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62. State Capitalism Comes of Age: The End of the Free Market?
- Author:
- Ian Bremmer
- Publication Date:
- 05-2009
- Content Type:
- Journal Article
- Journal:
- Foreign Affairs
- Institution:
- Council on Foreign Relations
- Abstract:
- Across the world, the free market is being overtaken by state capitalism, a system in which the state is the leading economic actor. How should the United States respond?
- Topic:
- Economics, Government, and Reform
- Political Geography:
- United States, China, and Europe
63. Energy at the Speed of Thought: The Original Alternative Energy Market
- Author:
- Alex Epstein
- Publication Date:
- 06-2009
- Content Type:
- Journal Article
- Journal:
- The Objective Standard
- Institution:
- The Objective Standard
- Abstract:
- The most important and most overlooked energy issue today is the growing crisis of global energy supply. Cheap, industrial-scale energy is essential to building, transporting, and operating everything we use, from refrigerators to Internet server farms to hospitals. It is desperately needed in the undeveloped world, where 1.6 billion people lack electricity, which contributes to untold suffering and death. And it is needed in ever-greater, more-affordable quantities in the industrialized world: Energy usage and standard of living are directly correlated. Every dollar added to the cost of energy is a dollar added to the cost of life. And if something does not change soon in the energy markets, the cost of life will become a lot higher. As demand increases in the newly industrializing world, led by China and India, supply stagnates-meaning rising prices as far as the eye can see. What is the solution? We just need the right government "energy plan," leading politicians, intellectuals, and businessmen tell us. Of course "planners" such as Barack Obama, John McCain, Al Gore, Thomas L. Friedman, T. Boone Pickens, and countless others favor different plans with different permutations and combinations of their favorite energy sources (solar, wind, biomass, ethanol, geothermal, occasionally nuclear and natural gas) and distribution networks (from decentralized home solar generators to a national centralized so-called smart grid). But each agrees that there must be a plan-that the government must lead the energy industry using its power to subsidize, mandate, inhibit, and prohibit. And each claims that his plan will lead to technological breakthroughs, more plentiful energy, and therefore a higher standard of living. Consider Nobel Peace Prize winner Al Gore, who claims that if only we follow his "repower American plan"-which calls for the government to ban and replace all carbon-emitting energy (currently 80 percent of overall energy and almost 100 percent of fuel energy) in ten years-we would be using fuels that are not expensive, don't cause pollution and are abundantly available right here at home. . . . We have such fuels. Scientists have confirmed that enough solar energy falls on the surface of the earth every 40 minutes to meet 100 percent of the entire world's energy needs for a full year. Tapping just a small portion of this solar energy could provide all of the electricity America uses. And enough wind power blows through the Midwest corridor every day to also meet 100 percent of US electricity demand. Geothermal energy, similarly, is capable of providing enormous supplies of electricity for America. . . . [W]e can start right now using solar power, wind power and geothermal power to make electricity for our homes and businesses. And Gore claims that, under his plan, our vehicles will run on "renewable sources that can give us the equivalent of $1 per gallon gasoline." Another revered thinker, Thomas L. Friedman, also speaks of the transformative power of government planning, in the form of a government-engineered "green economy." In a recent book, he enthusiastically quotes an investor who claims: "The green economy is poised to be the mother of all markets, the economic investment opportunity of a lifetime." Friedman calls for "a system that will stimulate massive amounts of innovation and deployment of abundant, clean, reliable, and cheap electrons." How? Friedman tells us that there are two ways to stimulate innovation-one is short-term and the other is long-term-and we need to be doing much more of both. . . . First, there is innovation that happens naturally by the massive deployment of technologies we already have [he stresses solar and wind]. . . . The way you stimulate this kind of innovation-which comes from learning more about what you already know and doing it better and cheaper-is by generous tax incentives, regulatory incentives, renewable energy mandates, and other market-shaping mechanisms that create durable demand for these existing clean power technologies. . . . And second, there is innovation that happens by way of eureka breakthroughs from someone's lab due to research and experimentation. The way you stimulate that is by increasing government-funded research. . . . The problem with such plans and claims: Politicians