Following the Russian Revolution, Vladimir Lenin stated that he believed that the State should take on the functions of the capitalists by planning and directing the economy. Lenin himself called this state ownership of the means of production State Capitalism but he did not mean it in the slanderous sense that the term carries among Marxists today. Today, many Marxists use the term to deride the policies of Stalin and as the beginning point of their criticism of the Soviet Union. I believe that State Capitalism can in fact be a good method for the eventual development of Socialism and then Communism.
First, what is State Capitalism? State Capitalism is, put simply, the State ownership of the means of production. In a proletarian democracy the State is in the service of the proletariat and so in this way under State Capitalism the proletariat owns the means of production through the State by proxy. This however should be distinguished from State Capitalism under a bourgeois democracy where the State would instead be owned by the capitalists. For this reason, State Capitalism would only be desirable under proletarian democracy. Thus State Capitalism holds a precarious position because of the role it can play depending on the ruling political organization.
Next, why is State Capitalism good in proletarian democracy? Following a successful revolution it will be necessary for the new socialist state to set priorities for the redistribution of wealth and commodities as a way to ensure that the needs of the proletariat are met and to ensure the destruction of the capitalist class. These goal cannot be quickly achieved without centralized direction of some kind. Therefore, the ownership of the means of productions through the State is advisable. While the direct ownership of the means of production by the proletariat would be able to achieve the same goal, it would be less efficient because of the disjointed nature of the redistribution in such a decentralized system. In the event of a peaceful transition away from Capitalism, State Capitalism would be the most logical step. This would most likely be in the form of the nationalization of all industries. The State would then become the guarantor of the proletariat's need and work to redistribute wealth in the economy.
All of this is not to say that State Capitalism is Socialism, it is not. However, State Capitalism is in my opinion like Socialism in that it can be a transitional stage on the way to Communism. As the wealth in the economy is redistributed, the capitalist class is destroyed, and the needs and wants of the proletariat satisfactorily met the system would need to transition to Socialism, or the direct ownership by the proletariat of the means of production. This would remove the State from its role as economic planner and in its place the proletariat would directly assume the role of managing the production and distribution of goods and services. The State could then transition to being a kind of watchdog to ensure that Capitalism does not reemerge. As the proletariat more efficiently distributes goods and services, the State would no longer have any need to exist. This would lead to the State ceasing to exist and would finally usher in true Communism.
I feel that I must state again that State Capitalism is not meant as an end state, a necessity, or even necessarily desirable. My intention is to show that State Capitalism under a proletarian democracy could be used to speed up the transition to Socialism or at least to ensure that such a transition happened efficiently. Too often State Capitalism is described as Capitalism with a Marxist face. Instead we should try ad view it as one of many possible tools in the transition from Capitalism to Communism.
I also fell the need to describe some of the potential pitfalls of State Capitalism. We can learn much from the failure of State Capitalism in the the Soviet Union and China. In the USSR we saw the State latch on to its role as economic planner and refused to give up its status. This led to the entrenchment of the state bureaucracy and the eventual failure of the USSR due to economic stagnation and poor management. The opposite has happened in China. Because State Capitalism in China failed to properly industrialize the nation, when the US came knocking with offers to build factories on the condition that corporations be allowed to run them, the Chinese jumped on the opportunity. This ushered in the end of State Capitalism in China and the restoration of true Capitalism. Both of these examples can occur under State Capitalism given enough time and so a rapid transition from State Capitalism to Socialism in a necessity. However, given these potential problems, it is still my belief that effective use of State Capitalism can be used as a way to transition from Capitalism to Socialism efficiently. By using the State to direct all of the economic powers of society towards increased production we could move into a post-scarcity society in which Socialism can thrive. In fact it has often been noted by many Marxist theorists that without the proper level of economic development Socialism is doomed to fail. State Capitalism can be the engine that drives that development.
I would like to counter some possible criticism stemming from the belief that I am trying to assert a more or less gradual change from Capitalism to Socialism. Rather, my emphasis in using State Capitalism is that it much be coupled with rapid and radical changes in economic conditions. Failure to do so could result in the entrenchment of State Capitalism as in the USSR or the reversal of the revolution and the reemergence of Capitalism as we have seen in China. I would also like to say that I am not saying the State Capitalism must be implemented. If in the course of the revolution it becomes apparent that a direct transition to Socialism is possible then by all means that is the more favorable route. But given the current distribution of wealth across the globe it is my belief that some period of State Capitalism would be necessary in order to bring those less developed parts of the world up to a modern standard of living. By using the State as the engine of this process we could quickly usher in a new age for humanity where no person is forced to go without the basic necessities of life simply because of the economic conditions where they live.
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