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P LANNING P ARADIGM
leadership in Beijing the ability to keep
full democratic capitalism, and the po-
litical democracy that inevitably accom-
panies it, at bay for at least another
generation or two.
Brazil is another classic cautionary
tale. Here is a nation that is the invest-
ment poster-child of the Western hemisphere.
Its economy is surging, its stock
market up some 150 percent in the past
fi ve years, having shrugged off the recessionary
meltdown of its more northerly
neighbors with barely a look backwards.
Now, however, its state oil company
Petrobras (Petroleo Brasileiro S.A.) is
considering a major recapitalization,
dithering to the point where major investors,
like the American private equity
investor George Soros, simply bailed out
of its stock altogether.
Finally, of course, there’s Russia — a
nation, like India, of vastly disparate societies
of haves and have-nots. With the end
of communism came the offi cial end, at
least, of state capitalism. Suddenly, all
bars were removed and those with contacts,
friends in high places or simply
enormous energy, drive or ruthlessness
(often all four combined) became enormously,
unfathomably wealthy. But while
the old class of wealth and power — the
apparatchiki—disappeared in a fl ash, they
were replaced in a heartbeat by the new
class of oligarchs. Russia never has
108 THE IIPM THINK TANK
A thriving middle class has begun to
develop, something that didn't exist
in the clearly two-class communist era
been in any shape a classless society—
even under the religion called Marxism-
Leninism, which in theory eschews all
classes. It is, perhaps, a tribute to the human
condition, and particularly the Russian
soul, that some will succeed wonderfully
and many will fail miserably.
Throughout Russia’s transitionary
period of true oligarchy and into the
present proto-capitalist era, however, the
state maintained its grip on at least some
portions of the central sources of wealth.
Oil, of course, remains paramount in this
respect and when private oil companies
— or their oligarchs — overstepped their
political bounds, or failed to pay proper
obeisance to the ruling elite, they found
themselves quickly knocked back down
to size, or shipped off to Siberia as the
case may be (witness Yukos head Mikhail
Khodorkovsky).
Today, in full hybrid fl ower, however,
the nation and its key fi nancial
engines are fl ourishing.
Stock and bond markets
are strong. Foreign companies still
clamor to invest or, having invested do
their utmost to maintain their small
slices that are never a controlling stake,
in major Russian conglomerates where
the state still maintains its majority
control. A thriving middle class has
begun to develop — a phenomenon that
never existed in the clearly two-class
communist era. In short, this system is
working, quite admirably, at least for
the moment.
None of this is to suggest, however,
that such a hybrid of state- and democratic-capitalism
can’t exist all but indefi
nitely. Clearly for the Russian people
it works. Since the time of Ivan the Ter-