and their intellectual allies have been making and trying to implement them for decades-with nothing positive (and much negative) to show for it. For example, in the late 1970s, Jimmy Carter heralded his "comprehensive energy policy," claiming it would "develop permanent and reliable new energy sources." In particular, he (like many today) favored "solar energy, for which most of the technology is already available." All the technology needed, he said, "is some initiative to initiate the growth of a large new market in our country." Since then, the government has heavily subsidized solar, wind, and other favored "alternatives," and embarked on grand research initiatives to change our energy sources-claiming that new fossil fuel and nuclear development is unnecessary and undesirable. The result? Not one single, practical, scalable source of energy. Americans get a piddling 1.1 percent of their power from solar and wind sources, and only that much because of national and state laws subsidizing and mandating them. There have been no "eureka breakthroughs," despite many Friedmanesque schemes to induce them, including conveniently forgotten debacles such as government fusion projects, the Liquid Fast Metal Breeder Reactor Program, and the Synfuels Corporation. Many good books and articles have been written-though not enough, and not widely enough read-chronicling the failures of various government-sponsored energy plans, particularly those that sought to develop "alternative energies," over the past several decades. Unfortunately, the lesson that many take from this is that we must relinquish hope for dramatic breakthroughs, lower our sights, and learn to make do with the increasing scarcity of energy. But the past failures do not warrant cynicism about the future of energy; they warrant cynicism only about the future of energy under government planning. Indeed, history provides us ample grounds for optimism about the potential for a dynamic energy market with life-changing breakthroughs-because America once had exactly such a market. For most of the 1800s, an energy market existed unlike any we have seen in our lifetimes, a market devoid of government meddling. With every passing decade, consumers could buy cheaper, safer, and more convenient energy, thanks to continual breakthroughs in technology and efficiency-topped off by the discovery and mass availability of an alternative source of energy that, through its incredible cheapness and abundance, literally lengthened and improved the lives of nearly everyone in America and millions more around the world. That alternative energy was called petroleum. By studying the rise of oil, and the market in which it rose, we will see what a dynamic energy market looks like and what makes it possible. Many claim to want the "next oil"; to that end, what could be more important than understanding the conditions that gave rise to the first oil? Today, we know oil primarily as a source of energy for transportation. But oil first rose to prominence as a form of energy for a different purpose: illumination. For millennia, men had limited success overcoming the darkness of the night with man-made light. As a result, the day span for most was limited to the number of hours during which the sun shone-often fewer than ten in the winter. Even as late as the early 1800s, the quality and availability of artificial light was little better than it had been in Greek and Roman times-which is to say that men could choose between various grades of expensive lamp oils or candles made from animal fats. But all of this began to change in the 1820s. Americans found that lighting their homes was becoming increasingly affordable-so much so that by the mid-1860s, even poor, rural Americans could afford to brighten their homes, and therefore their lives, at night, adding hours of life to their every day. What made the difference? Individual freedom, which liberated individual ingenuity. The Enlightenment and its apex, the founding of the United States of America, marked the establishment of an unprecedented form of government, one established explicitly on the principle of individual rights. According to this principle, each individual has a right to live his own life solely according to the guidance of his own mind-including the crucial right to earn, acquire, use, and dispose of the physical property, the wealth, on which his survival depends. Enlightenment America, and to a large extent Enlightenment Europe, gave men unprecedented freedom in the intellectual and economic realms. Intellectually, individuals were free to experiment and theorize without restrictions by the state. This made possible an unprecedented expansion in scientific inquiry-including the development by Joseph Priestly and Antoine Lavoisier of modern chemistry, critical to future improvements in illumination. Economically, this freedom enabled individuals to put scientific discoveries and methods into wealth-creating practice, harnessing the world around them in new, profitable ways-from textile manufacturing to steelmaking to coal-fired steam engines to illuminants.
