Comments on Ian Bremmer, The End of the Free Market, Portfolio, 2010

This book puts forward an attractive notion to describe the type of capitalism which is different from western free-market capitalism. That is "state capitalism". China, Russia, Saudi Arabia, and UAE are the countries which the author depicts as the champions of state capitalism. State capitalism is a type of market economy in which private enterprises play important roles but the government is heavily involved in the market to achieve political goals. I learned a lot about the oil-rich countries of middle east from this book. However, I found some misleading parts in this book regarding Japan and China. The author writes that "(MITI) produced most of Japan's prime ministers", but as far as I know none of the postwar prime ministers had served as a bureaucrat at MITI, with the exception of Nobusuke Kishi, who was a bureaucrat at the Ministry of Commerce and Industry (Shokosho), the predecessor of MITI. The author's description on China's virtual monopoly of global rare earths production, saying that "The Chinese government has accomplished this by investing billions in mines and processing at home", is also misleading. According to books and articles on rare earths published in China, it is obvious that China's monopoly has been accomplished not because the government made efforts to do so but because the government has had only loose control on rare earths resources. The government intends to strengthen the control over rare earth mines and restrict production and exports, in order to preserve the resources. But many private miners entered the business of rare earths extraction, increasing the production volume, and driving the price down, forcing rare earth mines outside of China to stop production, and leading to China's monopoly. This is a kind of development that is against the will of the Chinese government.