State capitalism is a term used to refer to a capitalist economy that is administered under state control. The term was initially often used to describe the controlled economies of the great powers in the First World War,^[1], but has today evolved to also be employed also by some heterodox economists to describe a society wherein the productive forces or means of production are owned and run by a state in an essentially capitalist manner, even if that state chooses to describe itself as socialist. In economics, a capitalist is someone who owns capital, presumably within the economic system of capitalism. ... A state is a set of institutions that possesses the exclusive legitimate authority to make the rules that govern the people in one or more societies, having internal and external sovereignty over a definite territory. ... {{Infobox Military Conflict |conflict = World War I |partof = |image = |caption = Clockwise from top: Trenches on the Western Front; a British Mark IV tank crossing a trench; Royal Navy battleship HMS Irresistible sinking after striking a mine at the Battle of the Dardanelles; a Vickers machine gun crew with gas masks... Heterodox economics refers to schools of economic thought which do not conform to the mainstream paradigm of neoclassical economics. ... For the specific theoretical justifications behind the Great Leap Forward and the Five Year Plans, see Theory of Productive Forces. ... Means of production (abbreviated MoP; German: Produktionsmittel), also called means of labour are the materials, tools and other instruments used by workers to make products. ... A state is a set of institutions that possesses the exclusive legitimate authority to make the rules that govern the people in one or more societies, having internal and external sovereignty over a definite territory. ... Socialist state is the term used in official documents of some countries to describe their political system. ...

Liebknecht - "combatted [...] state capitalism"

Within Marxist literature, state capitalism is usually defined in the latter sense: as a social system combining capitalism — the wage system of producing and appropriating surplus value — with ownership by a state apparatus. By that definition, a state capitalist country is a country where the government controls the economy and essentially acts like a single giant corporation. Wilhelm Liebknecht. ... Wilhelm Liebknecht. ... Marxism is the political practice and social theory based on the works of Karl Marx, a 19th century philosopher, economist, journalist, and revolutionary, along with Friedrich Engels. ... A wage is a compensation which workers receive in exchange for their labor. ... Surplus value, according to Marxism, is unpaid labour that is extracted from the worker by the capitalist, and serves as the basis for capitalist accumulation. ... A corporation is a legal person which, while being composed of natural persons, exists completely separately from them. ...

The term itself was in use within the socialist movement from the late nineteenth century onwards. Wilhelm Liebknecht in 1896 said: "Nobody has combatted State Socialism more than we German Socialists; nobody has shown more distinctively than I, that State Socialism is really State capitalism!" ^[2] Socialism is a social and economic system (or the political philosophy advocating such a system) in which the economic means of production are owned and controlled collectively by the people. ... Wilhelm Liebknecht Wilhelm Liebknecht (March 29, 1826 - August 7, 1900) was a German social democrat, one of the founders of the SPD and father of Karl Liebknecht and Theodor Liebknecht. ... 1896 (MDCCCXCVI) was a leap year starting on Wednesday (see link for calendar). ...

There are various theories and critiques of state capitalism, some of which have been around since the October Revolution. The common themes among them are to identify that the workers do not meaningfully control the means of production and that commodity relations and production for profit still occur within state capitalism. This article does not cite its references or sources. ...