- Topic:
- Government
- Political Geography:
- United States, China, America, and India
64. China-Taiwan Relations
- Author:
- David G. Brown
- Publication Date:
- 01-2009
- Content Type:
- Journal Article
- Journal:
- Comparative Connections
- Institution:
- Center for Strategic and International Studies
- Abstract:
- Beijing and Taipei continued to work cooperatively through various dialogue channels to improve cross-Strait relations. The focus this quarter was on the first ever visit by a “designated representative” of the Chinese government to Taiwan – the visit of ARATS Chairman Chen Yunlin in November, when four agreements were signed. This process is gradually establishing a degree of trust in this long-troubled relationship. However, a vocal opposition minority in Taiwan disrupted the Chen visit and forced President Ma Ying-jeou to make adjustments. Despite the progress, there is still no evidence that Beijing has taken any steps to reduce its military threat directed at Taiwan. President Hu's new six-point statement and Taipei's initial reaction to it highlight the continuing gap between their positions. The global economic crisis is confronting the relationship with new challenges, the scope of which is not yet clear. Internationally, Taiwan's desire for participation in the WHO will be a test of this evolving relationship next spring.
- Topic:
- Economics and Government
- Political Geography:
- China, Taiwan, Beijing, and Taipei
65. Japan-China Relations
- Author:
- James J. Przystup
- Publication Date:
- 01-2009
- Content Type:
- Journal Article
- Journal:
- Comparative Connections
- Institution:
- Center for Strategic and International Studies
- Abstract:
- In early December, the Japanese Foreign Ministry released its annual survey of public opinion on Japan's international relations, which revealed that over 70 percent of the public considered relations with China to be in poor shape. The survey likewise revealed a record high, 66.6 percent of the Japanese public, as feeling no affinity toward China. Meanwhile, the Ministry of Defense reported increasing PLA naval activities in the waters around Japan, including the incursion of research ships into Japanese territorial waters in the Senkaku Islands chain. There were also reports that China would begin the construction of two aircraft carriers in 2009. Japanese and Chinese leaders met in Beijing in October and in Japan in December, but beyond commitments to best efforts, failed to make any demonstrable progress on food safety and sovereignty issues.
- Topic:
- International Relations and Government
- Political Geography:
- Japan, China, and Beijing
66. China-Russia Relations
- Author:
- Yu Bin
- Publication Date:
- 01-2009
- Content Type:
- Journal Article
- Journal:
- Comparative Connections
- Institution:
- Center for Strategic and International Studies
- Abstract:
- In contrast to the hectic third quarter of the Beijing Olympics and South Ossetia, the last quarter of 2008 was calmer for Russia and China. Their bilateral relations, nonetheless, seemed to become more substantive. The 13th annual Prime Ministerial Meeting in Moscow in late October and the 13th session of the Russian-Chinese Intergovernmental Commission on Military-Technical Cooperation in Moscow in early December provided some fresh impetus for the impasse in two important areas of bilateral relations: the long-awaited oil pipeline to China and military relations. Separately, the quarter also witnessed the final, albeit low-key, ceremony for settling the last territorial issue when Russia officially transferred to China control of one and a half islands of the disputed territory near Khabarovsk. However, the world around Russia and China was in turmoil not only because of the financial tsunami that was leaving no nation behind, but also because of regional crises between India and Pakistan as well as Israel and Palestine, and the stagnation in the Korea denuclearization process.
- Topic:
- International Relations and Government
- Political Geography:
- Pakistan, Russia, United States, China, India, Israel, Beijing, Palestine, and South Ossetia
67. Regional Overview
- Author:
- Ralph A. Cossa and Brad Glosserman
- Publication Date:
- 04-2009
- Content Type:
- Journal Article
- Journal:
- Comparative Connections
- Institution:
- Center for Strategic and International Studies
- Abstract:
- Secretary of State Hillary Clinton's choice of Japan, Indonesia, South Korea, and China for her first official trip overseas helped shine a spotlight on Asia as a high priority region this quarter, as did North Korean Dear Leader Kim Jong-il's announcement that he intended to conduct a satellite launch in early April. The drama surrounding the anticipated launch provided an unfortunate back drop for otherwise very positive pronouncements about intended Obama administration policies in East Asia, even if the quarter closed with only a handful of those eventually to be tasked with implementing these policies at their desks. ASEAN leaders finally held their postponed summit and celebrated the entry into force of their much-maligned Charter. Meanwhile, Australian Prime Minister Kevin Rudd visited Washington to underscore that the U.S. and Australia are still “mates,” even as his reluctance to send more combat forces to Afghanistan foreshadowed the difficulty President Obama faces in getting allies to sign up for his “surge” there. Finally, economic forecasts kept being adjusted downward as Asian leaders prepared for the G20 summit in London in hopes that this would bring a turnaround.
