Market capitalism and state capitalism

GRAZIA.TANTA@GMAIL.COM 3/3/2021 1
Market capitalism and State capitalism
In common capitalism, of the so-called market
economies, the State oligarchies are a kind of
functionalism serving the enlargement of private capital,
which decide on redistribution. In State-capitalism that
bureaucracy takes power, appropriates the income
generated and, decides and subordinates private
capital.
Summary
1 - State, an essential element for the success of capitalism
2 - Where a world of nation-states has led us
3 - The role of the State in the practice of socialism
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1 - State, an essential element for the success of capitalism[1]
If the State is an essential element for the management and accumulation of capital,
with the concomitant domestication of work, will it be strange that in the USSR and,
other countries where the said socialist model was applied, State had assumed that
role? Is the existence of a State (apparatus) a technical-administrative parameter or, a
political element, of segmentation and hierarchy of a population, between governors
and governed?
By State is meant the apparatus generated to build capitalism as a mode of production,
from the 17th century onwards, aside to the Protestant reform, in a process whose
maturity was reached with the French Revolution; and followed by a fleeting essay on
the social organization based on self-organization, the Paris Commune.
The State has established itself as an essential device to delimit a territory (nation-state)
for the exclusive use of its capitalists, of its export textile producers, of its commercial
shipowners, of its pirates/privateers, of its bankers, their colonies and, for their defense
against competition. These functions were aggregated under an ideology - nationalism
- then symbolized by a king and, still, in northern Europe, where capitalism was more
developed, by a national church whose maximum symbol was also the king (a practice
that has been abandoned in recent times). The strong external competition, the
conquest or the prey of the resources of the rest of the planet, demanded a scale that

would materialize as that provided by the State apparatus, which constituted the
aggregating element of the nation-state.
In the logic of feudalism, the concept of State does not apply; authority and
arbitrariness came from the reigning feudal lord; the least harm to the people would be
that their homes and fields would not be plagued by war and plunder, that young
people would not be chased to serve in the war, or that girls would not suffer the rape
practiced by passing soldiers.
The nation-state and the State are instruments created by capitalism[2], based on local
groups of capitalists, organized for the exclusive exploitation of territory; or rather, for
the exploitation of the labor product of the dispossessed of means of production. The
possession and exploitation of that territory and its population required the borders
surveillance by armed guards, both to prevent intrusions from outside, and the flight of
workers abroad; and the State, with its taxation apparatus, was in charge of covering
these expenses. On the other hand, the strong competition for the colonial prey forced
an enormous mobilization of financial and human resources in the heart of each
nation-state, in a frequent state of war with the competitors: or, for the subjugation of
the colonial peoples and the transplanted slaves from Africa.
The promotion of patriotism in each nation-state was intended to generate the duty of
defending the assets of the rich and their State, by the majority of its inhabitants, who
had nothing of their own to defend: this duty even included the supreme sacrifice of
life, to defend capitalists assets. The idea of homeland is an immense lie that makes
dispossessed of assets defend the wealth of their wealthy countrymen.

The emergence of transnational companies and globalized financial capital, in growth
and with an increased power, makes borders irrelevant [3], less for people and more to
market holiday (physical or digital) and tends to reduce the State apparatus national
essentially the role of tax collectors and the pacification of the workforce. Even the
glorious armed forces of nation-states came to be constituted by professionals and
mercenaries, no longer through mandatory military service, unsuitable for the
sophistication of weaponry.
The relevance of the State apparatus is shown in its constant search to make the
territory competitive, attracting investment, mainly external and from transnational
companies; to reduce income and workers' rights to support companies, to strengthen
their capitalization, since in the logic of capital, the gods first created the capitalist and
then the slave, the wage earner to serve him and generate wealth; this, synthetically
referred and desired by the political classes, like ad aeternum additions, of a nebulous
GDP. As this concern is present in all States, materialized by a myriad of instruments for
the fulfillment of this aim, there is fierce competition between nation-states, through
wars (in their own name or, by proxy), environmental destruction, columns of refugees,
poverty, epidemics; in the face of the optimistic and smiling air of the Gates, the
Zuckerbergs, the Bezos and the like, wealth collectors and concerned with the great
dimension of Humanity.
Among the precursors of the current situation, Rousseau, as an ideologue of the
bourgeoisie, generated the idea of a social contract between the possessed and the
destitute, all conformed to their social and economic situation; this contract, although
no longer referred to today, is what reveals the current situation in which the State and
the political class are in charge of maintaining law and order, involving work in the
salvific lust synthetically represented by GDP growth.
The concept of social contract emanates from that of social cohesion, as an instrument
of sedimentation of a political, economic and social structure whose articulation leads
to a greater accumulation of capital and perpetuates a peaceful social stratification. The
caretaker of this contract is the State, whose monopoly on coercive power is the
greatest guarantee of the continuity of capital accumulation, of a mass of exploited as
instruments of that. To work, that device requires a functionalism - the political class -
producer of ideology and technocratic; and as much as necessary, rapacious and
repressive, with the massive intervention of several police, laws limiting rights or,
littered obligations, regressive taxation, etc. And, focused on presenting service - to
capitalists, workers and the instances of global capital - through measures such as the
referred GDP growth, attraction of foreign investment, low labour cost, etc.
This social contract would, in fact, for Rousseau, be the instrument of guaranteeing a
social cohesion that would keep the noble and bourgeois oligarchies in power at the

