page_title: State capitalism
section_title: By liberal economists
hierarchical_section_title: State capitalism / Origins and early usage / By liberal economists
caption_attribution_description: English: Young en:Murray Rothbard
context_page_description: State capitalism is an economic system in which the state undertakes business and commercial economic activity and where the means of production are organized and managed as state-owned enterprises, or where there is otherwise a dominance of corporatized government agencies or of public companies such as publicly listed corporations in which the state has controlling shares. Marxist literature defines state capitalism as a social system combining capitalism with ownership or control by a state. By this definition, a state capitalist country is one where the government controls the economy and essentially acts like a single huge corporation, extracting the surplus value from the workforce in order to invest it in further production. This designation applies regardless of the political aims of the state. Many scholars argue that the economy of the Soviet Union and of the Eastern Bloc countries modeled after it, including Maoist China, were state capitalist systems. They also argue that the current economy of China constitutes a form of state capitalism.
  There are various theories and critiques of state capitalism, some of which existed before the October Revolution.
context_section_description: Murray Rothbard, an anarcho-capitalist philosopher, used the term state capitalism interchangeably with the term state monopoly capitalism and used it to describe a partnership of government and big business in which the state intervenes on behalf of large capitalists against the interests of consumers.
  Rothbard distinguished it from laissez-faire capitalism, where big business is not protected from market forces. This usage dates from the 1960s, when Harry Elmer Barnes described the post-New Deal economy of the United States as "state capitalism". More recently, Andrei Illarionov, former economic adviser to Russian President Vladimir Putin, resigned in December 2005, protesting Russia's "embracement of state capitalism".
  The term state capitalism is not used by classical liberals to describe the public ownership of the means of production. The explanation why is given by the Austrian School economist Ludwig von Mises, who argued:
  The socialist movement takes great pains to circulate frequently new labels for its ideally constructed state. Each worn-out label is replaced by another which raises hopes of an ultimate solution of the insoluble basic problem of Socialism — until it becomes obvious that nothing has been changed but the name. The most recent slogan is "State Capitalism." It is not commonly realized that this covers nothing more than what used to be called Planned Economy and State Socialism, and that State Capitalism, Planned Economy, and State Socialism diverge only in non-essentials from the "classic" ideal of egalitarian Socialism.
caption: Murray Rothbard, who advanced a right-libertarian analysis of state capitalism
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