Use by Classical Liberals and advocates of capitalism

Murray Rothbard put forward a laissez Faire definition of state capitalism

The term is used by capitalists in a different way from leftists or Marxists. Capitalist usage is meant to differentiate between libertarian capitalism and a state-run market economy. Murray Rothbard, a laissez-faire capitalist thinker, uses “state capitalism” to refer to the coercive role of the state in modifying market behaviour. This usage dates from the 1960s, when Harry Elmer Barnes described the post-New Deal economy in the United States as "state capitalism." More recently, Andrei Illarionov, former economic advisor to Russian President Vladimir Putin, resigned in December 2005, protesting Russia's "embracement of state capitalism." Image File history File links Murray_Rothbard. ... Image File history File links Murray_Rothbard. ... In politics, left-wing, political left, leftism, or simply the left, are terms which refer (with no particular precision) to the segment of the political spectrum typically associated with any of several strains of socialism, social democracy, or liberalism (especially in the American sense of the word), or with opposition... This article deals with the libertarianism as defined in America and several other nations. ... It has been suggested that Free market be merged into this article or section. ... Murray Newton Rothbard (March 2, 1926 – January 7, 1995) was a highly influential American economist, historian and natural law theorist belonging to the Austrian School of Economics who helped define modern libertarianism and anarcho-capitalism. ... Laissez-faire is short for laissez faire, laissez passer, a French phrase meaning to let things alone, let them pass. First used by the eighteenth century Physiocrats as an injunction against government interference with trade, it is now used as a synonym for strict free market economics. ... Harry Elmer Barnes (June 15, 1889 - August 25, 1968) was a leading American historian in the 20th century. ... Abraham Lincoln, 16th President of the United States (1861-1865) The majority of this article is about heads of states. ... Vladimir Vladimirovich Putin (Russian: ) (born October 7, 1952) is the incumbent President of Russia. ...

The term is not used by the classical liberals to describe the public ownership of the means of production. The economist Ludwig von Mises explains the reason: "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."^[3] Ludwig Heinrich Edler von Mises (September 29, 1881 – October 10, 1973) was a notable economist and a major influence on the modern libertarian movement. ...

Use by Trotskyists

Tony Cliff: propounded a theory of state capitalism in the Soviet Union

The theory of State Capitalism does not play a prominent part with in the traditional Trotskyist position. Trotsky rejected the idea that the USSR was communist, claiming instead that it was a Degenerated workers' state. However, alternative currents within the Trotskyist tradition have developed the theory of State capitalism as an explanation of what they regard as the essentially non-socialist nature of the USSR, Cuba, China, and other self-proclaimed socialist states. This picture is in the public domain. ... This picture is in the public domain. ... Trotskyism is the theory of Marxism as advocated by Leon Trotsky. ... 1915 passport photo of Trotsky Leon Davidovich Trotsky (Russian: Лев Давидович Троцкий; also transliterated Trotskii, Trotski, Trotzky) (October 26 (O.S.) = November 7 (N.S.), 1879 - August 21, 1940), born Lev Davidovich Bronstein (&#1051... In Trotskyist political theory the term degenerated workers state has been used since the 1930s to describe the state of the Soviet Union after Stalins consolidation of power in or about 1924. ... The term socialist state (or socialist republic, or workers state) can carry one of several different (but related) meanings: Strictly speaking, any real or hypothetical state organized along the principles of socialism may be called a socialist state. ...

A relatively recent text by Stephen A. Resnick and Richard D. Wolff, Class Theory and History, explores what they call state capitalism in the former Soviet Union, continuing a theme that has been debated within Trotskyist theory for most of the past century. One influential formulation advocating the theory of state capitalism has been that of Tony Cliff, associated with the International Socialist Tendency and the British Socialist Workers Party (SWP), although the discussion goes back to internal debates in the Left Opposition in the late 1920s. The distinctiveness of the trotskyist use of the term 'state capitalism' is that it concludes that the Russian Revolution was tremendously progressive, and that the stalinist bureaucracy restored capitalism; that is, it assumes that the establishment of state capitalism was in no means inevitable. Tony Cliff (May 20, 1917 – May 9, 2000) was a Trotskyist revolutionary activist. ... The International Socialist Tendency is an international grouping of organisations around the ideas of Tony Cliff, founder of the Socialist Workers Party in the UK. It has sections across the world, however its strongest presence is in Europe, especially in the UK, Greece and Ireland. ... The Socialist Workers Party (SWP) is the largest political party of the far left in England[citation needed]. It sees itself as standing in the revolutionary socialist tradition. ... The Left Opposition was a faction within the Communist Party of the Soviet Union during 1923-1927. ... The 1920s was a decade sometimes referred to as the Jazz Age or the Roaring Twenties, usually applied to America. ...

