This week, as the world prepared for the G20 summit, I found myself sitting in a London office with two middle-aged executives, one the owner of a Vancouver-based uranium-mining company and the other a Russian executive whose Kremlin-owned nuclear conglomerate had just bought a controlling stake in the Canadian company; together, they hoped to dominate the uranium scene in Kazakhstan.
Twenty years ago, that sentence would have been too preposterous for science fiction. Ten years ago, the North American company would have been talking about buying its Russian counterpart, at a bargain price, if it could find a way to buy or bribe its way past the government officials who controlled it.
This weekend, as the humbled democratic leaders of the world's major market economies meet in Toronto, as equals, with the authoritarian leaders of China, Russia and Saudi Arabia, there is an unprecedented sense that the second group has the upper hand. This G20 meeting has become the signature event in the showdown between the market capitalists and the state capitalists.
The state capitalists, who use government-owned mega-corporations to placate their publics and keep their unelected regimes in power, are enjoying a moment of Schadenfreude. Most of the major Western economies have had to take temporary ownership of banks and big corporations - in the case of the United States and Britain, the very largest banks and corporations.
The world is no longer a contest between the pure state and the pure market; it is a contest between two very different state-market compacts, one free and risky and the other restricted and regime-controlled.
At the moment, the two need each other. The Canadian uranium executive I met, Jean Nortier of Uranium One, explained that his company can become the largest uranium player in Central Asia only with the help of the sort of enterprise that has a big, powerful, well-armed government behind it - a government that has a web of political relationships with Kazakhstan. Likewise, the Kremlin conglomerate Rosatom needed the talent-attracting credibility and stock-market earnings of an open-market company.
And so it is at the G20. The headline event leading into the summit is China's pledge to stop artificially deflating its currency, the yuan, to keep its export prices low. U.S. President Barack Obama will be devoting most of the summit to meetings with Chinese President Hu Jintao and other Asian leaders in efforts to get China to honour that pledge. The cash reserves of the Gulf states and China are virtually the only things keeping the world from falling apart at the moment, and we're essentially begging them to free them up.
Even two years ago, it seemed axiomatic that China, and to a lesser extent Russia, were passing through an autarkic phase, as the West once did, and that by being exposed on a daily basis to the competitive economies of the larger world, they would inevitably shift into a more open system.
But the closed systems are now having their day. People within China talk about a "Beijing consensus" to describe a utopia in which the Chinese party-run model is imposed on a large part of the world.
This is based on the rather popular, but incorrect, Chinese and Russian belief that individual rights and open markets were Western inventions that were imposed on the world by Washington, replacing some pre-existing state of affairs, and that the postwar "Washington consensus" of reasonably open borders and markets was not a dull statement of widely held commonsense values but rather an outside intervention that could be replicated using other, less open economic models.
It is an erasure of history: The Enlightenment, we too often forget, took place simultaneously in the East and the West, and its values have been Eastern values for two centuries. Forgetting this, people in Beijing and Moscow try to claim that their state-capitalist economies are natural expressions of their traditional cultures, found in Confucius and Tolstoy and going back centuries. This cultural-determinist mythology is also repeated as a cautionary certainty in Western books like Martin Jacques's When China Rules the World and Stefan Halper's The Beijing Consensus.
I've seen government aides from several countries headed to the G20 carrying copies of the American writer Ian Bremmer's more modest book on state capitalism, apocalyptically titled The End of the Free Market. He merely warns that the Moscow-Beijing model will be dominant for another decade at least, though at least he recognizes that there is nothing cultural or natural about it.
Mr. Bremmer is most interesting in his remedy, in which he revisits the old Cold War term "mutually assured destruction": This time not nuclear, but economic. By keeping the state capitalists dependent on our spending, he argues, and their funds dependent on our debt, they will be forced to dance with us until they learn the proper steps. It's not the most satisfying argument, but it's one that I suspect is well understood by those uranium miners.
Doug Saunders