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The State is No Saviour

The state as Engels described it, is “the ideal personification of the total national capital.” (Socialism: Utopian and Scientific) and he recognised “The more productive forces it (the state) takes ever into its possession, the more it becomes a real aggregate capitalist, the more citizens it exploits. The workers remain wage-workers, proletarians. The capitalist relationship is not abolished, rather it is pushed to the limit. (Engels, Socialism: Utopian and Scientific)

 The nature of capitalism is distorted by those who draw their model of capitalism from its early competitive stage and describe its essence as the competition among individual capitals within a nation-state. Marx himself did not confine his analysis to a description of the stage of competitive capitalism, but grasped the basic laws of development leading to greater concentration and centralization of capital. Even in speaking of stock companies, he refers to this form of ownership as being “social capital” which rep…

State-owned Exploitation

Following on from the previous blog-post on co-operatives, the other panacea often presented is state-capitalism, sometimes described by the oxymoron term state-socialism.

Public ownership by the State is not socialism – it is only State capitalism. What many on the Left will do is add a caveat - that nationalisation with workers control is socialism. That too is erroneous. It still means state capitalism. Socialism is not state ownership or management of industry, but the opposite. Socialism abolishes the state.Industry is not transformed into the state, but industry is transformed into common ownership,  functioning industrially and socially through new administrative associations  of the producers, and not through the state. Socialists reject the idea that State capitalism is a phase of socialism. State capitalism can never become socialism  precisely because there exists  a state. A bait is offered to the workers of a “democratized” State capitalism by “democratizing” the governm…

State ownership or common ownership

The term “State capitalism” (sometimes misleadingly designated as State Socialism) is an economic form in which the state performs the role of the capitalist employer, for instance the Post Office(at least for the moment). Under State ownership or State control of industry, the exploitation of wage workers continues. Surplus-values are appropriated by the capitalist class just the same. The government now functions as the exploiting agent of the capitalists who receive their incomes in the form of interest on government bonds or on loans to the government. Although the exploitation may be less direct, the profits go to the capitalists as formerly. The workers are not any better off. That is what Engels meant when he said, “State ownership does not do away with the capitalistic nature of the productive forces.” Millions of employees are now in the State sector and the capitalist class are just as rich while the working class are just as insecure and just as poor, as before. But state …

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 tende…

What Is Socialism? It is not nationalisation

“It was our lifelong dream coming true. It was a utopia. We were for it 100 per cent. What celebrations there were! The industry which had broken generations of miners was ours at last.”

On the 1st January 1947 miners took an unofficial holiday. The red flag was hoisted over the pits and the miners social clubs rang to choruses of the workers’ anthems of the Red Flag and the Internationale. The euphoria did not last.

Nationalisation (or in some cases municipalisation), is sometimes called “state socialism”, but more accurately it amounts to a form of state capitalism. The Post Office, would serve as an example of a “socialist” public service or the National Health Service. Or the BBC. But in the past we have had coal mines, the railways, the electricity and gas networks and tele-communications all owned by the state. Nationalisation has been wrongly equated with socialism. State ownership does not mean socialism. Nationalisation is a complete distortion of the idea of common ownership…

Chinese Capitalism

"As a party member, I will work hard and teach other people how to get rich together and let more people benefit by getting rich," Wang Dongxin, the general manager of Jiangxi Luhuan Animal Husbandry, a pig-breeding company,  said to hundreds of Communist Party members in Beijing's Great Hall of the People.

Chinese president Hu Jintao said China was still in the "primary stage of socialism" and still needed to pursue "socialist modernisation" as its main task, aiming to double the 2010 per-capita income of both urban and rural residents by 2020. Hu has previously said China's modernisation drive under one-party rule would take "several, a dozen or even dozens of generations". [a generation is generally defined as about 30 years so it will be a long transition!- Socialist Courier]

The New York Times reported last month that the extended family of Premier Wen Jiabao had amassed assets worth $2.7 billion.

Hu Jia, a leading rights activist, sai…

The Red Capitalists

For much of the last decade, while Bo Xilai, Communist Party chief in the city of Chongqing, a large metropolis with province status, and a member of the Politburo, was busy moving up the ranks of the Communist Party, and even striking populist themes aimed at improving the lot of the poor, his relatives were quietly amassing a fortune estimated at more than $160 million. His elder brother accumulated millions of dollars’ worth of shares in one of the country’s biggest state-owned conglomerates. His sister-in-law owns a significant stake in a printing company she started that was recently valued at $400 million. And even Mr. Bo’s 24-year-old son, now studying at Harvard, got into business in 2010, registering a technology company with $320,000 in start-up capital.

Just a few weeks before his fall from power, Bo Xilai wrote an inscription in calligraphy, praising the Chongqing Water Assets Management Company, and urging support for its operations. What he did not say was that a foundat…