Here's Dan Drezner, on the rapid growth of sovereign wealth funds, the huge money pools that China and Middle Eastern nations are accumulating (by selling stuff to developed nations) and using to invest in Western corporations. The implication is that we're not at the End of History after all. Centrally planned economies failed under communism because they were insular and inefficient. But can centrally planned economies such as China's stay in business by trading with the West, both as vendor and investor? And is this a good thing for the "liberal free-market democracies"?

Looking at the long term, sovereign wealth funds are one component of an alternative development path, suggests a possible rival to liberal free-market democracy. In state-led development societies, governments could use sovereign wealth funds, state-owned enterprises and banks, national oil companies, extensive regulation, and other measures to accelerate economic development, buy off dissent and promote technology transfer. If this model proves sustainable over the long run – and this is a big if – it could emerge as a viable challenger to the liberal democratic path taken by the advanced industrialized states. More countries might think of sovereign wealth funds as a signal of being a “successful” country. One could then envision the proliferation of such funds – even in situations in which there is no economic rationale for its creation.