Year LIII, 2011, Single Issue, Page 63
The Difficult Balance
Between State and Market
Between State and Market
Throughout the world, people are asking themselves how dramatically society has been, and will continue to be, affected by the current financial crisis, and in various quarters efforts are being made to find the formula that might allow the economy to get back on its feet. It is wondered whether the market still has the ability to trigger a new phase of growth, or whether this task falls, instead, to the states. Market capitalism is being compared with state capitalism, which is becoming increasingly prominent in the global economy, also through sovereign wealth funds. In short, there is a growing awareness of the need to achieve a more equitable balance between state and market. But what chance do states increasingly burdened by public debt, like the USA and the European countries, really have of starting a new cycle of growth and development? To try and answer these questions it is worth looking at works published in 2010 by Ian Bremmer, Joseph E. Stiglitz and Jacques Attali.
The Free Market.
One of the most predominant currents of thought in economic-political debate over recent decades has been the one which argued that the spread of economic liberalism was enough, on its own, to produce development and generate wealth. In this regard, the end of the Cold War and of communism seemed to set the seal, definitively, on the victory of capitalism and the market economy; the buzzwords of this success were globalisation, privatisation, deregulation, and network enterprise. The state seemed to be assuming an increasingly marginal role and the idea of government was replaced by that of “global governance.” The neoliberal ideology, advocated in the 1980s by Ronald Reagan in the USA and Margaret Thatcher in the UK, prevailed: this approach, which encouraged deregulation and privatisation in many fields, such as energy, transport and telecommunications, was adopted by a growing number of countries. And, in fact, it did help to boost production, trade and employment. As Bremmer points out, “Between 1980 and 2002, world trade more than tripled. The costs of doing business — especially in transportation and communications — fell sharply. […] Tariff rates (as a percentage of total import costs) were halved during this period in America, were more than halved in Europe, and fell by 80 percent in Canada”.
However, the definitive boost for the further growth of capitalism and globalisation was to come not from the West, but from Asia; in this regard, China, from the 1990s, emerged as the real driving force, and in 2001 strengthened its position enormously by joining the free market system. There is no doubt that China’s accession to the WTO changed the forces in the field, ushering in new balances and rapid changes in the economic rankings, helping to trigger enormous movements from and to Asia, and creating new imbalances in the accumulation of capital reserves. By opening its doors to capitalism, starting with the coastal cities under Den Xiao Ping, and continuing in this direction under Hu Jintao, this vast area of the world, long excluded from the global market economy, has succeeded in re-establishing itself, gradually, in the arena of global commerce, yet without the Beijing government having to relinquish its strong control over the entire Chinese economy. Growing investments by large global enterprises have, in turn, led to an increase in transactions, investments and business ventures, with new forms of financial investment, all in the pursuit of big business.
In the 1990s, particularly in the United States, the doctrine that the market is global and every obstacle to international free trade must be removed was used to justify even stronger deregulation (approved by the IMF), which started with the financial sector: “ ‘Financial and capital market liberalisation’ meant that foreign banks could get high returns on their loans, and when loans went bad, the IMF forced the socialisation of the losses meaning that the screws were put on entire populations to pay the foreign banks back”. “Global financial institutions pressed them [the governments] to embrace US-endorsed liberal economic theories, known collectively as the Washington Consensus”; this “comprises three major ideas: fiscal and budgetary discipline; a market economy, including property rights, competitive exchange rates, privatisation, and deregulation; and openness to the global economy through liberalisation of trade and foreign direct investment”.
As Stiglitz has remarked, “The sad truth is that in America’s financial markets, innovations were directed at circumventing regulations, accounting standards, and taxation”, and, in particular, at invalidating the Glass-Steagal Act of 1933 which, in order to avoid the clear conflicts of interest that arise when the same bank issues bonds and equities and grants loans, had separated commercial banks (which lend money) from investment banks (which organise the sale of bonds and equities). Indeed, the purpose of this law was, in part, to stop those, in commercial banks, responsible for the safekeeping of the money of ordinary people from engaging in the kind of risky activities typical of investment banks, whose purpose, instead is to maximise the profits of those who are already rich. Its repeal marked the end of the separation between investment banks and commercial banks and the investment banks have since taken over. Indeed, the American mortgages crisis, which was at the root of the Western capitalist system’s most severe recession since 1929, was due, quite simply, to the disruption of these delicate regulatory mechanisms, which allowed the financial institutions, against all logic, to tie the value of real estate to highly speculative products.
