The Economist - Jun 21st 2014
IT IS now 25 years since Francis Fukuyama published “The End of
History?” and ignited a firestorm of debate. Today there are many
reasons for thinking that he was wrong about the universal triumph of
liberalism and markets, from democracy’s failure in the Middle East to
the revival of religious fundamentalism. But one of the most surprising
reasons is the continuing power of the state as an economic actor: far
from retiring from the business battlefield in 1989, the state merely
regrouped for another advance.
Survey the battlefield today and you can see state capitalism almost
everywhere. In China companies in which the state is a majority
shareholder account for 60% of stockmarket capitalisation. In Russia and
Brazil companies in which the state has either a majority or a
significant minority stake account for 30-40% of capitalisation. Even in
such bastions of economic orthodoxy as Sweden and the Netherlands
state-owned enterprises (SOEs) account for 5% of market capitalisation.
The Chinese and Russian governments show little sign of wanting to
surrender control of the commanding heights of the economy.
Privatisation seems to have ground to a halt in Brazil and in India
(though its new government may revive it). There has been talk of the
French government taking a stake in Alstom or part of its
business—adding to the stakes it and Germany hold in Airbus and the one
France recently took in Peugeot.
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