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In all periods of decadence, confronted with the exacerbation of the system’s contradictions, the state has to take responsibility for the cohesion of the social organism, for the preservation of the dominant relations of production. It thus tends to strengthen itself to the point of incorporating within its own structures the whole of social life. The bloated growth of the imperial administration and the absolute monarchy were the manifestations of this phenomenon in the decadence of Roman slave society and of feudalism respectively.

In the decadence of capitalism the general tendency towards state capitalism is one of the dominant characteristics of social life. In this period, each national capital, because it cannot expand in an unfettered way and is confronted with acute imperialist rivalries, is forced to organise itself as effectively as possible, so that externally it can compete economically and militarily with its rivals, and internally deal with the increasing aggravation of social contradictions. The only power in society which is capable of fulfilling these tasks is the state. Only the state can:

  • take charge of the national economy in an overall centralised manner and mitigate the internal competition which weakens the economy, in order to strengthen its capacity to maintain a united face against the competition on the world market.

  • develop the military force necessary for the defence of its interests in the face of growing international conflict.

  • finally, owing to an increasingly heavy repressive and bureaucratic apparatus, reinforce the internal cohesion of a society threatened with collapse through the increasing decomposition of its economic foundations; only the state can impose through an all-pervasive violence the preservation of a social structure which is less and less capable of spontaneously regulating human relations and which is more and more questioned the more it becomes an absurdity for the survival of society itself.

On the economic level this tendency towards state capitalism, though never fully realised, is expressed by the state taking over the key points of the productive apparatus. This does not mean the disappearance of the law of value, or competition, or the anarchy of production, which are the fundamental characteristics of the capitalist economy. These characteristics continue to apply on a world scale where the laws of the market still reign and still determine the conditions of production within each national economy however statified it may be. If the laws of value and of competition seem to be ‘violated’, it is only so that they may have a more powerful effect on a global scale. If the anarchy of production seems to subside in the face of state planning, it reappears more brutally on a world scale, particularly during the acute crises of the system which state capitalism is incapable of preventing. Far from representing a ‘rationalisation’ of capitalism, state capitalism is nothing but an expression of its decay.

The statification of capital takes place either in a gradual manner through the fusion of ‘private’ and state capital as is generally the case in the most developed countries, or through sudden leaps in the form of massive and total nationalisations, in general in places where private capital is at its weakest.

In practice, although the tendency towards state capitalism manifests itself in all countries in the world, it is more rapid and more obvious when and where the effects of decadence make themselves felt in the most brutal manner; historically during periods of open crisis or of war, geographically in the weakest economies. But state capitalism is not a specific phenomenon of backward countries. On the contrary, although the degree of formal state control is often higher in the backward capitals, the state’s real control over economic life is generally much more effective in the more developed countries owing to the high level of capital concentration in these nations.

On the political and social level, whether in its most extreme totalitarian forms such as fascism or Stalinism or in forms which hide behind the mask of democracy, the tendency towards state capitalism expresses itself in the increasingly powerful, omnipresent, and systematic control over the whole of social life exerted by the state apparatus, and in particular the executive. On a much greater scale than in the decadence of Rome or feudalism, the state under decadent capitalism has become a monstrous, cold, impersonal machine which has devoured the very substance of civil society.