In this way, “the free-market ideology turned out to be an excuse for new forms of exploitation. ‘Privatisation’ meant that foreigners could buy mines and oil fields in developing countries at low prices. It also meant they could reap large profits from monopolies and quasi-monopolies, such as telecommunications”.
The role of the global enterprises.
There can be no doubt that the role and nature of the global enterprises have been fundamental factors in the development of world trade and the global economy over the past half century. Indeed, these enterprises have, in many cases, become the states’ financial and economic competitors. This competitive logic was already a factor in the activity of the multinational corporations formed after the Second World War, as already testified by Jean Jacques Servan-Schreiber in the 1960s. Since then, however, the phenomenon has undoubtedly undergone a quantum leap: “In 2000, a report by the Institute for Policy Studies dropped a bombshell: Comparison of corporate sales of the largest multinational companies with the gross domestic product of the world’s wealthiest countries revealed that 51 of the world’s largest economies were corporations; just 49 were countries.” Furthermore, “in 2008, the UN’s World Investment Report noted that the number of multinational companies had grown from 7,250 in the late 1970s to more than 60,000 three decades later”.
These figures explain why many are now wondering whether it is still possible to think in terms of strong domestic companies as the bedrock of a country’s economic growth. Domestic companies were always considered the driving force of development and growth in traditional economic systems, but in the era of globalisation, the logic of profit maximisation means that these companies, especially those operating from small states, are neither bound nor motivated to work to improve the national system to which they belong, precisely because it has ceased to be fundamental to their survival. Indeed, once it has been milked for all the funding and support it can give, the national system is actually perceived as an obstacle to the expansion of their activity. Therefore, these companies become increasingly interested in the policies of the states that they see as targets for their production and commercial activities.
As long ago as 1996, Susan Strange pointed out that “One incidental consequence of such global shifts will certainly be to increase the separation of firms from the governments of their home bases. American, British, even Japanese firms, finding new markets where demand is growing, will also find they need to pay more heed to the wishes of whatever central or local, state or non-state authority governs these new markets”. Still in the 1990s, Robert Reich identified network enterprises, or global webs, as the new business models that were profoundly changing the production system and forms of development: “National champions everywhere are becoming global webs with no particular connection to any single nation”. “In the older high-volume economy, most products — like the corporations from which they emanated — had distinct nationalities. Regardless of how many international borders they crossed, their country of origin [...] was never in doubt”. “The old American multinational corporation was controlled from its American headquarters. Its foreign subsidiaries were indeed subsidiary”. In this framework, ownership and control were indisputably in American hands and strategic planning was carried out in the USA. But with the new web of enterprise, “instead of a pyramid […] the high-value enterprise looks more like a spider’s web. Strategic brokers are at the centre, but there are all sorts of connections that do not involve them directly, and new connections are being spun all the time”. “By the 1990s, most ‘trade’ no longer occurred in arm’s-length transactions between buyers in one nation and sellers in another, but between people within the same web. […] They may be part of the same multinational corporation, collecting salaries from one source, or they may be working in different companies that share in any profits from the joint venture, or they may simply contract with one another to perform specific services for a preestablished fee”.
