Capitalism Assisted by State
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State Assisted Capitalism
States engage themselves in macroeconomic planning having more independent and autonomous power over the economy. The aspect is characterized by a stronger state regulation and control over the economy, a concept commonly used by the East Asian countries such as China, Japan, and Korea. The countries in the region have measures put in place to accelerate their economic development and avoid collapse or stagnated growth of their economy. The states have policy measures that will ensure a boost in their economy. For instance, Japan had its economy much on intervention by bureaucrats to lead the industrialization drive.
Central governments, therefore, engage themselves directly into controlling their economy and guiding the development process through engaging relevant agencies and developing controls. The companies involved get empowerment to implement measures and standards to shield the economy from failure. The government engages in the monopolistic pricing of products and provision of collective goods whose supply is compromised in the market. It is common practice however, in other governments that government will provide the products that other key market players cannot produce or subsidize. State assisted capitalism involves direct intervention of the government for economic purposes.
In the current economic crisis, state-assisted capitalism is not a possible way of controlling free market capitalism in the United States. In an economic crunch, nations require more funds from foreign direct investment to boost their currency ratio and maintain their economic performance. Having regulations that bar or restrict investors from participating in the development or state controlling industries within the economy, limits income to boost the performance. Again, the government can have indirect control of the economy through restriction of the private sector to maintain balance of performance to contain the crisis.