The Financial Translator’s Bookshelf: The End of the Free Market, by Ian Bremmer

The “end of history” is called off, the “flat world” wrinkles
The End of the Free Market: Who Wins the War Between States and Corporations?
A book like this is eye-opening because it brings into sharp focus many different and apparently unconnected events into a larger framework: Google’s shutdown of its servers based in mainland China after disputes over censorship and sabotage with the government; the interruption of Blackberry services by Persian Gulf nations; the arrest of a Rio Tinto executive in China over allegations of industrial espionage; the difficulties that Western oil companies face in boosting reserves because of resource nationalism… As you read “The End of the Free Market”, your mind goes click-click-click. All of these appear on the surface to be temporary hiccups in the process of ongoing globalization. But Bremmer’s book challenges this complacency by arguing forcefully that this sort of conflict will actually become more frequent as the “rise of the rest” brings forth not a global free market but a much more complex landscape in which Western companies have to compete with “national champions” with partially protected local markets, multinationals struggle to penetrate smaller emerging markets whose resource nationalism can be subsidized by larger patrons such as Russia, China and even Brazil, and undemocratic governments successfully balance pressure from democratic countries and multilaterals by playing them off against more accommodating clients in the East or South.
Anyone who remembers the fall of the Berlin Wall probably nurtures the deep-lying conviction that capitalism has carried the day and that, despite catastrophes like the 2008 crisis, it will continue to do so for many decades to come, progressively breaking down barriers to trade and individual freedom. The daily drumbeat of news about China’s ascendancy can reinforce the lazy notion that, despite problems such as an inflated property market or labor troubles, the process of economic liberalization will continue until eventually political liberalization is forced upon the Communist Party somewhere down the line. Bremmer replaces this vision with a more subtle scenario in which “state capitalism” freezes (or at least delays) the march toward worldwide liberal democracy while simultaneously reaping the benefits of local entrepreneurship.
In many ways, “The End of the Free Market” is a sober counterpoint to Fukuyama’s epiphany, The End of History and the Last Man, of two decades ago. Crucially, Bremmer’s thesis is not an exercise in futurology: he claims that “state capitalism” is already upon us, as many governments across the world combine different degrees of authoritarianism and free markets to strengthen their grip on power. And the cases of Google, Research in Motion and Rio Tinto (which he does not discuss since they postdate the writing of the book) do indeed seem to bear it out. However, the book is a not a pessimistic dystopia, simply an invitation to correct the evangelical notion that adoption of free market capitalism will lead automatically to free trade and liberal democracy. This is a good antidote to simplistic visions of the post-Cold War World.