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State socialism is a classification for any socialist political and economic perspective advocating state ownership of the means of production either as a temporary measure in the transition from capitalism to socialism, or as characteristic of socialism itself. It is often used interchangeably with state capitalism in reference to the economic systems of Marxist–Leninist states such as the Soviet Union to highlight the role of state planning in these economies, with the critics of said system referring to it more commonly as "state capitalism". Libertarian and democratic socialists claim that these states had only a limited number of socialist characteristics. However, Marxist–Leninists maintain that workers in the Soviet Union and other Marxist–Leninist states had genuine control over the means of production through institutions such as trade unions.
State socialism is held in contrast with libertarian socialism, which rejects the view that socialism can be constructed by using existing state institutions or by governmental policies. By contrast, proponents of state socialism claim that the state—through practical considerations of governing—must play at least a temporary part in building socialism. It is possible to conceive of a democratic state that owns the means of production, but it is internally organized in a participatory, cooperative fashion, thereby achieving both social ownership of productive property and workplace democracy in day-to-day operations.
The philosophy of state socialism was first explicitly expounded by Ferdinand Lassalle. In contrast to Karl Marx's perspective, Lassalle rejected the concept of the state as a class-based power structure whose main function was to preserve existing class structures, therefore Lassalle also rejected the Marxist view that the state was destined to "wither away". Lassalle considered the state to be an entity independent of class allegiances and as an instrument of justice that would therefore be essential for the achievement of socialism.
Early concepts of state socialism were articulated by anarchist and libertarian philosophers who opposed the concept of the state. In Statism and Anarchy, Mikhail Bakunin identified a statist tendency within the Marxist movement, which he contrasted to anarchist socialism and attributed to Marx’s philosophy. Bakunin predicted that Marx’s theory of transition from capitalism to socialism involving the working class seizing state power in a dictatorship of the proletariat would eventually lead to an usurpation of power by the state apparatus acting in its own self-interest, ushering in a new form of capitalism rather than establishing socialism.
As a political ideology, state socialism rose to prominence during the 20th century Bolshevik, Leninist and later Marxist–Leninist revolutions where single-party control over the state and by extension over the political and economic spheres of society was justified as a means to safeguard the revolution against counter-revolutionary insurrection and foreign invasion. The Stalinist theory of socialism in one country was an attempt to legitimize state-directed activity in an effort to accelerate the industrialisation of the Soviet Union.
As a political ideology, state socialism is one of the major dividing lines in the broader socialist movement. It is often contrasted non-state or anti-state forms of socialism, such as those that advocate direct self-management, adhocracy and direct cooperative ownership and management of the means of production. Political philosophies contrasted to state socialism include libertarian socialism, anarchist socialism, anarcho-communism, syndicalism, free market socialism, De Leonism and economic democracy. These forms of socialism are opposed to hierarchical technocratic socialism, scientific management and state-directed economic planning.
The modern concept of state socialism, when used in reference to Soviet-style economic and political systems, emerged from a deviation in Marxist theory starting with Vladimir Lenin. In Marxist theory, socialism is projected to emerge in the most developed capitalist economies where capitalism suffers the greatest amount of internal contradictions and class conflict. On the other hand, "state socialism" became a revolutionary theory for the poorest, often quasi-feudal, countries of the world. In such systems, the state apparatus is used as an instrument of capital accumulation, forcibly extracting surplus from the working class and peasantry for the purposes of modernizing and industrializing poor countries. Such systems are described as state capitalism because the state engages in capital accumulation. However, there is a clear difference between those two concepts. In state socialism, the state as a public entity engages in this activity in order to achieve socialism by re-investing the accumulated capital into the society whether be in more healthcare, education, employment or consumer goods, whereas in capitalist societies the surplus extracted from the working class is spent in whatever needs the owners of the means of production wants.
In the traditional view of socialism, thinkers including Fredrick Engels and Saint-Simon took the position that the state will change in nature in a socialist society, with the function of the state changing from one of "political rule" over people into a scientific administration of the processes of production. Specifically, the state would become a coordinating economic entity consisting of interdependent inclusive associations rather than a mechanism of class and political control and in the process it would cease to be a state in the traditional definition. In Marxist theory, socialism would eventually give way to a stateless communist society.
Preceding the Bolshevik-led revolution in Russia, many socialist groups including reformists, orthodox Marxist currents such as council communism and the Mensheviks, anarchists and libertarian socialists criticised the idea of using the state to conduct central planning and nationalization of the means of production as a way to establish socialism.
State socialism was traditionally advocated as a means for achieving public ownership of the means of production through nationalization of industry. This was intended to be a transitional phase in the process of building a socialist economy. The goals of nationalization were to dispossess large capitalists and consolidate industry so that profit would go toward public finance rather than private fortune. Nationalization would be the first step in a long-term process of socializing production: introducing employee management and reorganizing production to directly produce for use rather than profit.
Traditional social democrats and non-revolutionary democratic socialists argued for a gradual, peaceful transition from capitalism to socialism. They wish to neutralize or to abolish capitalism, respectively, but through political reform rather than revolution. This method of gradualism implies utilization of the existing state apparatus and machinery of government to gradually move society toward socialism and is sometimes derided by other socialists as a form of "socialism from above" or political "elitism" for relying on electoral means to achieve socialism.
In contrast, Marxist socialism and revolutionary socialism holds that a socialist revolution is the only practical way to implement fundamental changes in the structure of society. Socialists who advocate representative democracy believe that after a certain period of time under socialism the state will "wither away" because class distinctions cease to exist and representative democracy would be replaced by direct democracy in the remaining public associations comprising the former state. Political power would be decentralized and distributed evenly among the population, producing a communist society.