Compare with other left-wing theories regarding Soviet-style societies: deformed workers' states, degenerated workers' states, new class, state socialism, bureaucratic collectivism and coordinatorism. In Trotskyist political theory, deformed workers states are states where the bourgeoisie has been overthrown through social revolution, the industrial means of production have been largely nationalized, but where the working class has never held political power (as it did in Russia shortly after the Russian Revolution). ... In Trotskyist political theory the term degenerated workers state has been used since the 1930s to describe the state of the Soviet Union after Stalins consolidation of power in or about 1924. ... The new class is a term to describe the privileged ruling class of bureaucrats and Communist party functionaries which typically arises in a Stalinist communist state. ... State socialism, broadly speaking, is any variety of socialism which relies on ownership of the means of production by the state. ... Bureaucratic collectivism is a theory of class society. ... Coordinatorism is an economic system in which control is held neither by people who own capital, nor by the workers, but instead is held by an intervening class of coordinators, typically in the roles of managers, administrators, engineers, university intellectuals, doctors, lawyers. ...

Use by Maoists and ‘Anti-Revisionists’

From 1956 to the early 1980s, the Communist Party of China 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 Khrushchev and his successors, as well as to similar leaders and policies in other self-styled ‘socialist’ states. This stemmed largely from the ideological break of the Sino-Soviet Split. The Communist Party of China (CPC) (official name, though almost universally known in English as the Chinese Communist Party (CCP)) (Simplified Chinese: ; Traditional Chinese: ; pinyin: Zhōngguó GòngchÇŽndÇŽng) is the ruling political party of the Peoples Republic of China, a position guaranteed by the countrys... Maoism or Mao Zedong Thought (Chinese: 毛澤東思想, pinyin: Máo Zédōng Sīxiǎng), also called Marxism-Leninism–Mao Zedong Thought or Marxism-Leninism-Maoism (MLM), is a variant of communism derived from the teachings of Mao Zedong (1893&#8211... In the Marxist-Leninist communist movement, an anti-revisionist is one who favors a stricter interpretation of the ideology in accordance with the teachings of Marx, Engels, Lenin, and Stalin. ... Nikita Sergeyevich Khrushchev (Russian: ; English: Nikita Sergeevič Hruŝëv; IPA: ); surname more accurately romanized as Khrushchyov; April 17, 1894 [O.S. April 5]–September 11, 1971) was the leader of the Soviet Union after the death of Joseph Stalin. ... The Sino-Soviet split was a major diplomatic conflict between the Peoples Republic of China (PRC) and the Union of Soviet Socialist Republics (USSR), beginning in the late 1950s, reaching a peak in 1969 and continuing in various ways until the late 1980s. ...

After Mao's death, amidst the supporters of the Cultural Revolution and the exploits of the 'Gang of Four', most extended the state capitalist formulation to China itself, and ceased to support the Communist Party of China, which likewise distanced itself from these former fraternal groups. The Great Proletarian Cultural Revolution (Simplified Chinese: ; Traditional Chinese: ; pinyin: WúchÇŽn JiÄ“jí Wénhuà Dà Gémìng; literally Proletarian Cultural Great Revolution; often abbreviated to 文化大革命 wénhuà dà gémìng, literally Great Cultural Revolution, or even simpler, to 文革 wéngé, Cultural Revolution) in the People... The Gang of Four on trial The Gang of Four (Chinese: 四人帮; pinyin: ) was a group of Communist Party leaders in the Peoples Republic of China who were arrested and removed from their positions in 1976, following the death of Mao Zedong, and were blamed for the... The Communist Party of China (CPC) (official name, though almost universally known in English as the Chinese Communist Party (CCP)) (Simplified Chinese: ; Traditional Chinese: ; pinyin: Zhōngguó GòngchÇŽndÇŽng) is the ruling political party of the Peoples Republic of China, a position guaranteed by the countrys... Fraternal Party: Literally, brother party. Refers to a political party officially affiliated with another, often larger and/or international, political party or governmental party. ...

