Fettered Capitalism

Governments around the world are taking a more active role in the economy. Is that a threat to Canada?

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A week before Prime Minister Stephen Harper left to China to sign $3 billion worth of deals and collect two pandas, The Economist published a special report on state capitalism. Inspired by Ian Bremmer’s provocatively titled The End of the Free Market, the report proclaimed that “The era of free-market triumphalism has come to a jarring halt,” and cited state capitalism’s claim to the “most successful big economy” – China’s – as proof.

In a system of state capitalism, Bremmer writes, “the state [uses] markets to create wealth that can be directed as political officials see fit … the ultimate motive is not economic (maximizing growth) but political (maximizing the state’s power and the leadership’s chance of survival).”

What, then, are we to make of Canada’s $3-billion trade deal with Beijing? What of Petro-China’s $1.9-billion investment in Alberta’s oil sands? While economic freedom in the rest of the world is in decline, Canada’s economic freedom remains among the highest in the world (higher, even, than our southern neighbour’s). If eastern state capitalism is the new western liberal capitalism, has Canada missed the boat?

OpenCanada interviewed the top minds on economic freedom and Canada-China relations, asking them to consider what this new capitalism means for Canada, how the prime minister is approaching it, and whether Bremmer and The Economist simply got it wrong.

Photo courtesy of Reuters.