State capitalism
[1] A state-capitalist country is one where the government controls the economy and essentially acts as a single huge corporation, extracting surplus value from the workforce in order to invest it in further production.
[11] Other examples include Singapore under Lee Kuan Yew[12][13][14][15] and Turkey,[16] as well as military dictatorships during the Cold War and fascist regimes such as Nazi Germany.
In spring 1918, during a brief period of economic liberalism prior to the introduction of war communism and again during the New Economic Policy (NEP) of 1921, Lenin justified the introduction of state capitalism controlled politically by the dictatorship of the proletariat to further central control and develop the productive forces,[40] making the following point:[41] Reality tells us that state capitalism would be a step forward.
If in approximately six months' time state capitalism became established in our Republic, this would be a great success and a sure guarantee that within a year socialism will have gained a permanently firm hold.
[45]As a term and concept, state capitalism has been used by various socialists, including anarchists, Marxists, Leninists, left communists, Marxist–Leninists and Trotskyists.
Of the Soviet Union, the prominent anarchist Emma Goldman wrote an article from 1935 titled "There Is No Communism in Russia" in which she argued: Such a condition of affairs may be called state capitalism, but it would be fantastic to consider it in any sense Communistic [...] Soviet Russia, it must now be obvious, is an absolute despotism politically and the crassest form of state capitalism economically.
The proletariat, instead of developing into a revolutionary class within the womb of capitalism, turns out to be an organ within the body of bourgeois society [...] Lenin sensed this and described 'socialism' as 'nothing but state capitalist monopoly made to benefit the whole people'.
At best, these parties play a harmful role in the class struggle by alienating activists and militants with their organisational principles and manipulative tactics within popular structures and groups.
[50]After 1929, exiled Mensheviks such as Fyodor Dan began to argue that Stalin's Russia constituted a state capitalist society.
[51] In the United Kingdom, the orthodox Marxist group the Socialist Party of Great Britain independently developed a similar doctrine.
One major tendency of the 1918 Russian communist left criticised the re-employment of authoritarian capitalist relations and methods of production.
[56] This type of criticism was revived on the left of the Russian Communist Party after the 10th Congress in 1921, which introduced the New Economic Policy (NEP).
After World War II, most Trotskyists accepted an analysis of the Soviet bloc countries as being deformed workers' states.
[30][65][66] Following his release and his return to activity in the International Left Opposition, Ciliga "was one of the first, after 1936, to raise the theory [of state capitalism] in Trotskyist circles".
Unlike Johnson-Forest, Cliff formulated a theory of state capitalism that would enable his group to remain Trotskyists, albeit heterodox ones.
In the common program set up by the Chinese People's Political Consultative Conference in 1949, in effect the country's interim constitution, state capitalism meant an economic system of corporatism.
The related theory of Hoxhaism was developed in 1978, largely by Socialist Albanian President Enver Hoxha, who insisted that Mao himself had pursued state capitalist and revisionist economic policies.
More recently, Andrei Illarionov, former economic adviser to Russian President Vladimir Putin, resigned in December 2005, protesting Russia's "embracement of state capitalism".
The explanation why was given by the Austrian School economist Ludwig von Mises, who argued: The socialist movement takes great pains to circulate frequently new labels for its ideally constructed state.
Each worn-out label is replaced by another which raises hopes of an ultimate solution of the insoluble basic problem of Socialism — until it becomes obvious that nothing has been changed but the name.
[81] Mussolini claimed that at this stage of supercapitalism "[it] is then that a capitalist enterprise, when difficulties arise, throws itself like a dead weight into the state's arms.
An example of this would be the military–industrial complex in which autonomous entrepreneurial firms produce for lucrative government contracts and are not subject to the discipline of competitive markets.
There are limits according to arguments that state capitalism exists to ensure that wealth creation does not threaten the ruling elite's political power which remains unthreatened by tight connections between the government and the industries while state capitalist fears of capitalism's creative destruction, the threat of revolution and any significant changes in the system result in the persistence of industries that have outlived their economic usefulness and an inefficient economic environment that is ill-equipped to inspire innovation.
The author cites France and to a lesser extent Italy as the prime examples of modern European state capitalism.
The term refers to an environment where the state intervenes in the economy to protect large monopolistic or oligopolistic businesses from competition by smaller firms.
[9] The main principle of the ideology is that big business, having achieved a monopoly or cartel position in most markets of importance, fuses with the government apparatus.
A kind of financial oligarchy or conglomerate therefore results, whereby government officials aim to provide the social and legal framework within which giant corporations can operate most effectively.
[88] When Eugen Varga introduced the theory, orthodox Stalinist economists attacked it as incompatible with the doctrine that state planning was a feature only of socialism and that "under capitalism anarchy of production reigns".
"[93] In the common program set up by the Chinese People's Political Consultative Conference in 1949, in effect the country's interim constitution, state capitalism meant an economic system of corporatism.
[citation needed] Some Taiwanese economists referred to Taiwan's economic model during the Kuomintang dictatorship period as party-state capitalism.
