According to the contemporary economic approaches, the fruits of capitalism can only be reaped with a good level of economic freedom (Comaroff & Comaroff 2001). The well built western economies have adequately applied this principle, shown through their macroeconomic policies. However, the case is doubtful for Asian and particularly Southeast Asian economies. Milton hinted about the dangers of compressed capitalism some years ago; and Studwell proves the point of 'godfather capitalism' in his book The Asian Godfathers. This paper answers two questions related to the subject:
The Asian Godfathers have gotten rich and protected their wealth over time. In what ways are their methods similar to the way Americans and others who live in free market countries like the United States get rich and protect their wealth. In what ways are their methods different?
To what extent have the Asian Godfathers succeeded in creating wealth? To what extent have they succeeded in expropriating that wealth? To what extent have they succeeded in maintaining repressive dictatorial political regimes? 3.Are there signs that Milton Friedman will ultimately be proven correct?
Joe Studwell, in his book The Asian Godfather's, originally used this term to describe the economic systems of Hong Kong, Singapore, Malaysia. Thailand, Indonesia, and the Philippines, but you can see similar systems across the emerging markets today. Because we are not primarily concerned with the real macro nature of politico-economic systems, but instead with how to do direct investments within them, the defining characteristic of such smaller systems for us is companies and who you do deals with. These smaller, god father-type economies have also shown fairly dramatic improvements in their domestic investment and management capabilities in recent years (Studwell 2007). It is getting easier and easier to operate as a foreign investor in places such as Qatar. The events in Dubai, Abu Dhabi, Macau, and other locations that have caught the world's attention—the democratic rise of Macau's gaming market, the creation of Middle Eastern mega real estate industry, and the rise of sovereign wealth funds - have a lot to do with the increasing combination of godfather capitalism and professional management. Anyone interested in doing business or understanding the system of crony capitalism practiced throughout Asia and specifically in South Asia must draw from the ideas in The Asian Godfathers. It answers the long ending questions like: How does Thailand's ruling class get and stay rich? What is the source of their power and how do they protect it? Generation after generation how do a handful of powerful families maintain their economic and political power from smarter, more industrious and more talented lower class Thais who would normally become rich and powerful in their own right in more traditional capitalist economies like the USA. How do a handful of powerful Thai families but protect themselves from better run, better capitalized, more efficient foreign competitors who would most likely drive them out of business if allowed to compete on a level playing field?
Joe Studwell provides some alarming examples of the economic ...