The Different Ways That the U.S. and Chinese Governments Use Their Power to Regulate Capitalism
Capitalism is not as straightforward as it may seem. There are different ways that governments use their power to regulate it, and these approaches have significant impacts on the development of economies.
In the West, we often hear about the virtues of private capitalism, where businesses and enterprises are run by private owners and employees. The reality is more complex. Western economies are declining partly because they hinder their states’ involvement in managing their economies. By contrast, developing economies like China have embraced state capitalism, where state officials are major employers and play a crucial role in economic management. This approach has allowed China’s GDP to grow three times faster than that of the United States over the last generation.
China’s adoption of a strong state apparatus can be traced back to its historical affiliations with socialism and the idea that transitioning to a socialist system required the workers to take control of the state. This strong state model has aided China’s remarkable economic growth and its ability to contain the spread of COVID-19.
Western capitalism emerged in opposition to strong states during the early stages, advocating for concepts like “laissez-faire” and “free markets.” As capitalist empires grew, they found themselves relying more on strong states, leading to ideological tensions between capitalists and anti-statists.
In the post-World War II era, emerging economies embraced strong states for economic development, leading to a resurgence of strong-state-led growth globally. This period is associated with the term “neoliberalism,” where strong states coexist with ideological objections to their role in capitalism.
Both Western and Eastern capitalism have evolved with ideological objections to strong states weakening. Even conservative leaders like Donald Trump and Boris Johnson advocated for strong states. China’s state-capitalist form has demonstrated its effectiveness in driving economic growth and controlling crises, suggesting that it may represent the final stages of capitalism.
As we look to the future, a post-capitalist system may emerge, where workplace organizations become more democratized, and the employer/employee division disappears. The socialist left advocates for this economic system, having learned from earlier experiments in state capitalism.
In conclusion, the role of the state is central to the development and decline of capitalism. While different nations have adopted various approaches, it is clear that state involvement in economic management plays a significant role in shaping the future of capitalism. It remains to be seen whether a post-capitalist system will emerge, bringing new possibilities for economic organization and societal structures.
🔭 This summary was human-edited with AI-assist.