In the face this new global economic production system, the problem of how best to govern it ought to have been tackled seriously, steering clear of the illusion that it was enough to rely on a vague concept of global governance. Indeed, as Susan Strange pointed out, “The implicit assumption conveyed by the two words, ‘global’ and ‘governance’, is that government is being achieved on a world scale by a world authority. Yet the truth, as any student of inter-governmental organisations is well aware, is that the limits and the nature of any inter-governmental bureaucracy’s decision-making power are set by the most powerful of its member governments. The international organisation is above all a tool of national government, an instrument for the pursuit of national interest by other means.[…] Too often, a regime is represented as merely the consequence of a harmonising process, through which governments have coordinated their common interests. The power element is underplayed. Yet in reality, many international regimes have not so much been the result of a coming-together of equals, but the end-result of a strategy developed by a dominant state, or sometimes by a small group of dominant states. […] Even the secretariats of the international institutions concerned are subliminally socialised into administering an international ‘order’ that is by no means neutral either in its intentions or its consequences”.
One can hardly find it surprising, therefore, that, after the economic and financial crisis of 2008 and with the enormous limitations of the laissez-faire approach laid bare, the scene is once again dominated by the active presence of the states in the economy (even though some economists, staunch defenders of the free market, would still have us believe that the current difficult phase is merely a contingent effect of the cyclical fluctuations of capitalism, which alternates expansionary phases with periods of recession). According to Stiglitz, “September 15, 2008, the date that Lehman Brothers collapsed, may be to market fundamentalism (the notion that unfettered markets, all by themselves, can ensure economic prosperity and growth) what the fall of the Berlin Wall was to communism. […] With the collapse of great banks and financial houses and the ensuing economic turmoil and chaotic attempts at rescue, the period of American triumphalism is over. So too is the debate over ‘market fundamentalism’. Today only the deluded (which include many American conservatives, but far fewer in the developing world) would argue that markets are self-correcting”. Moreover, as Stiglitz also points out, over the past twenty-five years, the US banking system, which was the root of the crisis, enjoyed great freedom; what is more, far from correcting itself, it was repeatedly bailed out by the state.
The severe problems currently being experienced by the economies of most of the world have, as Stiglitz has remarked, rekindled the debate on what might be the most effective type of economic system. At this point, however, it is worth pointing out that all this can certainly not be interpreted as the downfall of capitalism, in favour of the communist regimes, given that, as Bremmer has pointed out, “the clearest sign of communism’s demise came from the international financial crisis”; after all, “if the turmoil that these crises generated couldn’t breathe life into the communist corpse, it’s hard to imagine what could”.
All this explains clearly why the debate on the future of world economic development is once again focusing on the choice between “market capitalism” and “state capitalism.” The former tends to underline that the freedom of companies in the marketplace should be tempered by a discrete presence of the state, to ensure respect for the rules; the latter instead emphasises the key role that each state should play in promoting, directing and supporting, in the marketplace, the different national economies. In any case, one cannot help wondering, given the global size of the market, whether the states, particularly the smaller ones, really have the capacity to enforce the rules, and whether, in the different historical periods, the economic forces and the forces of production have ever enjoyed truly equal starting conditions and conditions of action. Indeed, according to Bremmer, “There are two fundamental differences between free-market and state capitalism. First, policy makers don’t embrace state capitalism as a temporary series of steps meant to rebuild a shattered economy or to jump-start an economy out of recession. It’s a strategic long-term policy choice. Second, state capitalists see markets primarily as a tool that serves national interests, or at least those of ruling elites, rather than as an engine of opportunity for the individual. State capitalists use markets to extend their political and economic leverage, both within society and on the international stage”. As Bremmer also points out, “Even if state capitalism isn’t around a century from now, the financial crisis and the global recession have ensured that it will enjoy many more years of robust health. American-style free-market capitalism and the idea of globalisation have taken plenty of blame for the meltdown”.
In short, communism is hardly back in vogue, but what does emerge strongly is the idea that capitalism must be placed (or, more simply, go back to being) at the service of the states, especially those of continental dimensions and those that are richest in primary resources (energy and other types).
Sovereign Wealth Funds.
