"We're Seeing the End of a Global Free Market," Says Ian Bremmer
Posted May 20, 2010 12:02pm
The free market principles increasingly popular around the world over the last 40 years are suddenly less so. “We're seeing the end of a global free market,” says Ian Bremmer president of the political consulting firm, Eurasia Group. “In the west, it's indefensible to support the free markets publicly,” says the author of the The End of the Free Market.
Thanks to the financial crisis, high unemployment and a growing gap between the rich and poor, support for capitalism is waning while renewed populism takes hold. "You can't support open borders, open trade with 17.2% unemployment in the United States," he says, citing the recent illegal immigration law in Arizona as an example.
"There is massive anti-incumbency, anti-government sentiment throughout the West,” he notes, pointing to Gordon Brown's resignation in the U.K., German anger over the Euro bailout and a Japanese populace that voted out the ruling party after 50 years of dominance. "And that comes hand in glove with support for populist economic policies that will hurt growth in the global economy," he believes.
The alternative, of course, is a Chinese style state controlled economy which may gain popularity among emerging markets. While most of the developed world muddles through China continues to grow at a torrid pace. “The world's second largest and fastest growing economy, China, is completely committed to a model that at base is fundamentally incompatible with free market capitalism.”
Which model shapes the future? It's not clear yet, says Bremmer.
In the meantime, Bremmer thinks the U.S. dollar and gold will continue to appreciate in the face of all this global uncertainty. “The dollar looks great because there's nothing else.”