This is a good summary of the weak points of state capitalism. State Owned Enterprises (SOE) and state champions get plenty of government support in the form of cheap money and favorable legislation but that can only help a business that is competitive. Propping up uncompetitive businesses simply because they are owned or favored by the state just drains the governments coffers for little or no return. Anyone who has been to the Department of Motor Vehicles in the US knows that the state is poor at encouraging productivity and that includes state owned/supported commercial ventures. This is also true of innovation as government bureaucrats have little incentive to innovate and innovators outside of SOEs or state champions cannot compete for resources. By themselves these things put the lie to the "superiority" of state capitalism but the rampant corruption that accompanies state capitalism frankly obliterates the myth.
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