"State capitalism" (6 of 8): an Axis of State Capitalism? Are you kidding me?

Going abroad: The world in their hands, one of The Economist's special report articles on "state capitalism" focuses heavily on China and its increasing economic presence in the world. And it suggests that the use of "state capitalism" in this report is an attempt to establish some kind of economic framework in which the Good Side of neoliberal countries can be faced off against the Bad Side of "state capitalists".

But it's striking in this whole series that China plays such a large role, but they don't bother to deal with the fact that their lead "state capitalist" country is a Communist country in their own proclaimed self-understanding. They don't bother to deal with what seems like an obvious, uh, contradiction, if you'll forgive the Hegelian expression.

Now maybe China calls itself Communist but really has restored capitalism under the guise of a Communist regime. Actually, in the ferocious ideological debates between China and the Soviet Union in the 1960s and into the 1970s, Chinese Communists actually argued that the Soviet Union had restored capitalism. That would be one way for the authors to explain how an officially Communist country could be what they see as an increasingly prominent and successful (state) capitalist power. But they don't even try to make the argument.

This is a little bit sad. They propose the concept of, yes, an Axis of State Capitalism. But you get the impression that the writers either weren't convinced or just insisted that the editors not make such a stark ideological construction in the piece:

This "axis of state capitalism" is gaining an ideological edge as the emerging world goes from strength to strength, America pulls in its horns, Europe implodes and the G20 takes over from the G7. Politicians across the region feel sure they have a formula that can combine economic dynamism with order, taking in the best of capitalism (those sleek modern corporations and clever wealth funds) without unleashing the havoc that devastated Russia in the 1990s and threatened to consume America in 2007-08. Proponents of this ideology revere Lee Kuan Yew as a founding father, see America as a wounded giant and dismiss Europe as self-indulgent and lazy. But they also admire Silicon Valley and Google, MIT and General Electric, Harvard Business School and McKinsey. ...

Xenophobia plays a part, but state capitalism is also fin ding it hard to evangelise. Indeed, many state capitalists are in denial about it. Mr Putin pooh-poohs the whole idea. If we concentrate on certain resources, we do it only to support the industry until the companies stand fi rmly, he insists. The Chinese argue that their free-trading credentials are as good as those of any other WTO members. [my emphasis]

Good grief! I could write a much better pitch for their case, and I don't even buy their perspective. In fact, I think their whole concept of "state capitalism" is hopelessly squishy. Couldn't they have found a kid from a high school debate club somewhere to help them sharpen their argument? The Axis of State Capitalism? That's like something Politico would come up with and make Charlie Pierce want to drink antifreeze.

But the part about Russia is intriguing, though not in the way the article emphasizes. This piece also reports, "The power of the axis is easily exaggerated. The Russians resent the fact that their former junior partner in the communist enterprise, China, has become so successful." It's a reality of the past 20 years: the adoption of capitalism in Russia set back that country's level of prosperity and economic power in significant ways. This is something that is still largely overlooked in the framework of Cold War triumphalism.

This is funny, in a rather pitiful sort of way. This article laments the lack of polarization that they recall from the Good Old Days of the struggle against the Communist Menace: "State capitalism may not turn into a popular movement, in the way that communism and socialism did, but it nevertheless confronts Western policymakers with some diffi cult questions." Sorry that the Axis of State Capitalism just isn't scary enough. Maybe you can fulminate over the All Powerful Islamic Menace instead.

Tags: state capitalism

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