, who argued that state ownership does not do away with capitalism by itself In
Socialism: Utopian and Scientific (1880),
Friedrich Engels described
state ownership, i.e. state capitalism, as follows: If the crisis revealed the incapacity of the bourgeoisie any longer to control the modern productive forces, the conversion of the great organizations for production and communication into joint-stock companies and state property shows that for this purpose the bourgeoisie can be dispensed with. All the social functions of the capitalists are now carried out by salaried employees. The capitalist has no longer any social activity save the pocketing of revenues, the clipping of coupons, and gambling on the stock exchange, where the different capitalists fleece each other of their capital. Just as at first the capitalist mode of production displaced the workers, so now it displaces the capitalists, relegating them to the superfluous population even if not in the first instance to the industrial reserve army. It has been suggested that the concept of state capitalism can be traced back to
Mikhail Bakunin's critique during the
First International of the potential for state exploitation under Marxist-inspired socialism, or to
Jan Wacław Machajski's argument in
The Intellectual Worker (1905) that socialism was a movement of the
intelligentsia as a class, resulting in a new type of society he termed
state capitalism. For anarchists,
state socialism is equivalent to state capitalism, hence oppressive and merely a shift from private capitalists to the state being the sole employer and capitalist. In
Imperialism, the Highest Stage of Capitalism and
Imperialism and World Economy, both
Vladimir Lenin and
Nikolai Bukharin, respectively, had similarly identified the growth of state capitalism as one of the main features of capitalism in its imperialist epoch. In
The State and Revolution, Lenin wrote that "the erroneous bourgeois reformist assertion that monopoly capitalism or state-monopoly capitalism is no longer capitalism, but can now be called "state socialism" and so on, is very common". During
World War I, using Lenin's idea that
tsarism was taking a Prussian path to capitalism, the
Bolshevik Nikolai Bukharin identified a new stage in the development of capitalism in which all sectors of national production and all important social institutions had become managed by the state—he termed this new stage
state capitalism. After the
October Revolution, Lenin used the term
state capitalism positively. 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, making the following point: Reality tells us that state capitalism would be a step forward. If in a small space of time we could achieve state capitalism, that would be a victory. Lenin argued the state should temporarily run the economy which would eventually be taken over by workers. To Lenin,
state capitalism did not mean the state would run most of the economy, but that state capitalism would be one of five elements of the economy: The Russian anarchists' claim would become standard in anarchist works. 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. When speaking about
Marxism,
Murray Bookchin said the following: Marxism, in fact, becomes ideology. It is assimilated by the most advanced forms of state capitalist movement — notably Russia. By an incredible irony of history, Marxian 'socialism' turns out to be in large part the very state capitalism that Marx failed to anticipate in the dialectic of capitalism. 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'. This is an extraordinary statement if one thinks out its implications, and a mouthful of contradictions. While speaking about
Leninism, the authors of
An Anarchist FAQ say: Rather than present an effective and efficient means of achieving revolution, the Leninist model is elitist, hierarchical and highly inefficient in achieving a socialist society. 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. At worst, these parties can seize power and create a new form of class society (a state capitalist one) in which the working class is oppressed by new bosses (namely, the party hierarchy and its appointees).
Classical and orthodox Marxists Immediately after the Russian Revolution, many Western Marxists questioned whether socialism was possible in Russia. Specifically,
Karl Kautsky said: After 1929, exiled
Mensheviks such as
Fyodor Dan began to argue that Stalin's Russia constituted a state capitalist society. In the United Kingdom, the orthodox Marxist group the
Socialist Party of Great Britain independently developed a similar doctrine. Although initially beginning with the idea that Soviet capitalism differed little from western capitalism, they later began to argue that the bureaucracy held its productive property in common, much like the
Catholic Church's. As John O'Neill notes: Writing in the Menshevik journal
Socialist Courier on 25 April 25,
Rudolf Hilferding rejected the concept of state capitalism, noting that as practiced in the Soviet Union it lacked the dynamic aspects of capitalism such as a market which set prices or a set of entrepreneurs and investors which allocated capital. According to Hilferding, state capitalism was not a form of capitalism, but rather a form of
totalitarianism.
Communist left and council communists Another early analysis of the Soviet Union as state capitalist came from various groups advocating
left communism. One major tendency of the
1918 Russian communist left criticised the re-employment of
authoritarian capitalist relations and methods of production. As
Valerian Osinsky in particular argued, "one-man management" (rather than the democratic factory committees workers had established and Lenin abolished) and the other impositions of capitalist discipline would stifle the active participation of workers in the organisation of production.
Taylorism converted workers into the appendages of machines and
piece work imposed individualist rather than collective rewards in production so instilling
petty bourgeois values into workers. In sum, these measures were seen as the re-transformation of proletarians within production from collective subject back into the atomised objects of capital. The working class, it was argued, had to participate consciously in economic as well as political administration. In 1918, this tendency within the left communists emphasized that the problem with capitalist production was that it treated workers as objects. Its
transcendence lay in the workers' conscious creativity and participation, which is reminiscent of
Marx's critique of alienation. 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). Many members of the
Workers' Opposition and the
Decists (both later banned) and two new underground left communist groups,
Gavril Myasnikov's Workers' Group and the Workers' Truth group, developed the idea that Russia was becoming a state capitalist society governed by a new bureaucratic class. The most developed version of this idea was in a 1931 booklet by Myasnikov. The left and
council communist traditions outside Russia consider the Soviet system as state capitalist, although some left communists such as
Amadeo Bordiga also referred to it as simply
capitalism or
capitalist mode of production.