There exist enterprises, few in number but extremely powerful, which act as material executors of the policy of the states that created them. They are called sovereign wealth funds. Although they are not a new invention — indeed, they already existed in the 1950s —, the start of their real development and rise to prominence dates back only to 2005. There now exist around fifty sovereign wealth funds (half of which came into being after 2000), including government-owned oil companies that “now control three quarters of the world’s crude oil reserves”. “These are state-managed pools of excess cash that can be invested strategically. Governments can use the profits they generate for political purposes. They can also use the funds themselves, primarily abroad. […] Sovereign wealth funds draw their capital from three main sources. First, there is foreign currency earned from the export of natural resources, mostly oil and natural gas, a major source of income for Russia, Arab states of the Persian Gulf and several North African countries. Second, there is the extra cash left over from a positive balance of trade. For example, China finances sovereign wealth funds with the foreign currency it earns by exporting huge volumes of manufactured goods to the United States, Europe and Japan. […] Third, sovereign wealth funds are occasionally bankrolled via direct one-off transfers from a federal budget or foreign-exchange reserves. These funds generally include a range of financial assets in their portfolios with varying degrees of risk: foreign currency, stocks, government and corporate bonds, precious metals, real estate, and other assets. They buy stakes in (and sometimes majority ownership of) domestic and foreign companies, including hedge funds and leveraged buyout firms”.
As an example, in 2009 the most important commodity-based sovereign wealth fund, in value terms, was the Abu Dhabi Investment Authority with its assets worth 627 billion dollars. Commodity funds are the type created with cash from the sale of raw materials, in this case, oil, while non-commodity funds are created with a surplus of foreign currency derived from exports. If we consider this latter type, we find that the first, the second and the fourth most important are Chinese: respectively, the SAFE Investment Company, with assets worth 347 billion dollars, the China Investment Corporation (almost 289 billion), and the National Social Security Fund (146.5 billion). Third place is filled by the Government of Singapore Investment Corporation, with assets worth 247.5 billion dollars. China is, therefore, clearly the world leader in terms of sovereign wealth funds. Even though the financial crisis means that these figures are now indicative and, to an extent, open to reappraisal, there can be no underestimating the importance of the role played by these enterprises at global level.
In Bremmer’s view, they are now a threat to the free markets, since “those who manage their investments don’t answer to shareholders. A sovereign wealth fund has one stakeholder: its parent government”.
The Effects of the Crisis on the Western World and the Problem of the Public Debt.
Western countries, with the exception of Norway and Canada, make less use of sovereign wealth funds on account of the now chronic lack of surplus in their trade balances and balances of payments, which are mostly in deficit, and their lack of raw materials and energy sources.
One of the main differences between the countries of the Western world and those that have adopted a clear strategy of state capitalism is, therefore, the fact that the former, compared with the latter, have an economic situation greatly conditioned by the enormous public debt they have accumulated. This debt already existed prior to the crisis, but it has been worsened by the bailout policies that the states have had to implement in order to keep their respective banking and production systems afloat and thus avoid the risk of political and social turmoil. Indeed, even though the effects of the economic crisis have been felt in most of the world, some states have been hit harder than others, in particular those that have always been leaders of the world economy, like the USA, the EU countries and Japan. For this reason, the United States, above all, has had to review its stance on the economy. Indeed, in a very short space of time, this once great supporter of a highly liberal economy has become a proponent of an economy strongly dominated by the presence of the state (to an extent previously only seen during the two World Wars). It is, indeed, in this spirit, i.e., to facilitate market recovery and attempt to create new jobs, that the American governments implemented the US bank bailout plans.
