The Political Economy of State Capitalism
Sunday, Jan. 6, 2019 1:00 PM - 3:00 PM
- Chair: Tonia Warnecke, Rollins College
China’s Belt and Road Initiative: Reducing or Raising the World’s Uncertainties?
AbstractIn Galbraith’s The Age of Uncertainty (1977), corporation and poverty are the two major sources of uncertainty puzzling the world. The Belt and Road Initiative (BRI) as raised by the Chinese Government in 2013 is a technological innovation to develop an unprecedented social and economic nexus linking up China and over 60 countries across the Asian, European and African continents. Presumably, promotion of the mutual economic prosperity would reduce poverty. Nevertheless, the related governments may transform themselves into being part of the corporation, akin to what the Chinese government does.
In principle, the BRI is an attempt to revitalize the historical prosperity of China’s land and maritime Silk Road trades and the cultural exchanges among countries in the related continents. The backbone of this initiative is to raise connectivity between the related countries through huge joint capital investments in various infrastructure projects. To push forward this proposal, the Chinese Government established a USD40 billion Silk Road Fund in 2014 to finance the related projects and provide credits to the participating countries.
In this study, the possible self-reinforcing and self-undermining processes driven by the new institutions under the BRI are explored. Despite the assurance that a new inter-continental economic order would be formulated in the less-developed world, signs of uncertainty in various forms clearly emerge. Indeed, in-country political instability, political conflicts between the participating countries, and national debt defaults should never be overlooked. Also, uncertainties to the world economic powers like the USA and Japan may be raised.
Polanyi’s Double Movement in Modern Market Reforms in Russia and China
AbstractSince the 1980s the ideas of the so-called Globalization (neoliberal) Consensus in the economic narrative have prevailed. Following these ideas states around the world liberalised deeply national economies. This process was typical not only in Western countries. Simultaneously, intensive market reforms began in the countries of Eastern Europe, Russia and China, pursuing similar goals. However, after the global crisis of 2007 the Death of the Globalization Consensus was recognised (Rodrik, 2008). Everywhere the state returns to the financial and even some production sectors and international trade. How far will this process of "double movement '(Polanyi, 1944) go? Some forecasts for Western countries suggest that the return of the state will be limited, because the neoliberal norms and institutions are embedded everywhere and no alternative structure has yet become the subject a new universal consensus (Wade, 2010). The task of the paper is to consider the situation in Russia and China, where disappointment in the "golden tablet of the market" began to manifest itself in the early 2000's. The last world crisis only exacerbated this disappointment and pushed a "double movement" to the return of market relations under social control in these countries. The comparative institutional analysis shows that in Russia and China, the extent of state regulation and social control of the economy is much deeper and larger, compared with Western economies. This, in our opinion, makes the economic development of these two countries much more stable and predictable in the ongoing "True Age of Uncertainty".
State Capitalism Around the World
AbstractState mediation may assume a wide range of forms, not all of which benign (Polanyi, 1944). The back and forth between privatizations (in the 1980s) and nationalizations (in some countries inthe 2010s) resulted in new and more complex realities of the influence of government in the economy (Wood and Wright, 2015; Grosman et al., 2016), substantially different from state-owned enterprises (SOEs) that operated in the 1970s (Aharoni, 1986). These shifts reflect a historical dynamic in which countries move between marketization at one end of the spectrum and state involvement in firms (statism) at the other end. The inability of market system to ensure stability and equality has led to suggestions that the movement back to statism is predictable, and even overdue. Polanyi’s 70+year old concept of ‘double movement’ where state intervenes to deal with the adverse consequences of a self-regulated market system, could not have been more pertinent (Polanyi, 1944; Hodgson, 2017). The social protection now sought by the state against the effects of self-regulated market is increasingly in terms defined by the market, mostly via ownership: governments share ownership with private shareholders, have taken on new roles as global asset managers, e.g. through sovereign wealth funds, and SOEs have become multinationals. One could question whether such market-based attempts at regulation allow for social protection – we explore the extent it is likely to be. This paper reviews new forms of statism in terms of Polanyi’s double movement, their outcomes, and addresses trends, research priorities and policy recommendations for organizations under the different state capitalism systems.
National University of Sciences and Technology-Pakistan
- B5 - Current Heterodox Approaches
- P2 - Socialist Systems and Transitional Economies