A political formation of ‘state capitalism’ presents the most frequently posed alternative to liberal capitalism. The concept, however, is not only complex but ambiguous. In this chapter, I clarify and refine its different meanings. The term state capitalism (without a hyphen) is a generic term applied to all its forms and concepts. I distinguish between three distinct types of political economy in which the state has a predominant role: state socialism, state-capitalism (with a hyphen), and state-controlled capitalism. All three present theoretical alternatives to liberal capitalism. In the light of these definitions, I discuss the ways scholars use them with respect to socialist societies. I pay particular attention to the ways in which the Soviet Union was, and contemporary China is, ‘state capitalist’.

State capitalism

All states, to varying degrees, since the beginning of capitalism have exercised control over the economy. Historically, the state has enforced laws on the preservation of property and organised policing necessary to maintain laws and public order and to raise taxes. The state has regulated the economy to sustain the value of money and determine the terms of trade and relations with other states. In its neoliberal form, free enterprise capitalism relies on the state not only to make and enforce a legal and political framework but also to extend its geographical reach. Other current practices of states include investment in sovereign wealth funds, raising money through taxes and support of private corporations through selective state ownership. The exercise of these kinds of supervisory roles over a capitalist economy is not usually referred to as state capitalist. The term ‘state capitalism’ is used in a generic sense to describe economies having a modern capitalist system of production in which the state plays a coordinating role over the economy with an active economic presence, usually (but not necessarily) based on significant ownership of productive assets. Joshua Kurlantzick, for example, includes economies where the government has a stake in ‘more than onethird of the five hundred largest companies, by revenue in that country’. Such a definition includes a very wide range of economies and types of regimes, including not only Russia, but also Thailand, Brazil, Turkey, Egypt, Singapore, Venezuela and Norway.