- Country: The United States
- Title: Founder of the Eurasia Group
- Education: Stanford University, Tulane University
- Books: The J Curve: A New Way to Understand Why Nations Rise and Fall (2009), Nations and Politics in the Soviet Successor States (1993)
- Website: Eurasia Group
Greg Lawson: The term "state capitalism" seems to have a faint odor of fascism associated with it, at least to the extent that the state intervenes substantially in the marketplace but without eliminating private enterprise and profit seeking, as under socialistic thinking. Do you agree?
Also, do you envision a scenario where state capitalism may supplant free-market capitalism on a long-term basis in the developed world?
A: State capitalism does not have fascism's ideological component. The governments that practice it are attempting to "manage" the performance of markets for long-term political survival and, in some cases, personal gain -- not to promote an abstract ideal. And unlike fascism, state capitalism isn't centered on a cult of personality. The elite that drives Chinese Communist Party policymaking is made up of talented and capable technocrats who would not have impressed Benito Mussolini with their personal magnetism.
I think it's highly unlikely that state capitalism will ever replace the free-market variety in the developed world. Faith in the ability of markets to value assets and allocate resources is philosophically well entrenched in Australia, Canada, Europe, Japan, and the United States -- despite fluctuations in levels of market regulation and state intervention at particular moments and in particular sectors. I believe it would take a genuine political and economic catastrophe -- a global pandemic that kills millions, a terrorist attack carried out with weapons of mass destruction on a major Western city, a war in the Middle East that pushes oil prices to staggering new heights -- to force a fundamental long-term rethink within the developed world about the proper role of government in economic activity. I don't believe that the current crisis in Europe and the United States will rise anywhere close to that level. The core objective of government interventionism in the West right now is to restore the free market to health, not replace it.
Iain Marlow: Many on the left have decried government bank bailouts as a huge waste of money