Two provocative trends are taking place globally — state capitalism is increasing as the private sector is retreating in some of the largest growing economies on the planet. At the same time, there is a convergence of grassroots, consumer-led activism that has created awareness of our challenges as a planet, but failed to effect change on a systemic scale.
The two are interrelated and both demand that we revitalize our US economy.
State capitalism is financially succeeding, gradually becoming associated with some of the highest revenue holding companies in the world. That’s what The Economist examines in its latest Special Report: The Visible Hand,” which explores how “The crisis of Western liberal capitalism has coincided with the rise of a powerful new form of state capitalism in emerging markets” — and what might happen next.
The numbers are overwhelming. Take China for instance: As of 2011, 80% of China’s stock market was made up of state-owned companies, including China Mobile, Sinopec Group, and China National Petroleum Corporation. And its not just China; Russia and Brazil are major players, too.
But questions arise: What types of problems can arise from such an intertwined system? Can fair trade be ensured? With the full integration of the government into capitalistic practices, how will the “free market” be affected? How does the US keep from falling behind? And where does the consumer fit into these global shifts?
In the “Citizen Consumer” published in the Boston Review (and expanded in a way by Mike Daisey in an excerpt of his show “The Agony and the Ecstasy of Steve Jobs” on NPR’s This American Life), the conversation about ethical consumption takes flight. The crux of the issue is that, while consumers do have clout and report that they care about ethical consumption, ethical consumption remains minimal. This is compounded by the fact that traditional state and governmental regulation has failed to ensure ethical manufacturing (e.g., Foxconn in China). It takes two to tango, so to speak.
It’s time for ethical consumers to act and vote with their dollars — and time for our government to listen to us and create the environment for ethical and responsible business. Reading “The Future of History” and “The Democratic Malaise” published in Foreign Affairs, puts front and center the terrible truth of the alternative: the erosion of the middle class, a result of government involvement in the financial services of corporations — and the failure to galvanize grassroots, consumer-led efforts.
Two thoughts from both articles:
“Despite widespread anger at Wall Street bailouts, there has been no great upsurge of left-wing American populism in response. It is conceivable that the Occupy Wall Street movement will gain traction, but the most dynamic recent populist movement to date has been the right-wing Tea Party, whose main target is the regulatory state that seeks to protect ordinary people from financial speculators. Something similar is true in Europe as well, where the left is anemic and right-wing populist parties are on the move.” (The Future of History)
“Voters in industrialized democracies are looking to their governments to respond to the decline in living standards and the growing inequality resulting from unprecedented global flows of goods, services, and capital. They also expect their representatives to deal with surging immigration, global warming, and other knock-on effects of a globalized world. But Western governments are not up to the task. Globalization is making less effective the policy levers at their disposal while also diminishing the West’s traditional sway over world affairs by fueling the “rise of the rest.” The inability of democratic governments to address the needs of their broader publics has, in turn, only increased popular disaffection, further undermining the legitimacy and efficacy of representative institutions.” (The Democratic Malaise)