The new fund, assuming it is approved by Congress, could pull the United States deeper into a form of capitalism in which the most powerful financial entities are not risk-happy investment banks, but more cautious state-sponsored entities. While not necessarily a third economic way, this general approach presumes that the government -- in addition to the private sector -- plays a crucial role in deciding how best to deploy a nation’s investment capital.

“This gets to the point of state capitalism and defining what the role of the government is in a free-market economy,” said Douglas Rediker, a former investment banker who studies sovereign funds at the New America Foundation in Washington. LINK