Attali recently pointed out that the highest net public debt in 2010 was that of Japan, standing at 204 per cent of GDP, compared with a US public debt of 11,000 billion dollars (54 per cent of GDP and 674 per cent of American income tax receipts) and a European public debt amounting to 80 per cent of EU GDP. The truth is that whereas the United States, despite having the world’s largest debt, seems able, to an extent, to offload this debt onto the rest of the world (partly through its policy on the dollar), the EU countries, not having a true European plan, are not in a position to do the same. It is no secret that, in this setting, the situation of five countries, now considered at risk of default, has become particularly serious. These are the so-called PIIGS countries (Portugal, Ireland, Italy, Greece and Spain). Attali has highlighted the dramatic nature of this situation, pointing out that at the current rate, the sovereign debt of the leading Western countries will soon exceed the wealth they are producing and, contrary to what happened each time the debt exploded in the past, this will happen without there first being a phase of strong growth or inflation. In his view, therefore, the collapse of the entire West is a plausible scenario, albeit as little foreseen today as similar ones were in the past (i.e. the collapses of Venice, Genoa and Madrid). Attali is in absolutely no doubt that the entire Western world has entered a danger zone in which state and market are watching each other closely, each wondering which of the two will pull the trigger first. He stresses that if such an outcome is to be avoided, people need to be made to see that the world is on the edge of a precipice and that the worst really could happen. Since public debt stems from difficulties in increasing revenue so that it matches the rate of spending, Attali says, the real solution to the debt crisis is, in fact, growth. This demands competitive investments, which in turn require public infrastructures.
State Capitalism and Market Capitalism in Europe.
In the various European countries, the presence of the state in the economy has always been important above all in order to support a certain model of welfare state. As Bremmer points out, the European model of market capitalism has always been much less liberal than the American version, as the “European social-democratic model relies more on the state as guardian of the rights of the individual”. The fact that Europe was hit by the economic and financial crisis precisely at a time when it appeared to have lost part of its role in the world has thrown into question not only the development prospects, but also the very survival of the social model created by the Europeans over the past two centuries.
Attali has summed up the situation effectively. As regards the sovereign debt problem, he says, some believe that the European Union as a whole (and particularly the eurozone) is in a favourable situation, very different from that of other countries and continents. After all, they see that the EU budget is quite balanced, the single currency is strong, Europe has a high household saving rate, and the states are willing to pay their debts. But while all that was certainly true prior to the crisis, a closer look shows that things now are far from reassuring. The public finances of the EU countries are not under control at all, as the markets are making more apparent by the day. According to official figures, which Attali considers greatly underestimated, the period between 2009 and 2010 saw public debt rising — mainly on account of money poured into the banking crisis — by an average of fourteen and a half percentage points of GDP (and in some cases, like the UK and Ireland, by as much as thirty points!), an enormous amount. Some of these countries already have national debts greater than 100 per cent of GDP. Practically everywhere, the loans needed each year exceed the total of the budgets. In 2010, the EU member states, to balance their budgets, had to borrow 1600 billion euros, the same as the United States. Domestic savings, in particular life insurance, brought them 900 billion; the rest came from abroad, i.e. from Japan, from China and from sovereign wealth funds. Some countries are starting to have difficulties obtaining loans: Greece Spain and Portugal pay particularly dearly for them, thereby only increasing their debts. It will not be long before they are all insolvent. Yet, as Attali remarks, even in the face of this trend, there is absolutely no sign of a shared idea of the actions that need to be implemented, no harmonisation of national savings collection policies and, in particular, no common policy on the taxation of savings and capital income. Many derivative products are prohibited in some countries but authorised in others. There is no pan-European financial markets regulator and no equivalent of the Securities and Exchange Commission (SEC).  As Attali points out, this fragmented management of European savings means that the EU’s smaller countries, compared with the others, are paying more for their loans: this difference in the cost of borrowing is in the order of fifty basis points (0.5 per cent) between Germany and Austria, almost as great between Germany and France, and considerably greater (six hundred basis points) between Germany and the other countries of the EU, especially when the latter are in difficulties. If social and tax legislation is not changed, interest rates remain stable and there are no further banking crises, the public debt of the EU countries will, as we have seen, reach 100 per cent of GDP by 2014.
