I find that a lot of people get hung up on the term “state capitalism” when discussing transitional phases. The key point they miss is that while the form might resemble capitalism (wage labor, state as the employer), the content and purpose are fundamentally different.

Under bourgeois capitalism, the entire purpose is the private accumulation of capital. Social good is an incidental byproduct, at best. In a socialist transition, the state uses these same economic forms as a tool for social development by building infrastructure, providing healthcare, ensuring food security, and directing the entire economic surplus back into society. It’s the difference between a machine designed to enrich a class of owners, and one designed to uplift the entire working class.

Fucking lib! I knew something was up with that guy! /s

I still don’t like the term “state capitalism” and its connotations in modern English, especially out of context of what he is going into detail about (perhaps the connotations are different in 1950s Chinese). For those of us who have only ever known a capitalist government, I think it is confusing to hear “state capitalism” as a distinct form of something; ours is already a state that is run by capitalists. The state part seems redundant and unwieldy. It is a dictatorship of capital.

As opposed to communist-run China, which is a dictatorship of the proletariat.

Both are dictatorships in the sense that they don’t allow the other to have dominant political power, using violence to achieve this, if necessary. Capitalism does this for the purposes of maintaining a parasitic, exploitative relationship. AES states do this for the purpose of transitioning away from capitalism (away from exploitation) and developing toward socialism and then communism. The capitalist keeps the oppressed from gaining power. The communist keeps the oppressor from gaining power. Very important difference.

So looping back to state capitalism and its connotations, in modern English it might be more clarifying to refer to China’s model as socialism with capitalist characteristics (I am open to other ideas). Or if we’re talking about it in the context of their culture too, not just as a general model, to just use what they do (if I understand right what it is) and say “socialism with Chinese characteristics”.

When Mao says this, for example:

10. Not only must the implementation of state capitalism be based on what is necessary and feasible (see the Common Programme), but it must also be voluntary on the part of the capitalists, because it is a co-operative undertaking and co-operation admits of no coercion. This is different from the way we dealt with the landlords.

He appears to be talking about capital as investment and growth of enterprise when referring to cooperation, rather than capital as currently-existing parasitic relationship (e.g. landlords). That’s not to say the first kind is all good and wholesome, and can’t develop into a parasitic relationship, but just that it seems to be about developing the productive forces within the confines of a communist vanguard party. Which is a very different implication than, say, thinking that he’s saying “cede some power to capitalists” or something.

People should read Principles of Communism by Engels, section 18:

(i) Limitation of private property through progressive taxation, heavy inheritance taxes, abolition of inheritance through collateral lines (brothers, nephews, etc.) forced loans, etc.

(ii) Gradual expropriation of landowners, industrialists, railroad magnates and shipowners, partly through competition by state industry, partly directly through compensation in the form of bonds.

(iii) Confiscation of the possessions of all emigrants and rebels against the majority of the people.

(iv) Organization of labor or employment of proletarians on publicly owned land, in factories and workshops, with competition among the workers being abolished and with the factory owners, in so far as they still exist, being obliged to pay the same high wages as those paid by the state.

(v) An equal obligation on all members of society to work until such time as private property has been completely abolished. Formation of industrial armies, especially for agriculture.

(vi) Centralization of money and credit in the hands of the state through a national bank with state capital, and the suppression of all private banks and bankers.

(vii) Increase in the number of national factories, workshops, railroads, ships; bringing new lands into cultivation and improvement of land already under cultivation – all in proportion to the growth of the capital and labor force at the disposal of the nation.

(viii) Education of all children, from the moment they can leave their mother’s care, in national establishments at national cost. Education and production together.

(ix) Construction, on public lands, of great palaces as communal dwellings for associated groups of citizens engaged in both industry and agriculture and combining in their way of life the advantages of urban and rural conditions while avoiding the one-sidedness and drawbacks of each.

(x) Destruction of all unhealthy and jerry-built dwellings in urban districts.

(xi) Equal inheritance rights for children born in and out of wedlock.

(xii) Concentration of all means of transportation in the hands of the nation.

The idea of using the state in order to gradually get rid of capital and re-organize the capitalist economy into the socialist economy is right at the beginning of Marx and Engels writings. The reason for this is that people won’t become all socialists on the day one after the revolution, and the social fabric of the society need to change in order to abolish private property. They reached this conclusion using dialectics, because in order to change social thinking you need to first understand the reality you are in, propose a change, and after the change is done, you need to re-assess reality. It’s a scientific process based on learning, proposing and adapting things. So the migration to socialism does not occur overnight.

Early stages of socialism will inevitably involve state capitalism under the dictatorship of the proleteriat. If that sentence sounded confusing then one needs to brush up on dialectial materialism. And some Plekhanov (Defense of Materialism; in particular stagism).

Bro actually read Marx unlike the chronically online leftists.

Genuine question but if Mao was okay with state capitalism then why did Deng stir up so much controversy? I thought the whole reason people didn’t like Deng was because of him bringing about state capitalism.