Statism is a term to describe an economic system where a government implements a significant degree of centralized economic planning or intervention, as opposed to a system where the overwhelming majority of economic planning occurs at a decentralized level by private individuals in a relatively free market. The term "statism" can refer to various dissimilar ideologies that share the commonality of having centralized economic planning conducted by the state. Statist economies are also referred to as command economies.

The term "statism" is frequently used by advocates of economic liberalism to describe any social or political system that implements, what they believe to be, an unreasonable degree of centralized economic planning by government. At the extreme, some of them believe that any such planning is unreasonable. In this context, "statist" may describe any government that does not embrace the ideal of laissez-faire capitalism. According to libertarians, statism is the antithesis of capitalism.

Socialism and communism are often broadly classified under "statism", however, there are a few types of socialism and communism that are stateless and therefore would not be rightfully included in the category. For example:

• there are several branches of socialism which reject the state;
• for many communists, especially Trotskyists, the state is only a necessary evil that must wither away or be eventually eliminated in order to establish a communist society. Indeed, this is part of Marx's original conception of a communist future; as he saw the state as an instrument of oppression of the masses, the takeover of the masses would eventually render that instrument irrelevant.

A "statist" is one who favors statism.

Support and Criticisms of Statism

The term "statism" is often used polemically and provocatively, by opponents of state intervention, to argue that the legitimate powers of individuals have been illegitimately absorbed by the state. These opponents of statism argue that restricting individual freedom is intrinsically immoral. However, others reject statism in favor of lassiez-faire economic policy simply because they believe decentralized economic planning by individuals in a free market produces superior economic results. Supporters of statism will argue that centralized economic planning, rather than a free market, produces greater economic benefits for everyone.

Discussion on the Morality of Statism

Some modern political philosophies hold that individual rights are in no way natural or absolute, but that they are social constructs; in other words, rights and freedoms are not assigned by nature or some other higher authority, but by human society itself. For example, we have the right to life not because there is anything natural about it (after all, nature does not condemn murder), but because the majority of the human population has agreed that it is in their common interest to respect this right. Therefore, individual rights cannot be separated from the public good, since the public good is the reason why individual rights exist in the first place. Some statists would say, therefore, that if one accepts that a state is necessary to protect individual rights, then one also accepts that a state is necessary to carry out other actions for the public good. This is the foundation of the majority of "statist" philosophies. Detractors of this position would say that given that allowing state action to protect individual freedom may be prudent, it does not follow that that a state is morally justified in overriding individual economic decisions, and that if it does so, it is actually violating individual freedom.

Compare

• Command economy
• Mixed economy
• Totalitarianism

Constrast

• Capitalism
• Free market
• Laissez-faire
• Anarchism

Reading material

Nejatullah Siddiqi (1968), The Ideal of Statism. Islamic Public Economics.