The economic model adopted in the former Soviet Union, Eastern Europe and other Communist states is often described as a form of state socialism. The ideological basis for this system was the Marxist–Leninist theory of socialism in one country. The system that emerged in the 1930s in the Soviet Union was based on state ownership of the means of production and centralized planning, along with bureaucratic management of the workplace by state officials that were ultimately subordinate to the all-encompassing communist party. Rather than the producers controlling and managing production, the party controlled both the government machinery which directed the national economy on behalf of the communist party, and planned the production and distribution of capital goods.
Because of this, classical and orthodox Marxists as well as Trotskyist groups denounced the "Communist" states as being Stalinist and their economies as being state capitalist or representing degenerated workers' states, respectively.
Trotskyism argues that the leadership of the Communist states was corrupt and that it abandoned Marxism in all but name. In particular, some Trotskyist schools call those countries degenerated workers' states to contrast them with proper socialism (i.e. workers' states), while other Trotskyist schools call them state capitalist to emphasise the lack of true socialism and presence of defining capitalist characteristics (wage labor, commodity production and bureaucratic control over workers).
Otto von Bismarck implemented a set of social programs between 1883–1889 following his anti-socialist laws, partly as remedial measures to appease the working class and detract support for the Social Democratic Party of Germany (SPD). Bismarck's biographer A. J. P. Taylor said: "It would be unfair to say that Bismarck took up social welfare solely to weaken the Social Democrats; he had had it in mind for a long time, and believed in it deeply. But as usual he acted on his beliefs at the exact moment when they served a practical need". When a reference was made to his friendship with Ferdinand Lassalle (a nationalist and state-oriented socialist), Bismarck said that he was a more practical "socialist" than the Social Democrats. These policies were informally referred to as "State Socialism" by liberal and conservative opponents and the term was later adopted by supporters of the programs in a further attempt to detract the working class from the SPD, with the goal of making the working class content with a nationalist-oriented capitalist welfare state.
Otto von Bismarck made the following statement on his social welfare programs:
Whoever has pensions for his old age is far more easier to handle than one who has no such prospect. Look at the difference between a private servant in the chancellery or at court; the latter will put up with much more, because he has a pension to look forward to.
Many libertarian socialists, syndicalists, mutualists and anarchists go further in their critique, deriding even Marxism as state socialism for its support of a temporary, proletarian state instead of abolishing the state apparatus outright. They use the term in contrast with their own form of socialism, which involves either collective ownership (in the form of worker cooperatives) or common ownership of the means of production without state economic planning. Libertarian socialists and anarchists believe there is no need for a state in a socialist system because there would be no class to suppress and no need for an institution based on coercion and thus regard the state being a remnant of capitalism. Most also hold that statism is itself antithetical to true socialism, the goal of which is the eyes of libertarian socialists such as William Morris: "To destroy the state and put free society in its place".
State socialism is often referred to by detractors simply as "socialism". For example, Austrian economists such as Ludwig Von Mises and Friedrich Hayek continually used the word "socialism" as a synonym for state socialism and central planning. The attributive "state" is usually added by socialists with a non-state based method for achieving socialism to criticize state socialism. Anarcho-syndicalists and following on from Tony Cliff, many Troskyists, deny that it even is socialism, calling it instead "state capitalism". Those socialists who oppose any system of state control whatsoever believe in a more decentralized approach which puts the means of production directly into the hands of the workers rather than indirectly through state bureaucracies—which they claim represent a new elite.
Trotskyists believe that central planners, regardless of their intellectual capacity, operate without the input and participation of the millions of people who participate in the economy who understand/respond to local conditions and changes in the economy, and because of this criticize central state planning as being unable to effectively coordinate all economic activity.
Orthodox Marxists view state socialism as an oxymoron. While an association for managing production and economic affairs would exist in socialism, it would no longer be a state in the Marxist definition (which is based on domination by one class). This leads some socialists to consider "state socialism" a form of state capitalism (an economy based on wage labor and capital accumulation, but with the state owning the means of production), which Engels states would be the final form of capitalism.
Today, many political parties on the political center-left advocate a mild version of what may be considered "mixed economies" or "regulated capitalism" in the form of modern social democracy, in which regulation is used in place of ownership. These social reformers do not advocate the overthrow of capitalism in a social revolution and they support the continuing existence of the government, private property and the capitalist economic system, only turned to more social purposes. Modern social democracy can also be considered "state capitalism" because the means of production are almost universally the private property of business owners and production for voluntary exchange is carried out rather than production for use.
Accordingly, after World War II the Soviet model was adopted throughout the state-socialist world.
Lenin defended his actions, arguing that the Revolution could be consolidated 'only through dictatorship, because the realization of the transformations immediately and unconditionally necessary for the proletariat and the peasantry will call forth the desperate resistance of the landlords, of the big bourgeoisie, and of Tsarism. Without dictatorship, it would be impossible to defeat counter-revolutionary efforts.
Marxist theory was elaborated for, and based on, the most developed countries of the world. Although the state socialist project originated from Marxist theory, it was, however, a deviation from the original theory of Karl Marx. The application of this theory in backward countries, starting with Lenin’s Russia, can be considered as turning it to the other extreme – that is, to a revolutionary theory for the poorest countries of the world
The repressive state apparatus is in fact acting as an instrument of state capitalism to carry out the process of capital accumulation through forcible extraction of surplus from the working class and peasantry
It should not be forgotten, however, that in the period of the Second International, some of the reformist currents of Marxism, as well as some of the extreme left-wing ones, not to speak of the anarchist groups, had already criticised the view that State ownership and central planning is the best road to socialism. But with the victory of Leninism in Russia, all dissent was silenced, and socialism became identified with ‘democratic centralism’, ‘central planning’, and State ownership of the means of production.