State Behemoths Are Devouring the Global Economy

We pundits continue to struggle to coin a suitable moniker for our current era. The “age of post-liberalism” risks defining something by its absence. The “age of big government” belies the fact that government has been getting bigger for decades. “Revolution” and “transformation” are so generic as to be meaningless. In a recent column I floated the idea of the “age of monopoly.” Having read a new book by two academics — The Spectre of State Capitalism by Ilias Alami and Adam Dixon — I am moved to suggest a new candidate: “The age of state capitalism.”

Alami, a development economist at Cambridge University, and Dixon, who holds the Adam Smith chair in sustainable capitalism at Edinburgh Business School (part of Heriot-Watt University), produce some astonishing figures to demonstrate how rapidly state capitalism has grown in the 21st century. Sovereign Wealth Funds (SWFs) controlled more than $11.8 trillion in 2023, beating hedge funds and private equity firms combined, up from $1 trillion in 2000. State-owned enterprises (SOEs) had assets worth $45 trillion in 2020, the equivalent of half of global gross domestic product, up from $13 trillion in 2000. The Organization for Economic Cooperation and Development calculates that half of the world’s 10 biggest companies and 132 of its 500 biggest are SOEs. The state is not only back. It has burrowed into the heart of the capitalist economy — running companies (often across borders) and shaping capital markets.