Boston Globe: State Inc.
The most important new forces in global business are aggressive, wealthy, and entrepreneurial. But they aren't corporations: they're authoritarian governments.
IT WAS THE biggest corporate deal in the history of sub-Saharan Africa: Last October, a foreign firm spent nearly $6 billion for a chunk of Standard Bank, the South African company that has long dominated finance on the continent.
more stories like thisYet the foreign suitor was not Citigroup, or UBS, or some other titan of private commerce. It was the Industrial and Commercial Bank of China, a company owned wholly by the Chinese government. …
…The rise of states as global economic players marks a sharp reversal from decades in which private enterprise seemed an unstoppable force in global finance, commerce, and culture. It represents a new and unexpected fusion of state control with the business principles of capitalism. And it is already causing a significant shift in global power.
The new state capitalists – China, the United Arab Emirates, Russia, and others – are primarily authoritarian nations. And as they become bigger commercial players, they are gaining new influence in a realm once dominated by the democratic West. Some political scientists, such as Azar Gat of Tel Aviv University, who coined the phrase "authoritarian capitalism" to describe the trend, see these countries as the first major threat to the idea of free-market democracy since fascism and communism. …
What most authoritarian quasi-capitalist societies have in common is a natural resource that is in demand, particularly oil. Selling oil does not require a population with a high degree of human capital or the underlying societal infrastructure and values to support it. I think it is hard to tell if this really is some new form of quasi-capitalism or just instances of authoritarians successfully exploiting markets because of their natural resources.
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