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

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.

A bit of self-flagellation is certainly in order for the West after the Great Recession of 2008-2009, as is a good deal of overdue re-regulation following three decades of deregulation. But since the preceding quarter-century global boom was driven overwhelmingly by a worldwide shift toward marketization, there is no reason to cede the future to those states that still cling to their oligarchic, state-heavy past -- especially given what history tells us about a maturing (as in, "middle-aging") and dominant (as in, controlling the majority of income) middle class being the key to political pluralism.

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