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Friday, April 19, 2013

The Danger of State Capitalism

In an earlier post we discussed nationalisation, it is worth going into such an economy where the state is the main owner.

Socialists envisage a society in which there will be no classes and no state. Many on the Left, including Lenin, have regarded state capitalism as a stage on the way to socialism. They view it as a necessary transitional stage. But history has the grave dangers of state capitalism.

State capitalism concentrates an overwhelming power in the hands of the State, and places workers completely at the mercy of the State. The State is not in the hands of the working-class but an all-mighty bureaucracy.

Under private capitalism in a democratic State the government has no substantial direct income. It raises revenue and makes expenditure by the authorisation of Parliament. This gives to Parliament a degree of control over the executive.

Under state capitalism, the government derives its income automatically from the economic enterprises of the State. It thus has a tendency to free itself from parliamentary control, to become the master of Parliament and to turn the MPs into obedient civil servants.
The State, as the owner of banking industry, agriculture and transport etc becomes the universal employer, the universal landlord. It controls everything on which the fate and happiness of the individual citizen depend.

The worker is dependent upon and at the mercy of the State as regards his or her employment, housing, food, education, transport and leisure facilities. This enormous power of the State over the individual strengthens tendencies towards a dictatorship. The right to organise in trade unions and to strike under State capitalism is even more essential than under private capitalism.

State capitalism does not solve any of the outstanding problems. It does not abolish crises, the classes, the wage system. Under state capitalism there is production of commodities for sale, not production for use. There still remains the rationing of prices and the limits on the purchasing power of wages.

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