WI: State Capitalism for All

Imagine a world where most countries in the Western world are state capitalist, meaning public ownership of the means of production, but no confiscation of money. Over time, the difference between rich and poor starts to decrease, as most valuable investments have been replaced by savings accounts. Within 50 years, it's almost an egalitarian world. Preferably, this happens through reform, but in a couple of countries, it could spread by revolution.

POD: WW2

1. What would be the effects in terms of domestic politics of a state capitalist reform?
2. Could it lead to deterioration and decadence as most people are "middle-class".
3. Could it prevent the spread of socialism?
4. Which parties might support this?
5. Which countries would accept this?
 
Imagine a world where most countries in the Western world are state capitalist, meaning public ownership of the means of production, but no confiscation of money.

Well, making Yugoslavia state capitalist is going to be a difficulty… jokes aside, I'm assuming nomenklatura organised collectives with partial "worker" ownership count.

So does the US military-industrial complex historically count? Does a land fit for heros?

Confiscations, or non-compensated nationalisations will occur. I'd suggest the simplest way is by criminal confiscation in cases of industrial manslaughter. Has a side effect of cutting down on industrial manslaughter.

Over time, the difference between rich and poor starts to decrease, as most valuable investments have been replaced by savings accounts. Within 50 years, it's almost an egalitarian world. Preferably, this happens through reform, but in a couple of countries, it could spread by revolution.

I am entirely unsure about this. The question is one of substantive versus formal control. Soviet-style nomenklaturas were incredibly cheap in terms of labour costs and profit, compared to Western bureaucracies and owners, but they both expanded the reproduction of the value form*1, while increasing their control over the labour process*2, and increased their personal consumption. A Western "nomenklatura" will form. It formed historically.

1. What would be the effects in terms of domestic politics of a state capitalist reform?

Winters of Discontent and Hungary 1956es.

2. Could it lead to deterioration and decadence as most people are "middle-class".

Most of us don't follow Spengler while using the term "state capitalism."

3. Could it prevent the spread of socialism?

It did in the Soviet bloc.

4. Which parties might support this?

Progressives, labourites, social democrats, communists, trotskyites.

5. Which countries would accept this?

I'm not sure "countries" is the scale of analysis suitable. Parties and classes seems more relevant. Which means it is a matter of a balance of forces within states between parties and classes.

Orwell's Lion & Unicorn might be a read.

yours,
Sam R.

*1 rolled profits back into capitalisation
*2 they decided more and more, not "the public" or line workers, how work would be organised
 

BigBlueBox

Banned
“State capitalism” is fine when the government only owns industries that would be natural monopolies like railroads, energy, and water. But once the state tries nationalizing everything the end results would look like either the Soviet Union or a failed South American economy.
 
When I said no confiscation of money, that was supposed to indicate people would get to keep their wealth but would have to forfeit their capital, likely in exchange for compensation.

As for why they get to keep their money, it’s quite simple. It’s theirs, and the government doesn’t (immediately) need it. Also, as these rich individuals realize they won’t be able to invest in capital, they will start to buy more luxury goods as a store of value. Nobody wants to hold inflationary cash long term. This jumpstarts the economy one last time.

One good thing about this is that people would start focusing more on saving what they already have, rather than trying to get one up on the other guy. Our system of capitalism is flimsy because we never get to sit down and contemplate if what we’re doing is good for society as a whole.

State capitalism gives us time. The average workweek would be about 15 hours, give or take 5 hours. People could spend more time being creative, or raising their kids, or doing whatever they want. Life itself would be flexible to the human spirit.
 
Last edited:
State capitalism gives us time. The average workweek would be about 15 hours, give or take 5 hours. People could spend more time being creative, or raising their kids, or doing whatever they want. Life itself would be flexible to the human spirit.

Maybe once everyone invests in automation which barely exists now, let alone decades ago. Productivity would be pretty much nil if you the average person only had to show up for an average of 15 hours a week. And since the government would strictly adhere to that rule, the government would end up like a parody of an inefficient bureaucracy.
 
