State Capitalism

STATE CAPITALISM

The term state capitalism was coined by political economists to describe market economies heavily regulated or controlled by the state, on behalf of property owners. Unlike stateless capitalism, where markets function without governmental assistance, commonly called "free enterprise," political authorities play a powerful role in state capitalist systems. The government is the agent of property holders, and functions as the executive committee of the capitalist class, even though it usually claims to rule in the interests of all the people. Social democratic regimes such as those of France and Germany, and big-government systems such as the United States that rely on Keynesian and other macromanagement methods, are often classified as state capitalist. Post-Soviet Russia, which describes itself as a mixed social economy, combining state and private ownership of the means of production with an autocratic state, can also be listed under this heading.

Even states dominated by administration and planning, with restricted markets such as the Soviet Union during the era of the New Economic Policy (NEP) 1921–1929, have been accused of being state capitalist by alleging that self-serving bureaucrats, or capitalist roaders had subverted and co-opted the state. Post-Maoist China provides a good example of how a socialist society governed by a Communist Party can serve the interests of property holders from the perspective of Marxist-Leninism.

These distinctions are devoid of any rigorous economic content. They may serve some useful purpose for ideologues, but the classification reveals nothing about the productive potential, economic efficiency, or welfare characteristics of any particular state capitalist regime, or even whether the system relies primarily on markets or plans. The burden of the term is to place most economies outside the hallowed pale of Marxist socialism. Only North Korea and Cuba appear to be mostly directive regimes, with strong states and a socialist credo, in the twenty-first century.

See also: capitalism; command administrative economy; economic growth, soviet; market socialism

bibliography

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Buick, Adam, and Crump, John. (1986). State Capitalism: The Wages under New Management. Houndmills, UK: Macmillan.

Cliff, Tony. (1974). State Capitalism in Russia. London: Pluto Press.

Coleman, Kenneth M., and Nelson, Daniel N. (1984). State Capitalism, State Socialism and the Politicization of Workers. Pittsburgh: Russian and East European Studies Program, University of Pittsburgh.

Crosser, Paul K. (1960). State Capitalism in the Economy of the United States. New York: Bookman Associates.

Dunayevskaya, Raya. (1992). The Marxist-Humanist Theory of State-Capitalism: Selected Writings. Chicago: News and Letters.

Gallik, Dmitri; Kostinsky, Barry; and Treml, Vladimir. (1983). Input-Output Structure of the Soviet Economy. Washington DC: U.S. Dept. of Commerce, Bureau of the Census.

James, Cyril Lionel Robert. (1969). State Capitalism and World Revolution. Detroit: Facing Reality.

Raiklin, Ernest. (1989). After Gorbachev: A Mechanism for the Transformation of Totalitarian State Capitalism Into Authoritarian Mixed Capitalism. Washington, DC: Council for Social and Economic Studies.

Steven Rosefielde