The New Rules: Don't Count Out Free Markets Just Yet

The recent global financial crisis has birthed a slew of books proclaiming the superiority of state capitalism -- or, alternatively, authoritarian capitalism -- over free markets. China, we are led to believe, will not merely own this century, but will also likely win the bulk of the world over to its "unique" and "unprecedented" model of development. Stunningly, even though no serious thinker still believes in the efficacy of command economies, we are now encouraged to quake before state-directed economies, as if a bunch of power-fixated politicos sitting around a table will somehow manage to outsmart, out-predict, and outperform the "wisdom of crowds" and the market's "invisible hand" -- all while easily maintaining their dictatorship over just-emerging middle classes.

Frankly, as a life-long student of authoritarian regimes, I feel foolish even typing out such a scenario. ...