- Topic:
- Security, Government, and United Nations
- Political Geography:
- Afghanistan, United States, Japan, China, Indonesia, Asia, South Korea, London, and Australia
68. China-Southeast Asia Relations
- Author:
- Robert Sutter
- Publication Date:
- 04-2009
- Content Type:
- Journal Article
- Journal:
- Comparative Connections
- Institution:
- Center for Strategic and International Studies
- Abstract:
- Southeast Asian and broader international attention focused in March on the confrontation between five Chinese government ships and the U.S. surveyor ship USNS Impeccable in the South China Sea near Hainan Island. U.S. and Chinese protests and related media commentary highlighted for Southeast Asian audiences a pattern of U.S. surveillance to learn more about China's growing military presence and activities in the area, and a pattern of China's unwillingness to tolerate such actions in areas where it claims rights that are disputed by the U.S. and other naval powers. The protests and commentary provided a vivid backdrop for China's continued efforts to claim and defend territory in the South China Sea that is also claimed by Southeast Asian nations. Meanwhile, there was little good news on the economic front as China's international trade and economic interchange with Southeast Asia continued to fall rapidly. Chinese diplomatic and political attention to the region remained low during the quarter.
- Topic:
- International Relations, Economics, and Government
- Political Geography:
- United States, China, and Southeast Asia
69. China-Taiwan Relations
- Author:
- David G. Brown
- Publication Date:
- 04-2009
- Content Type:
- Journal Article
- Journal:
- Comparative Connections
- Institution:
- Center for Strategic and International Studies
- Abstract:
- Beijing and Taipei have been making preparations for the third round of ARATS-SEF talks to be held in May or June at which time additional agreements on finance, flights, and crime are expected. The global recession has precipitated a dramatic decline in cross-Strait trade and that, in turn, has contributed to accelerated plans to negotiate a comprehensive cross-Strait economic agreement. However, the planning for such an agreement has produced a storm of opposition protest in Taiwan, which represents the most serious challenge yet to President Ma's cross-Strait policies. Officials on both sides are speaking optimistically about finding a formula under which Taipei could be an observer at the World Health Assembly (WHA) in May. Although defense reports from both sides acknowledge reduced tensions, there is as yet no sign that Beijing will reduce the military threat directed at Taiwan.
- Topic:
- International Relations and Government
- Political Geography:
- China, Taiwan, Beijing, Taliban, and Taipei
70. China-Russia Relations
- Author:
- Yu Bin
- Publication Date:
- 10-2009
- Content Type:
- Journal Article
- Journal:
- Comparative Connections
- Institution:
- Center for Strategic and International Studies
- Abstract:
- Perhaps more than any time in the past 10 years, the third quarter highlighted both the potential and the problems of this bilateral relationship. On the one hand, the two militaries successfully conducted their joint antiterrorism exercise, Mirnaya Missiya (Peace Mission) 2009, in China's Jilin Province. On the other hand, the closing of Moscow's huge Cherkizovsky market on June 29 uprooted tens of thousands of Chinese citizens doing business in Russia, while $2 billion in goods were confiscated as “illegal” and “contraband.” On the eve of the 60th anniversary of bilateral ties, Moscow and Beijing seemed to be stretching both the cooperative and conflictual limits of their strategic partnership.
- Topic:
- Government
- Political Geography:
- China and Korea