with basing on the principles of state capitalism and the model of free markets used in the USA. From this point, Bremmer determines two main economic models which are rather opposite to each other and indicates the idea of state capitalism as the system where the state is not only the political actor but it is also the leading economic subject, and it works with markets for realizing its main political and economic objectives. Thus, the development of the ideas of state capitalism in such countries as Russia, China, Brazil, and India influences the general progress of the global market and forms the peculiarities of the competitive situation within it.
Discussing the notion of state capitalism, Bremmer determines four major factors that form this phenomenon. They are the national oil corporations, state-owned companies, the national leading companies which are privately owned, and the sovereign wealth funds (Bremmer). Those countries which orient to following state capitalism can focus on the national oil corporations and on the state-owned enterprises which are successfully controlled by the government.
Moreover, there is a situation when the private companies in the developing countries become the competitors within the market only with references to the government’s support. In this case, sovereign wealth funds are based on the combination of the political and economic aspects.
Using the example of Russian Gazprom, the author indicates that state capitalism depends on the close connections between the leaders of the companies and the leading positions in the government. However, it is necessary to remember that this approach has several problematic questions. Ian Bremmer determines the major ones which are the decreases of the market competitiveness because of the growth of the bureaucratic tendencies and the focus mostly on the political issues without many references to the decision-making process within the economic field. The author also pays attention to such a threat as the concentration on the elite’s interests according to the political issues which can influence the economic questions and the development of businesses.
To find the origins of the phenomenon of state capitalism, Ian Bremmer discusses its four waves which have an impact on the development of the global economy. The recent progress of the concept is connected with the problem of the global financial crisis. Thus, the two opposite economic models formed as a result of economic progress. Nevertheless, Bremmer concludes that despite the fact two models are actively used today, state capitalism will not be an effective model for the future in the context of the progress of the free market economy and globalization.
Bremmer, Ian. “State Capitalism Comes of Age”. Foreign Affairs 88.3 (2009): 40-55. Print.