I have often heard the term “state capitalism” being used by Western academics to refer to AES states like China or Vietnam. Lenin also uses the term a lot in The Tax in Kind and distinguishes it from true socialism.
I have often heard the term “state capitalism” being used by Western academics to refer to AES states like China or Vietnam. Lenin also uses the term a lot in The Tax in Kind and distinguishes it from true socialism.
Central planning with private ownership of capital. The economy is dominated by private enterprise that employs workers for a wage and collect profits from the surplus value created by workers, but politics are in command instead of the anarchy of markets.
Ultimately it’s a strategic step towards achieving socialism; a developmental stage that allows the centrally planned economy to attract foreign investment and implement rapid development until it’s not needed. China, for example, is replacing more and more of its private sector with fully/majority publicly owned companies. I believe a majority of China’s economy is now public, not private. If the trend continues, most private ownership will whither away.
Was it necessary? I don’t think so - this is just how history happened to unfold.
What source do you have that a majority of China’s economy is publicly-owned? The estimates I’ve heard suggest that it is more like 60-80% privately-owned.
Another source from PIIE in January of this year has the private sector declining from 55 percent in mid-2021 to 33 percent in late-2024, with a small uptick back to 34% at the end of the year. Public sector ownership over that same time period went from 31 percent to 51 percent.
This one also doesn’t seem to include township village enterprises (TVE) which is probably 10-15% of economy
Honestly, i don’t see how the percentage of state owned vs privately owned matters. As long as the banks are state owned, everything else could be privately owned really. Tho it’s certainly better to have nationally estrategic industries being state owned. Many capitalist countries hold a large amount of SOE, and it doesn’t make them any less capitalist since capitalists hold the political power.
its important that banks and other financial institutions are state owned because it effectively means that the state controls the savings of all society and gets to decide on what to invest these savings, which in the case of China it’s clear that it is invested in national development.
It’s a way to measure socialist development post-revolution.
State capitalism is an example of an early stage of development, where they need to attract foreign capital in addition to just using domestic banks to fund development. Once that’s no longer necessary because they have built up their domestic capacity they can start to phase it out entirely and public companies/public investment can replace private and foreign capital.
https://chinareporting.blogspot.com/2009/11/class-nature-of-chinese-state-critique_26.html?m=1#_ednref18
This is from 2009 but provides a lot of good data on the subject.
An important note from it is that most private companies in China at the time had less than 10 employees so it’s not big Bourgeoisie just because it is private. The majority of the GDP at the time came from SOEs
Edit: some more recent data says “The total capital of firms with some level of state ownership has risen to roughly 68% of total capital of all firms (40 million) in the economy in 2017. The share owned by the central government has declined while that of local governments has risen.” https://sccei.fsi.stanford.edu/china-briefs/reassessing-role-state-ownership-chinas-economy#%3A~%3Atext=The+total+capital+of+firms%2Cin+the+economy+in+2017.
Note that SOEs doesn’t include township village enterprises which are publicly owned at the local level