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P LANNING P ARADIGM
From State to Democracy:
Two Views of Capitalism
In State Capitalism, the state controls everything for political rather than
economic gain, ignoring the central reason for the success of a company —
profi t, as opposed to Democratic Capitalism which makes Democratic
Capitalism more attractive
David A. Andelman
Editor, World Policy Journal
President, Overseas Press Club of
America
In the late 1970s, shortly after
The New York Times replaced
typewriters with computers in its
newsroom in New York, the editors
decided to ship an early workstation
to its news bureau in New Delhi. A
month later, the newspaper’s bureau
chief in the Indian capital received word
from customs that the computer had arrived,
but had been impounded. It would
not be allowed into the country, the bureau
chief was told, because there was an
Indian version that could provide comparable
services. My colleague (I was
then based in Bangkok covering Southeast
Asia for the newspaper) asked to see the
Indian version that was being forced on
him. He was told to drive to a location in
central Delhi and was taken into a room.
There, fi lling the entire room, virtually
the size of the entire bureau, was a monster
computer with fl ashing lights and
lots of whirring sounds.
“This can provide all the services of
your American machine,” he was told.
“But it’s larger than our entire offi ce, and
104 THE IIPM THINK TANK
it uses vacuum tubes,” the reporter replied,
once he managed to recover his
composure. The salesman shrugged. It
was the fi nest India had to offer.
This was deep in the days of state
capitalism in India. No longer. Today,
India is a modern nation with among the
most advanced, and freest economies in
the world — having undergone a growth
spurt that is among the fastest in the history
of our planet. But it could never
have been done under the constraints of
the state model pursued in the
years until 1991 and the end of the
Licence Raj.
This was by no means my
last brush with state capitalism.
From France under Socialist
President François Mitterrand
to Eastern and Central
Europe when
COMECON held sway
under the infl uence of
Soviet Communism, I experienced
fi rst-hand the often
grotesque ineffi ciencies that were
paramount and often quite appalling.
In 1981, when I arrived in Paris as a
correspondent for the American television
network CBS News, François Mitterrand
had just arrived in power with an
overwhelming mandate as the fi rst Socialist
President of France in a generation.
Welcoming Communist Party
members to his cabinet, he also embarked
on a broad campaign of nationalizations.
The fi rst, and most visible, was a vast
swath of the French banking sector.
At 12 noon on November 12, 1981, the
Baron Guy de Rothschild invited me to
his inner sanctum in the Banque Rothschild
at its headquarters at 21rue Laffi
tte in the 9th arrondissement, the heart
of the French banking quarter, barely a
fi ve minute walk from the Bourse. He