Capitalism & State Capitalism (2008 (Central Bank intervention…
Capitalism & State Capitalism
law stopping people from buying businesses
Moa 1976 adopted state capitalism -- 1991 abandon state capitalism
China government is communist - people embrace capitalist eoonomy
state owned enterprises
control of Ukraine would provide economic power
Early adopter of state capitalism - government high privatisation of business and use of capital
Why is gov intervention happening?
Ensure stable economy and protect consumers
recover from crises
Impact on 'free' global markets
goes against core WTO values
Corporations are unable to operate freely
State capitalism is being disguised as regulation - FATCA and other global regulations
Trend in western world for privatisation - UK royal mail
Open to political influence - model is flexible according to electoral cycle
What caused the shift?
lack of trust
Post GFC 2008 - political and economic reforms have influenced opinions about the efficacy of truly free global markets
Zombie companies driving down productivity - let them fail?
Iceland didn't intervene - let banks fail -- performing moderately well in light of this
Central Bank intervention
Aftermath UK/US injecting liquidity - Lloyds, RBSI, HBOS