Home > Free Essays > Economics > Influences on Political Economy > The end of the free market
Rate

The end of the free market Essay (Book Review)

Exclusively available on IvyPanda Available only on IvyPanda
Updated: Nov 21st, 2019

Introduction

Having experience in the political and economic fields for many years, Ian Bremmer can be considered to have strong evidence in his extensive research on global economy. In this book, he tries to address the current economic crisis by answering questions such as; can state capitalist compete with free market? Does capitalism still exist or is it going to extinct? Are we still in an economic cold war? His key players are the Men and women who govern Russia, China, Arab, and the United States (Bremmer IV).

About the book

In the first half, the writer is devoted to explain what capitalism is. He describes the birth of capitalism as a replacement of fallen communism regimes of China and Russia. He discusses how today this model has become an attractive package to countries such as China, Russia, US, Saudi Arabia, Algeria, Ukraine, India, and the United Arab Emirates.

The second half gives a detailed support and effects of state capitalism on market economies. Although he really convinces the reader that he is not against state capitalism, he actually cautions about it. According to Bremmer, the power in politics controls this type of economy. Instead of formulation of policies that are based on the needs of the people, the decisions are approved and implemented politically.

Recommendations

Overall, Bremmer’s engagement is excellent. He is clear on his advantages and disadvantages of state capitalism and creates a good understanding of world politics. From a review, the test rating and analysis of this book can be addressed by the following recommendations.

The book can be highly recommendable to even persons without knowledge about economies .Ian’s coverage is realistic, simple, broad, lucid, and well judged. The book does not leave behind any unanswered questions on globalization. Its briefing is excellent and narrates the sequence of events from the rise and fall of communism to the effects of capitalism.

According to Bremmer, capitalism is a disguised monster in the free markets whose goal is to have political gain. He argues that the cause of all these selfish gains is globalization that acts as a catalyst to international politics and markets. He notes that capitalization has different forms distinguished by their own interests and the degree of government support.

First, he talks about the free market capitalism (Bremmer 13). In this type of economy, involved parties use wealth to build more wealth. The state enables generation of wealth through enacting contracts that are limited to moral weaknesses. In contrast, he talks about the state capitalist economies. This type of regime is dominated by politics and the choice of the principal consumer.

Book report

With the fall of the soviets in the nineties, political and economic analyst proclaimed victory over communism to create a new free market economy. However, Bremmer admits that no liberation has followed yet. It is just that the system has incanted. Capitalism is not new in the world as admitted by Bremmer and traces its root back to 1896.He references this year from the speech made by Wilhelm Liebknecht, the leader of the social democratic party in Germany.

He looks upon the state capitalism as an extremely huge threat to the economy of the United States. This is one point that we can all agree on. Notably, there is a huge similarity between what the writer tries to explain as state capitalism and the history of the US economy.

Nevertheless, does it mean the US government grew out of selfishness and greed? Many tend to oppose this but it is what Bremmer is trying to explain. Countries that used state capitalism take up the larger section of the pie in the global market. Among them are the European Union and the US. According to Bremmers report, they actively applied state capitalism during their development.

The approach is a real threat to the global economy since it is really making the extinction of free market policies (Bremmer 54). However, the political greed of these governments has left the citizens of the countries at the mercy of international investors. Bremmer goes ahead to show how wide capitalism is. All that makes it take different forms is the degree of government involvement. Other forms include the free market capitalism, mixed economy, and the social market economy.

To expound on his research, Ian points out Adam smith who is the man behind the development of capitalism in the world. According to Adams, in pure capitalism, everyone does what is best for him or her.The government too minds its own business and never enforces laws. He compares it with a football game that has no referee or a game with players playing with no specific goal.

Adams creates the theory of the ‘invisible hand’ to explain the balancing force in economies. In reference to the theory, the hand is operational. No interference from the government and leaves it to the market to take its own decisions in the free market system. Bremmer sees this as a potential threat not just to his government but also to the world. However, his exceptions to this threat are given for India, China, and Russia (Bremmer 103).

However much Bremmer confesses not to be against state capitalism, his opinions about this kind of economy is very negative through out the chapters. He reflects this type of economy as a project whose goal is to have selfish gains. Here the ‘invisible hand’ is the government and takes control of all economic activities and only few returns are made. Bremmer describes it as “various types of state owned companies are incorporated by the government to manage the resources, create, and maintain jobs.”

However, the secret behind this selection is that the chosen companies are privately owned companies. These privately owned companies dominate the economic sectors. In all the above situations, the state uses markets to deliver wealth to the political officials. Moreover, their mission is not seen as to maximize growth, but to use state crown jewels to maximize power and chances of survival in the leadership positions that they take.

We could comment that this book is carefully written in an effort to inform us on the existence of another category of communism that is evolving in the third category. Despite the effects of cold war being experienced 20 years ago, Bremmer still thinks that we are unfortunate when we face the same, but in a manner that very few can feel or witness. He goes ahead to put down quotes such as the Wen Jiabao quote from a CNN interview.

Wen illustrates that “the formulation of economic policies can only be derived by having a fair and full play to the forces that control the market.” Moreover, government regulation and macroeconomic guidance should act as the key players in resource allocation. On the contrary, the main agenda for most of the state controls is to create political power through exploitation of economic resources.

However, do not misjudge the author of this book; his main agenda is not to oppose state capitalism. For instance, he commends China and Russia for presenting their policies in a transparent manner. All that Bremmer wants is simply to show the weaknesses and strengths of this type of economy and its effects on us.

He warns on embracing imported elements of the economy saying that capitalism is unique and ought to be governed by the particular resources and needs of the specific country. The workforce in China is well developed. On the contrary, Russia is rich in natural resource, which gives it an added advantage. The Middle East is really blessed with oil though the country is challenged by demographics.

