One of the main messages Republican presidential hopeful Mitt Romney reinforced by choosing Paul Ryan as his running mate is his belief that the interests of government and private industry are nearly always at odds—and that the further apart these two entities remain from one another, the better off everyone will be.

For many people, the separation of business and government is an ideal as fundamentally American as the separation of church and state is for others.

But is it practical?

Capitalism isn’t what it used to be. As new markets open up around the world, new versions of capitalism are being formed. Most emerging nations have embraced a system of managed capitalism, in which government and business work in close partnership toward a single shared goal. These systems are working very well.

In his new book Strategic Capitalism, Tuck School of Business professor Richard A. D’Aveni argues that “[w]ith the rise of the new economic powerhouses, especially China, we are witnessing a new form of capitalism in which states compete against other states—or, more accurately, in which the various states’ forms of capitalism compete with one another for economic success.”

D’Aveni makes an interesting point. Are the systems of capitalism created by China and other emerging nations the new “disruptive innovations”? If so, does it make sense to embrace managed capitalism in order to compete more effectively? Or is it wiser to maintain—and even increase—the government/private industry split?

The U.S. and other Western nations are at a crossroads. The approach they decide upon will have much to do with the global power structure of the future. But one thing is certain—drastic change is necessary; deciding not to decide isn’t an option.