Otto Rühle, a major German left communist, developed this idea from the 1920s and it was later articulated by Dutch council communist
Anton Pannekoek in "State Capitalism and Dictatorship" (1936).
Trotskyists Leon Trotsky stated that the term
state capitalism "originally arose to designate the phenomena which arise when a bourgeois state takes direct charge of the means of transport or of industrial enterprises" and is therefore a "partial negation" of capitalism. However, Trotsky rejected that description of the
Soviet Union, claiming instead that it was a
degenerated workers' state. After
World War II,
most Trotskyists accepted an analysis of the Soviet bloc countries as being
deformed workers' states. However, alternative opinions within the Trotskyist tradition have developed the theory of state capitalism as a
new class theory to explain what they regard as the essentially non-socialist nature of the Soviet Union,
Cuba,
China and other self-proclaimed
socialist states. The discussion goes back to internal debates in the
Left Opposition during the late 1920s and early 1930s.
Ante Ciliga, a member of the Left Opposition imprisoned at Verkhne-Uralsk in the 1930s, described the evolution of many within the Left Opposition to a theory of state capitalism influenced by
Gavril Myasnikov's Workers Group and other left communist factions. 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". Their political evolution would lead them away from Trotskyism. Another is that of
Tony Cliff, associated with the
International Socialist Tendency and the British
Socialist Workers Party (SWP), dating back to the late 1940s. Unlike Johnson–Forest, Cliff formulated a theory of state capitalism that would enable his group to remain Trotskyists, albeit heterodox ones. A relatively recent text by
Stephen Resnick and
Richard D. Wolff, titled
Class Theory and History, explores what they term
state capitalism in the former Soviet Union, continuing a theme that has been debated within Trotskyist theory for most of the past century. Other terms used by critical left-wing theorists in discussing Soviet-style societies include
bureaucratic collectivism,
deformed workers' states,
degenerated workers' states and the "
new class".
Maoists and anti-revisionist Marxist–Leninists 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. It provided as follows: "Whenever necessary and possible, private capital shall be encouraged to develop in the direction of state capitalism". From 1956 to the late 1970s, the
Chinese Communist Party (CCP) and their
Maoist or
anti-revisionist adherents around the world often described the Soviet Union as state capitalist, essentially using the accepted Marxist definition, albeit on a different basis and in reference to a different span of time from either the Trotskyists or the left-communists. Specifically, the Maoists and their descendants use the term state capitalism as part of their description of the style and politics of
Nikita Khrushchev and his successors as well as to similar leaders and policies in other self-styled "socialist" states. This was involved in the ideological
Sino–Soviet split. After
Mao Zedong's death, amidst the supporters of the
Cultural Revolution and the
Gang of Four, most extended the state capitalist formulation to China itself and ceased to support the CCP which likewise distanced itself from these former
fraternal groups. 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. Most current communist groups descended from the Maoist ideological tradition still adopt the description of both China and the Soviet Union as being state capitalist from a certain point in their history onwards—most commonly, the Soviet Union from 1956 to its collapse in 1991 and China from 1976 to the present. Maoists and anti-revisionists also sometimes use the term
social imperialism to describe socialist states that they consider to be actually capitalist in essence—their phrase, "socialist in words, imperialist in deeds" denotes this.
By liberal economists , who advanced a
right-libertarian analysis of state capitalism
Murray Rothbard, an
anarcho-capitalist philosopher, used the term
state capitalism interchangeably with the term
state monopoly capitalism and used it to describe a partnership of government and big business in which the state intervenes on behalf of large capitalists against the interests of consumers. , who described state capitalism as a form of
state socialism Rothbard distinguished it from
laissez-faire capitalism, where big business is not protected from market forces. This usage dates from the 1960s, when
Harry Elmer Barnes described the post-New Deal economy of the United States as "state capitalism". More recently,
Andrei Illarionov, former economic adviser to Russian President
Vladimir Putin, resigned in December 2005, protesting Russia's "embracement of state capitalism". The term
state capitalism is not used by
classical liberals to describe the public ownership of the means of production. 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. The most recent slogan is "State Capitalism." It is not commonly realized that this covers nothing more than what used to be called Planned Economy and State Socialism, and that State Capitalism, Planned Economy, and State Socialism diverge only in non-essentials from the "classic" ideal of egalitarian Socialism.
By Italian Fascists , who claimed that the modern phase of capitalism is state socialism "turned on its head" On economic issues,
Italian Fascist leader
Benito Mussolini claimed in 1933 that were
Fascism to follow the modern phase of capitalism, its path would "lead inexorably into state capitalism, which is nothing more nor less than
state socialism turned on its head. In either event, [whether the outcome be state capitalism or state socialism] the result is the bureaucratization of the economic activities of the nation". Mussolini claimed that capitalism had degenerated in three stages, starting with dynamic or
heroic capitalism (1830–1870), followed by static capitalism (1870–1914) and then reaching its final form of decadent capitalism, also known as
supercapitalism beginning in 1914. Mussolini denounced supercapitalism for causing the "standardization of humankind" and for causing excessive consumption. 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. It is then that state intervention begins and becomes more necessary. It is then that those who once ignored the state now seek it out anxiously". Due to the inability of businesses to operate properly when facing economic difficulties, Mussolini claimed that this proved that state intervention into the economy was necessary to stabilize the economy.
Private enterprise would control production, but it would be supervised by the state. Italian Fascism presented the economic system of
corporatism as the solution that would preserve private enterprise and property while allowing the state to intervene in the economy when private enterprise failed. == In Western countries and European studies ==