Most current communist groups descended from the Maoist ideological tradition still hold to 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 day. Maoists and ‘anti-revisionists’ also sometimes employ the term ‘Social-imperialism’ to describe socialist states that they consider to actually be captialist in essence — their phrase, "socialist in words, imperialist in deeds" denotes this. This article is about communism as a form of society and as a political movement. ... 1956 (MCMLVI) was a leap year starting on Sunday of the Gregorian calendar. ... 1991 (MCMXCI) was a common year starting on Tuesday of the Gregorian calendar. ... 1976 (MCMLXXVI) was a leap year starting on Thursday. ... Social-imperialism is imperialism with a socialist/communist face. ...

Use by Left-communists and Council communists

The earliest critique of the USSR as state-capitalist was formulated by various groups adhering to Left-communism. One major tendency of the 1918 communist left criticised the re-employment of authoritarian capitalist relations and methods within production. Left communism should not be confused with the Trotskyist Left Opposition. ... Year 1918 (MCMXVIII) was a common year starting on Tuesday of the Gregorian calendar (see link for calendar) or a common year starting on Wednesday of the Julian calendar. ... The term authoritarian is used to describe an organization or a state which enforces strong and sometimes oppressive measures against the population, generally without attempts at gaining the consent of the population. ...

As Ossinsky in particular argued, one-man management and the other impositions of capitalist discipline would stifle the active participation of workers in the organisation of production; Taylorism turned workers into the appendages of machines, and piece-wages imposed individualist rather than collective rewards in production so installing 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 consciously participate in economic as well as political administration. This tendency within the 1918 Left Communists emphasized that the problem with capitalist production was that it turned workers into objects. Its transcendence lay in the workers' conscious creativity and participation, which is reminiscent of Marx's critique of alienation. Taylorism or Scientific management is the name of the approach to management and Industrial/Organizational Psychology initiated by Frederick Winslow Taylor in his 1911 monograph The Principles of Scientific Management. ... Petit-bourgeois or Anglicised petty bourgeois is a French term that reffered to the members of the lower middle social-classes. ... In philosophy, transcendental/transcendence, has three different but related primary meanings, all of them derived from the words literal meaning (from Latin), of climbing or going beyond: one that originated in Ancient philosophy, one in Medieval philosophy and one in modern philosophy. ... In Marxs early writings, alienation (Entfremdung in German) refers to the separation of things that naturally belong together, or to antagonism between things that are properly in harmony. ...

Modern left communists share with Trotskyists the fundamental definition of state capitalism as a social system combining capitalism with state ownership, but they disagree on some levels. The left communist group Aufheben for example have three primary disagreements with Cliff's theory: For other uses, see Capitalism (disambiguation). ...

• 1) Cliff's attempt to make the point of counter-revolution and the introduction of state capitalism coincide with Stalin's first five year plan (and Trotsky's exile);
• 2) his denial that the law of value operated in the classic sense within the USSR; and
• 3) his insistence that state capitalism was the highest stage of capitalism which implied according to Left communists ( despite Cliff's denial) that the USSR was more advanced than Western capitalism.

State capitalism in Western countries

An alternate definition is that state capitalism is a close relationship between the government and private capitalism, such as one in which the private capitalists produce for a guaranteed market. An example of this would be the military-industrial complex where autonomous entrepreneurial firms produce for government contracts and are not subject to the discipline of competitive markets. Many see this as part of a continuum characterizing the modern world economy with 'normal' capitalism at one extreme and complete state capitalism like that of the former USSR at the other. This continuum has narrowed somewhat since the 1980s with the collapse of the USSR and its satellites and with large-scale privatization in Eastern Europe and most of the third world.^{[citation needed]} President Dwight Eisenhower famously referred to the military-industrial complex in his farewell speech. ... Privatization (alternately denationalization or disinvestment) is the transfer of property or responsibility from the public sector (government) to the private sector (business). ... Regions of Europe as delineated by the United Nations (UN definition of Eastern Europe marked salmon):  Northern Europe  Western Europe  Eastern Europe  Southern Europe Pre-1989 division between the West (grey) and Eastern Bloc (orange) superimposed on current national boundaries: Russia (dark orange), other countries of the former USSR (medium... For the Jamaican reggae band, see Third World (band). ...