Furthermore, looking ahead, the impoverishment of the European economy is destined to increase also as an effect of the relocation programmes being undertaken by companies in the EU countries, which are tending to move their production activity to areas with lower labour costs and fewer regulations and social constraints. Indeed, these companies are finding Europe a less and less attractive setting in which to plan medium- and long-term investments, not least because they are confronted with institutional interlocutors, both national and European, that are often pursuing conflicting policies, outside any form of coherent planning framework. Moreover, the single European states are too small or too poor in raw materials to be able to create businesses capable of competing on the world market and they are still not in a position, given the absence of a European political union, to propose a European development plan linked to a common foreign and security policy. All this explains why the phenomenon of unemployment, particularly youth unemployment, has, as in the 1970s, come to the fore once again. And it is a problem that is destined to worsen as China, in its aggressive bid to penetrate even those areas (like Africa and the Mediterranean) that have always been economically and commercially linked to Europe, increasingly takes away Europe’s markets and supply regions. This is the reason why, in the absence of alternative policies, no states, including the European ones, have any qualms about making use, directly or indirectly, of protectionist measures. Indeed, even though 2009 saw the G20 countries undertaking not to raise protectionist barriers “the World Bank found that during the five months leading up to that meeting, seventeen of the nineteen group members implemented forty-seven measures that restricted trade at the expense of other countries”.
How to Try and Stem the Crisis and Start Fresh Development in the EU.
Moving from an analysis of the situation and the difficulties we face to the possible solutions, the picture becomes more confused. Remaining in the European framework, Attali believes it will be necessary, over the coming years, to reduce the European countries’ public debt, albeit very gradually, and to increase their GDP, by raising taxation or reducing expenditure. These are, of course, very difficult actions to take, as reducing public spending could further worsen the depression.
For this reason, Attali believes, the European Union needs to find new instruments for gathering funds. A possible one is the emission of European bonds, a debt that Attali defines “good”, because it would be “collective”. But to realise this project, Attali warns, there would have to be a European lender of last resort, which could not be either the European Central Bank (responsible for the currency), or the European Investment Bank (which borrows long term to provide long-term financing), but would have to be a new institution — a European Treasury Agency created with the objective of providing the European countries with new short-term financial resources to alleviate their current sovereign debt. This European Treasury Agency would issue ‘European bonds’ on behalf of the Eurogroup member states, or some of them. Attali suggests that a mechanism of this kind would immediately reassure the markets and put an end to the liquidity crisis affecting some Eurogroup countries. But even this, he explains, would not be enough, since the debtor countries would not readily enter into loans unless the euro were solid. It is, therefore, also a question of developing better European financial management: the Eurogroup countries or, better still, all the EU member states, need to equip themselves with institutions capable of monitoring the European financial players, of prohibiting financial institutions from working with offshore financial markets and tax havens outside the EU, and of outlawing, according to a veto that is the same for everyone, the speculative use of credit default swaps. What is needed, to this end, is a European budget fund (separate from the European Treasury Agency) able to provide countries in difficulty with budgetary resources; this fund should, in turn, be financed by budgetary resources in proportion to the GDP of the member states, or on the basis of their conduct with respect to the Maastricht Treaty rules.
Nevertheless, the sticking point continues to be growth. In this regard, Attali is quite clear, pointing out that in order to be to able to repay its public debts in a continuous manner, Europe needs to bring about strong and sustained growth. After all, the European Union will have to go on funding, through taxes and without loans, its collective consumption, i.e. its subvention and operating expenses. To this end it will have to increase the Community budget ceiling while nevertheless retaining the balanced-budget obligation; in the event of a crisis, it would, while waiting for equilibrium to be restored, have to increase its means of funding the operating budgets, turning, to this end, to the European Treasury Agency and the European budget fund. To conserve its social model, it will also have to find the means with which to fund its role as guarantor, particularly in the areas of health, pensions, welfare and employment. As a sovereign entity, the European Union must, ultimately, finance through long-term loans only the investments of the EIB, the true European sovereign fund. In particular, as envisaged by the Lisbon strategy, the European Union must also invest massively in knowledge, technology, culture, social welfare, education, health and the environment. Attali is well aware that these are vast and extremely long-term undertakings, which seem inconceivable in today’s suffocating economic climate. However, he feels that they need to be pointed out, not least in order to show that the best is not impossible and that there does exist a feasible solution to the current crisis, in this way helping to usher in that which must prove to be a key stage in the European adventure. In short, he is convinced that, once again, it will have taken a crisis to make Europe stronger.