The Soviet-style working week didn't decline. Labourite capitals didn't see a decline. What happens is that the 60 hour week becomes 40 hours normal and 20 overtime. Nomenklatura are incredibly hungry for productive labour hours (note not labour power, they're dumb about skill).

What you will see is more GDP on social consumption (health, education, mass housing) and less on white goods, electrical, meat.

Existing nomenklatura did not act in the interest of the working class's leisure, personal consumption or transcendence outside of threats of the overthrow of nomenklatura rule (29, 53, 56, 68). This is important.

They also overcommitted to heavy industry without having machine tools plants or consumer industry to sop the load—so it went straight to military waste.

Need we talk about the repressive apparatus of Poland or West Germany historically? Of the incorporation of workers parties and unions against workers' interests?

To quote some anarchists, "Stalin didn't fall from the moon."

Yours,
Sam R.
 
Most of us don't follow Spengler while using the term "state capitalism."

Not quite sure what you mean by this. Is it supposed to be a contradiction? Because it isn't that bad a descriptor of Spengler's economic politics in Hour of Decision, and to be honest most of his supposed socialism was essentially state capitalism with bells on.
 
Not quite sure what you mean by this. Is it supposed to be a contradiction? Because it isn't that bad a descriptor of Spengler's economic politics in Hour of Decision, and to be honest most of his supposed socialism was essentially state capitalism with bells on.

I mean that most users of "state capitalism" as a term in theory don't hold with concepts of cultural degeneration or decline. Largely because most users are lefts: reds.

The left slowly abandoned moral economies, races and cultural suprematism. But this gradual abandonment has been much much faster than Whigs, Tories or reactionaries.

In part I think it is following "the mature Marx" argument until even the goal of human flourishing has receeded before the hardness of the limits of material possibility. In part cultural relativism is trendy in liberalism and progressivism, and has influenced young leftists succeptable to idealism.

Yours,
Sam R.
 
“State capitalism” is fine when the government only owns industries that would be natural monopolies like railroads, energy, and water. But once the state tries nationalizing everything the end results would look like either the Soviet Union or a failed South American economy.

many Capitalist Western countries had rather expansive public sector. Investment, Transport, Medical, Media, Banking, etc frequently controlled by government with no I'll effect. French TGV railroad, Norway and Italy oil, Singapore investment, Postal banking, British NHS, Finland venture capital, etc. limit of nationalization can be pretty expansive. 1/3 of economy governments controlled doesn't seem have bad effect.
 
1/3 of economy governments controlled doesn't seem have bad effect.

I think the more important question is "how" capitalist value is brought under social "ownership."

Ownership can be formal or substantive. For example, Australia's superannuation funds function either as profit makers for their vendors, or profit makers for their working class pensioners. One is run for profit by normal directorates. The other in trust by a board 50% employer, 50% union. Guess which one has better financial outcomes for pensioners?

Similarly an industry might be fully state owned, but function identically to a privately owned industry. Both for good and ill.

Mondragon, as some say, is simply workers breaking their own teeth.

Let's set up some axes:
Run for profit
Run for trust
Run for purpose

Controlled by traditional capitalist style managers
Controlled by government department style bureaucrats
Controlled by workers council

Government department
Government instrumentality
Government owned corporation
Institution held in social trust
Cooperative held in trust
Cooperative operated for profit
Private enterprise "encouraged by the threat of expropriation or criminal penalty" to operate in social interest
Private enterprise "encouraged by regulation" to operate in social interest
Private enterprise "encouraged by profit" to operate in social interest
Private enterprise so small that it is dominated by other socially controlled institutions (private farmers and the social ag bank)

There's a lot of room for variation: but all of these permutations are capable of expanded reproduction of the value form, in Marx's terms, capitalism and wage slavery.

yours,
Sam R.
 
