OK, I am re-reading The Economist (even a broken clock shows the correct time twice a day, right?) and in its latest issue Zanny Minton Beddoes gets the big picture right, I think:
Global integration, in large part, has been about the triumph of markets over governments. That process is now being reversed in three important ways.
First, Western finance will be re-regulated. At a minimum, the most freewheeling areas of modern finance, such as the $55 trillion market for credit derivatives, will be brought into the regulatory orbit. Rules on capital will be overhauled to reduce leverage and enhance the system’s resilience. America’s labyrinth of overlapping regulators will be reordered....
That leads to the second point: the balance between state and market is changing in areas other than finance. For many countries a more momentous shock over the past couple of years has been the soaring price of commodities, which politicians have also blamed on financial speculation. The food-price spike in late 2007 and early 2008 caused riots in some 30 countries. In response, governments across the emerging world extended their reach, increasing subsidies, fixing prices, banning exports of key commodities and, in India’s case, restricting futures trading. Concern about food security, particularly in India and China, was one of the main reasons why the Doha round of trade negotiations collapsed this summer.
Third, America is losing economic clout and intellectual authority. Just as emerging economies are shaping the direction of global trade, so they will increasingly shape the future of finance. That is particularly true of capital-rich creditor countries such as China....
The real important points here are 1 and 3, I think, while point 2 is a bit of a red herring. What is striking about the government response to the food crisis is how little of it there has been on balance, rather than how much. And Doha collapsed not because governments suddenly became enamored of protection, but because there was too little on the table for big countries like India and China for them to compromise on their offers.
But then Zanny follows up with the following, which reads almost like a parody of The Economist:
The big question is what lessons the emerging students—and the disgraced teacher—should learn from recent events. How far should the balance between governments and markets shift? ... Provocative as it may sound in today’s febrile and dangerous climate, freer and more flexible markets will still do more for the world economy than the heavy hand of government.
OK, I grant that "freer and more flexible" is better than "heavy handed" but that would be true regardless of what follows after these qualifiers. This isn't analysis; it's ideology.