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ible, and before, Russians have sought
a strong leader. Western style political
democracy has never taken root and may
never. An oligarchy, whether aristo-
cratic, political or economic, has always
ruled. Yet elsewhere, the likelihood of a
successful hybrid maintaining more
than a meta-stability is far slimmer.
Certainly, there was every motive for
Dubai to turn its back on the fl agrant,
bordering on vulgar, expansion and ex-
cesses of the early 2000s when the capital
(and debt) base on which its system of
democratic capitalism was being con-
structed simply imploded after the global
recession. Yet, with the help of neighbor-
ing big brother Abu Dhabi, it managed
to avoid full nationalization of its falter-
ing enterprises. Admittedly, most were
majority-owned anyway by the govern-
ment. But a full seizure of some of these
corporations risked leaving this vibrant
nation with the international and credit
rating of the most abject bankrupt when
(not if, mind you) the global system has
returned to full recovery, hopefully in
the not-too-distant future. There were
other motivations here as well, of
course—largely the deep stakes that real
Dubai “citizens” retain in virtually every
enterprise of the emirate. But Dubai’s
development is ultimately founded on
the profi t motive and that is the heart of
democratic capitalism, even in a nation
that is ruled by an aristocracy.
It is equally imperative that India resists
the siren call of a return to state
capitalism. The form this must take, of
course, will be different from any other,
as indeed any nation’s form of political
and economic system and how they interact
is different from any other. American
capitalism and democracy, for in-
C OMPARATIVE PLANNING
stance, differs from the system in
England, France, Germany, even Canada
where parliaments rule. At the same
time, there is a difference between a
large and vigorous public sector and fullblown
state capitalism. Indeed, in a
democratic system there is certainly a
role for a state sector that may take on
such essential, potentially only marginally
profi table, services as public transport,
water supply, electricity, and the
post (though in each of these cases there
are certainly instances where the private
sector has assumed such functions to a
more or less profi table or effi cient degree
instead of or alongside the public sector).
In most nations, and particularly India,
it has become impossible to retrace
the steps of a system that once set on a
With the help of Abu Dhabi, Dubai
managed to avoid full nationalization
of its faltering enterprises
new direction assumes a momentum of
its own. France tried to do so, all but
catastrophically, in the 1980s. Many
communist states, from Cuba to Central
Europe, did so in the early to mid-twentieth
century. It is unlikely that any nation
will try such sweeping repositioning
in the future. And with the increasingly
tight interlinkage of the global economy
in these days of instant communications,
that is a very good thing indeed.
(Author's last book was "A Shattered
Peace: Versailles 1919 and the Price We
Pay Today" and he encourages readers to
follow him on Twitter @DavidAndelman.
The views expressed in the write-up are
personal and do not reflect the offi cial
policy or position of the organization.)
THE INDIA ECONOMY REVIEW
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