What's the Latest Development?

Emerging economies which combine the authority of the state with private industry have led global economic growth since the financial collapse of 2007. Countries like China, Russia and Brazil, all of which use the state to promote industry, now claim some of the world's most successful companies. And these economies are different from Europe's welfare states in that they operate on a much larger scale and have developed much faster. Rather than hand industries to cronies, the Chinese, for example, turn them into companies run by professional managers.

What's the Big Idea?

Though state capitalism is the current trend—France has created a sovereign wealth fund while Brazil and South Africa talk openly of nationalization—it is not without its risks. "How can you ensure a fair trading system if some companies enjoy the support, overt or covert, of a national government? How can you prevent governments from using companies as instruments of military power? And how can you prevent legitimate worries about fairness from shading into xenophobia and protectionism?"