Junkyard Wisdom

Ever hear of “state capitalism”? Not many people have, but it’s one of the biggest challenges America is going to face this century. Essentially, state capitalism is a government (or quasi-government agency) making the macro level decisions about how to invest resources. It’s not communism or socialism; it’s state capitalism. For instance, the State says “invest more into coal plants” and it happens, but private firms decide where, how big, do the building, and operate the plant. State capitalism is also large funds using government money to strategically invest; sometimes this is done to diversify, but sometimes it is done to further national interests.

Dozens of countries are now doing this, with China being the obvious poster child. Russia, Saudi Arabia, India, Brazil, and many others are doing the same.

It’s direct competition for large corporations, which is what the American economy is built around. Thus the threat.

Ian Bremmer has done a good job of laying this all out in a comprehensive way. This is not an easy read, but it is an important one. If you are at all curious about economic trends, geopolitics, or international relations, this is a must read.