Attali refers to Europe as a sovereign entityyet he fails to consider the question of how and in what framework this condition can be achieved. And yet one need only look at the state of the European budget, increasingly a prisoner of national constraints and contributions and submitted only for form’s sake to the scrutiny of the European parliament, to realise that Europe does not even have any own resources, independent of the policies of the single states, with which to finance truly European plans. The fact is that when Attali, like other analysts and scholars, talks of the European Union’s prospects for economic growth, he is actually thinking of what the Eurogroup should be doing, yet without really understanding how these two frameworks (the EU and the Eurogroup) could and should intersect and operate. The point is that European sovereignty is not yet a reality; it still needs to be constructed. In truth, political unity is the landmark that the Europeans need to reach in order to be able to implement at least some of the technical solutions that have been proposed. And unless they do so, the current growing “cost of non-Europe” is destined to be translated into a dramatic political debt that will burden Europe’s future generations and also have a negative impact on prospects for global growth.
 Ian Bremmer, The End of the Free Market. Who Wins the War Between States and Corporations, Portfolio, a member of the Penguin Group, USA, 2010.
 Joseph E. Stiglitz, Freefall. America, Free Markets, and the Sinking of the World Economy, Norton & Company, New York-London, 2010.
 Jacques Attali, Come finirà. L’ultima chance del debito pubblico, Rome, Fazi Editore, 2010.
 Ian Bremmer, op. cit., pp. 33-34.
 Joseph E. Stiglitz, op. cit., p. 221.
 Ian Bremmer, op. cit., pp. 33 and 320.
 Joseph E. Stiglitz, op. cit., p. 8. The Glass-Steagal Act was actually repealed with the passing, in 1999, of the Gramm-Leach-Bliley Act.
 Stiglitz points out that the bubble was driven by the perverse lending policies adopted by banks which accepted, as security, assets whose value was inflated by the speculative bubble, Joseph E. Stiglitz, op. cit.
 Joseph E. Stiglitz, op. cit., p. 221.
 Jean Jacques Servan-Schreiber, La sfida americana, Milan, Etas Kompass, 1968.
 Ian Bremmer, op. cit., p. 31.
 Susan Strange, The Retreat of the State. The Diffusion of Power in the World Economy. Cambridge University Press, Cambridge, 1996, p. 193.
 Robert B. Reich, The Work of Nations, Vintage Books, New York, 1992, p. 131.
 Robert B. Reich, ibidem, pp. 111-112 and p. 110.
 Robert B. Reich, ibidem, pp. 87 and 113.
 Susan Strange, op. cit., pp. XIII-XIV.
 Joseph E. Stiglitz, op. cit., p. 219.
 Stiglitz has expressed the view that while the markets are the beating heart of any efficient economy, they cannot work on their own. He believes that economies depend on a balance between the respective roles of the markets and of the state. In the past 25 years, he says, America has lost this balance and allowed this loss of balance to spread to the rest of the world. Joseph E. Stiglitz, op. cit.
 Ian Bremmer, op. cit., p. 18.
 Ian Bremmer, ibidem, p. 77.
 Ian Bremmer, ibidem, p. 245.
 Ian Bremmer, ibidem, p. 15.
 Ian Bremmer, ibidem, pp. 101-102.
 If we add together the assets of the three funds mentioned, we arrive at a total of 782.5 billion dollars controlled by the Chinese government (source: Sovereign Wealth Fund Institute Inc. 2008-2009).
 Ian Bremmer, op. cit., p. 102.
 Jacques Attali, op. cit., p. 89.
 Jacques Attali, ibidem, pp. 15-19.
 Ian Bremmer, op. cit., p. 246.
 Jacques Attali, op. cit., p. 161.
 Jacques Attali, ibidem, p. 162.
 Ian Bremmer, op. cit., p. 220.
 Jacques Attali, op. cit., pp. 164-165.
 Jacques Attali, ibidem, pp. 167-168.
 Jacques Attali, ibidem., pp. 169-171.