Hold up here. How would this even work? The government owns the factories and shit but the rich people get to keep their fortunes?

Might be more efficient to require all corporations to transition to being employee-owned. Now that would make things more egalitarian - and such jobs to be really fucking good.
 

BigBlueBox

Banned
many Capitalist Western countries had rather expansive public sector. Investment, Transport, Medical, Media, Banking, etc frequently controlled by government with no I'll effect. French TGV railroad, Norway and Italy oil, Singapore investment, Postal banking, British NHS, Finland venture capital, etc. limit of nationalization can be pretty expansive. 1/3 of economy governments controlled doesn't seem have bad effect.
But state-owned enterprises don’t have a monopoly in investment, media, and banking and they are not state-subsidized (usually). This forces the SOEs to actually compete. If the entire industry was state-owned then there would be stagnation.
 
Hold up here. How would this even work? The government owns the factories and shit but the rich people get to keep their fortunes?

Might be more efficient to require all corporations to transition to being employee-owned. Now that would make things more egalitarian - and such jobs to be really fucking good.
They get to keep all of their cash... because cash itself isn't really that important if they can't invest in companies. Nobody wants to be holding their entire wealth in cash alone. I don't mind if the companies are employee-owned, as long as there is government oversight of the whole system.

What you guys might not see is... if they can't hold investments in stocks (let's assume all stock is owned by the government), then they lose out on that growth. They also can't start new companies themselves. Another great source of wealth goes away. All they have left at that point is savings accounts, money markets, bonds, maybe foreign exchange, etc. This basically solves Piketty's theorem that investment growth>GDP growth. Worker's salaries would continue to increase over time, at say 3% a year, while bonds would increase at a similar rate. Actually, since everyone would be buying up bonds in this scenario (since they can't own stocks), the prices of bonds would increase, decreasing yields. High yield corporate bonds would also disappear, as the government would fund these companies through their own revenues (such as bond sales).
 

BigBlueBox

Banned
What you guys might not see is... if they can't hold investments in stocks (let's assume all stock is owned by the government), then they lose out on that growth. They also can't start new companies themselves.
You realize this is a bad thing right? Anything that hinders starting new companies hinders economic growth.

Another great source of wealth goes away. All they have left at that point is savings accounts, money markets, bonds, maybe foreign exchange, etc.

This basically solves Piketty's theorem that investment growth>GDP growth. Worker's salaries would continue to increase over time, at say 3% a year, while bonds would increase at a similar rate. Actually, since everyone would be buying up bonds in this scenario (since they can't own stocks), the prices of bonds would increase, decreasing yields.

If you don’t confiscate their money they will just invest it overseas in a country that does allow private ownership of companies.

High yield corporate bonds would also disappear, as the government would fund these companies through their own revenues (such as bond sales).
What revenues? If there is no private sector, then there are no taxes. Taxes on public servants and employees of state owned enterprises is just taking money from one pocket and moving it to another. You can’t raise revenue through bond sales unless you will have the revenue to pay them off in the future. The only government revenue will be will be profit from state-owned enterprise. And state-run enterprises typically do not have a history of profitability because governments force them to sell goods and services cheaper than they should and hire more workers than they need to. If the government stops forcing them to keep prices high then prices will skyrocket because there is no competition. Trying to solve inequality by banning private ownership of business is like ending car theft and car accidents by banning cars.
 
That's why this would have to be on an international scale. It wouldn't work within one country. The government could still do sales taxes, excises, tariffs, and could get money from bond sales and savings interest. It wouldn't have to raise much money through taxes because it owns capital, meaning that there's no reason to do income/payroll taxes.
 
This forces the SOEs to actually compete.

A variety of other methods work

Executions and imprisonments worked historically.
HRM & Stakhanovism have worked also.
Pre-levied dividends against budget can work.
As can "as in private enterprise" management and directoral bonuses.
And of course intrafirm competition exists, or state polyopolies.

The history is broader than just private market players.
 
Top