Bremmer has a major concern over China as he continually mentions of its economic status. This book makes sense to China’s economy and the dominance of state capitalism. For instance, it is not until you go over the book that you realize that Exxon Mobil is the 15th in revenues.

Top multinationals account for just 3% of reserves and 10% of the global revenue, the rest is driven by the state. The China-US trade has drastically increased from 2.4 billion USD to 400 billion USD in the year 2008 alone. This was the year that China had more than 200 billion dollars in form of investments under the sovereign funds. This is depicted in an interview with China’s finance president, Gao Xiqing. He portrays China and Russia as the leading practitioners having abandoned communism.

He commends China by depicting how powerful it is and capable of controlling the worlds economy. This is because they repaired what was in the state capitalism in accordance with the new era. However, their failure is only in the usage of money. They earn very much on exports compared to the US, but put very little in economic development. Much is returned back to the US in form of purchases of sovereign funds. China would be far much ahead if it focused on economic development rather than investment if they wanted to.

However, what would happen to the US if China stopped these investments? Infusion of earnings in exports would lead to inflation, the reason why China has to balance its markets and income. Bremmer gives an example of Greece financial crises. He adds that these China policies were intelligently selected since the purchase of these sovereign wealth funds acts as an economic back up in times of crisis. China does not have to apply for the monetary funds.

Diverting from state capitalism is the mercantilism. People tend to confuse this type of economy with state capitalism. However, Bremmer argues that it is completely different from the rest. Their policies tend to rhyme, but what differs is the financial interest. Mercantilism protects its citizens from international exploitation by controlling imports. The interest of this type of economy is to make riches and rule the world.

China would be a mercantilist country if it were selfish in sharing its surplus finance with other economies. If all these finances went to the improvement of the economy, China would be today a mercantilist country. However, China does not do that. In spite of being ranked as the top in terms of economic status, it has an average of about 5,000 USD as compared to the US, which has over 40,000 USD in terms of employee salary.

It is very ironical for a US citizen to think of living in an economy that resembles state capitalism and that they are putting to an end the free market economy. However, this is the major concern of mister Bremmer. As the title suggest, the writer thinks that the free market is ending.

In a report revealed by Bremmer in 2005 alone, corporations were the largest forms of economies, taking top 51. The report had General Motor of Denmark taking on the lead and Mitsubishi dominating over in Indonesia. Here comes China with its purchase of sovereign wealth funds and owning corporations in large-numbers. There is the emergence of multinationals, which exploit citizens. The chain continues to a point where a foreign country can own almost up to half of another in terms of investment.

This is how easy a state can dominate the whole world and many thought that they were joking when they commented that they were ‘taking over the world.’ The writer completely disagrees with these corporations. His reasons are that they have a hidden agenda, which is greed and ruthlessness. They tend to widen the gap between the poor and the rich, drive infant industries into extinction and give room for exploitation by limiting competition.

Bremmer talks of immigration and its effects. He comments that this is what has made some of the countries rich. They draw knowledge from American to levels as high as PhD, utilize the American resources, and take back to their countries. However, this idea is not that much convincing because if we took the example of China, US still needs cheap China goods whereas China needs the US for educational resources.

What if we have a mixture of state capitalism and free market economy? It can be practically applicable only in situations where private owners own free corporations while the government is in control. The ‘invisible hand’ would balance everything automatically and bring out a balanced economy.

Throat competition among countries and corporations would be cut down .Exports and imports would be balanced without any underflow or overflow. This system appears ideal, but may be this is what Bremmer believed and would want to see. Other recommendations that Bremmer gives are; be friendly to foreign workers, choose the right fights, keep markets open, and investment in hard power.

Conclusion

In conclusion, we can say that this book is a professional guidebook that leaves the reader informed about real economic facts. The writer presents a wide history on capitalism and its influence on the free market, offering examples from different regimes in the world. His chapters are supported by strong evidence revealing the negativity of regulated free markets in the name of state capitalism.

There are also clear economic procedures and solutions in which the United States can live in harmony with the rest of the world and still defend its future competitive advantage. However, it is important to recommend capitalism because this has been the root of development in most countries. This just how brief the book is though not very exciting to read, one can easily connect ideas.

Works Cited

Bremmer Ian. The End of the Free Market: Who Wins the War Between States and Corporations? New York, NY: Penguin Books Limited, 2011. Print.

This book review on The end of the free market was written and submitted by your fellow student. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly.
Removal Request
If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda.
Request the removal

Need a custom Book Review sample written from scratch by
professional specifically for you?

Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar
Writer online avatar

certified writers online

Cite This paper
Select a citation style:

Reference

IvyPanda. (2019, November 21). The end of the free market. Retrieved from https://ivypanda.com/essays/the-end-of-the-free-market/

Work Cited

"The end of the free market." IvyPanda, 21 Nov. 2019, ivypanda.com/essays/the-end-of-the-free-market/.

1. IvyPanda. "The end of the free market." November 21, 2019. https://ivypanda.com/essays/the-end-of-the-free-market/.


Bibliography


IvyPanda. "The end of the free market." November 21, 2019. https://ivypanda.com/essays/the-end-of-the-free-market/.

References

IvyPanda. 2019. "The end of the free market." November 21, 2019. https://ivypanda.com/essays/the-end-of-the-free-market/.

References

IvyPanda. (2019) 'The end of the free market'. 21 November.

More related papers
Psst... Stuck with your
assignment? 😱
Hellen
Online
Psst... Stuck with your assignment? 😱
Do you need an essay to be done?
What type of assignment 📝 do you need?
How many pages (words) do you need? Let's see if we can help you!