Both the first definition (the one used by Trotskyists) and this fourth one flow from discussion among Marxists at the beginning of the twentieth century, most notably Nikolai Bukharin who, in his book Imperialism and the world economy thought that advanced, 'imperialist' countries exhibited the latter definition and considered (and rejected) the possibility that they could arrive at the former. Nikolai Bukharin Nikolai Ivanovich Bukharin (Russian: ), (October 9 [O.S. September 27] 1888 – March 13, 1938) was a Bolshevik revolutionary and intellectual, and later a Soviet politician. ... Imperialism is the policy of extending the control or authority over foreign entities as a means of acquisition and/or maintenance of empires, either through direct territorial or through indirect methods of exerting control on the politics and/or economy of other countries. ...

Notes

See also

• Bureaucratic collectivism
• Coordinatorism
• Corporativism
• Deformed workers' state
• Degenerated workers state
• New class
• State socialism
• Statism

Bureaucratic collectivism is a theory of class society. ... Coordinatorism is an economic system in which control is held neither by people who own capital, nor by the workers, but instead is held by an intervening class of coordinators, typically in the roles of managers, administrators, engineers, university intellectuals, doctors, lawyers. ... The term corporatism has different meanings in different contexts. ... In Trotskyist political theory, deformed workers states are states where the bourgeoisie has been overthrown through social revolution, the industrial means of production have been largely nationalized, but where the working class has never held political power (as it did in Russia shortly after the Russian Revolution). ... In Trotskyist political theory, degenerated workers states are states where capitalism has been overthrown through social revolution and the property forms have changed into a collectivized planned economy, but where the working class has lost its political power and socialist democracy has been replaced by a form of dictatorship. ... The new class is a term to describe the privileged ruling class of bureaucrats and Communist party functionaries which typically arises in a Stalinist communist state. ... State socialism, broadly speaking, is any variety of socialism which relies on ownership of the means of production by the state. ... Statism (or Etatism) is a very loose and often derogatory term that is used to describe: Specific instances of state intervention in personal, social or economic matters. ...

External links

• In Defense of Marxism by Leon Trotsky A collection of essays and letters to members of the US Socialist Workers Party from 1939 to 1940.
• Our Recent Congress, Justice 1896 by Wilhelm Liebknecht
• What was the USSR? by Aufheben
• State Capitalism in Russia by Tony Cliff
• Toward a Theory of State Capitalism: Ultimate Decision-Making and Class Structure Libertarian analysis by Walter E. Grinder and John Hagel.
• Against the Theory of State Capitalism by Ted Grant
• The Russian Question: A debate between Raya Dunayevskaya and Max Shachtman (May 1947 with August 2005 commentary)
• Imperialism and World Economy by Nikolai Bukharin
• State Capitalism and Dictatorship by Anton Pannekoek
• The Theory of “State Capitalism”, Ernest Mandel (June 1951)
• The Marxian Concept of Capital and the Soviet Experience: Essay in the Critique of Political Economy by Paresh Chattopadhyay
• Collection of left-communist links that dismiss the bolshevik state capitalism.
• "The Nature of the Russian Economy" a 1946 Polemic written by Raya Dunayevskaya (then writing as Freddie Forest), founder of Marxist Humanism, arguing for a state capitalist position within the Marxist movement.
• "Trotskyism after Trotsky: The origins of the International Socialists" Summarization of three key points on which Cliff and the International Socialist Tendency deviated from what is traditionally the orthodox Trotskyist position.