time, having as a symbol of that unity, a king. The third state was the huge and
heterogeneous multitude of those excluded from power that served as a complement
to those mentioned above, in order to have the total inhabitants of the nation-state.
The State, therefore, represented and supported the interests of the oligarchies, on the
domestic scene or in the international arena, and guaranteed the use of the necessary
coercion towards the commoners, whose duty would be to work and obey. This was, in
summary, the main raison d'être of the State that emerged from the development of
capitalism and even today.
This imposed social cohesion is a care, a concern, a coercion, inherent in the very
notion of the State, having as a concrete agent, a political class. Later, Durkheim, in
order to avoid the problems caused by the resistance of the dispossessed, which could
harm the desired capital accumulation, invents a neutral State, generating consensus
but always attentive and ready to use repression, in the form of a law or a club, about
workers. The litany of GDP growth had not yet emerged as the defining element of
people's unity and happiness.
A neutral State do not exist, nor has it ever existed. The social strata that benefit most
from its existence and performance will, if not increase its privileges, at least maintain
them, seeking to neutralize, or co-opt part of the competition, if necessary; for that,
they count on the performance of one or more parties - a type of functionalism
specialized in the traffic of influences - that will be in charge of using State power for
party benefit and of the economic strata most committed to this party cooptation [4].
Thus, the State is a coercive apparatus that aims to guarantee, by nature, the stability of
hierarchies within a nation-state; the convenient segmentation from the social and
political point of view, through a stable articulation, accepted by rich and poor;
avoiding, through the political class, conflicts resulting from social inequalities;
maintaining the narrative of patriotism as a way of channeling to other peoples or,
other nation-states, of responsibilities and animosities regarding problems that, in fact,
are internal.
Where there is a State there is no democracy; or, in a less lapidary way, only formula is
truncated or, false of the same. The State emerges as an instrument of the nation-state
in general, under the control of possessed social strata, managers of the main channels
of social control.
In today's societies, a nation-state is called democratic only because there are regular
elections and various voting possibilities; although little differentiated, within the scope
of a narrow and specious definition of democracy that allows the perpetuation of
oligarchies, with low levels of conflict so that there is no damage to the accumulation of
capital.

As the increase in State power has historically been established:
 The development of capitalism, synthetically anchored in the industrial
revolution, had several effects, leading to a greater complexity of economic relations
and to a greater diversity of classes and social strata. Connections between people
became denser, especially with the great growth of cities and d the urban
population; these multitudes of working poor, starving unemployed and newly
arrived in the city in search of a better life, led to frequent riots, strikes and protests
that had as counterbalance, strong police repression. That demanded a great
financial effort for the maintenance of police officers on the part of State bodies -
government or municipalities - if not of hooligans groups or criminals paid to break
movements claim workers.
 The role of the State in maintaining frequent conflict situations required, at all
times, large financial resources, sometimes obtained by loan s bankers for the
financing of armies, training of officers and recruitment of young people to war.
These conflicts could result both from the redefinition of borders in Europe, and from
the dispute over the control over resources and peoples in colonial areas, as well as
to the defence of merchant ships against piracy. The emergence of the USA launched
a strong competitor in this process, with a vast and rich territory open to the West
and the South, whose defenders it did not offer were vigorous resistance. In turn, the
independence of the colonies of the Iberian countries constituted, essentially,
another business area for the dominant powers - which could already call
neocolonialism. These conflicts between nation-states still required high State costs
with the existence of a competent diplomatic corps.
 The drive of competitive capitalism forced to investments in education and
research, in the natural sciences, astronomy, engineering, navigation, weaponry,
geography or geopolitics with Mahan and Mackinder to express the ambitions of the
great powers; but it also required the preparation of people with practical,
administrative and accounting knowledge of the nation-states, in an accelerated
process of structuring, creating a national identity. Later, other knowledge became
necessary, using the energy of steam and electricity, the development of railway
tracks, roads, transmissions, etc. Health care was essential for the existence of a
qualified, numerous and healthy workforce (remember Bismark's pioneering action in
the field of workers' health). In all these areas, there was a strong commitment,
whose expenses required a counterpart in revenue. Although there were no concept
of GDP it was intended to a stable social stratification, non - confrontational and,
unequal distribution of wealth and income accepted without discussions or conflicts;
superiorly managed by the political class and maintained by the State apparatus and
its material, legislative and ideological resources.

2 - Where did a world of nation-states lead us?
As is clearly visible, the nation-states world of nowadays features up by:
 A general subordination relation to global capital, especially financial, within a
scale where it stands out, at different levels, those who have power to establish forms
of unilateralism and, the overwhelming majority of the remaining, totally stripped of
that power, whose equality with the powerful comes down to having a hymn and a
flag;
 The existence of nation-states continues to be a way of dividing human beings,
of generating and taking advantage of antagonisms, within the framework of a
political macro-structure, in which the majority of these nation-states have little or no
margin of viability or affirmation. Its constitution, in most cases, resulted from the
arrangements and the convenient sharing between the colonial powers during the
phase of the rise and geographical expansion of capitalism;
 In recent decades the proliferation of transnational corporations and their
power, acting under a global logical, targeting the production of components,
useless in itself, to better master the production chain, become dependent the
countries where those are produced by destroying those in any logic of rational
integration into a national integration. And, therefore, making many nation-states as
mere logistical platforms, with the capture of the respective political classes, as local
civil servants;
 The scale of migrations for economic reasons, ethnic or military conflicts show
the failure of the nation-state model as a single and homogeneous entity, among
equals, creating significant portions of those who are conveniently excluded, from
vast areas that are tribalized or given over to banditry:
 These antagonisms result of various types of artificiality present in many nation-
states and of their borders, as an effect of the colonial legacy, and including
multicultural entities, poor, disjointed, under the hegemony of one of them,
submitted to the interests of global companies that exploit their resources. Other
situations include the existence of feudal monarchies that, due to their wealth, are
courted by the financial system;
 The digital lataformas acting in a global logic, beyond the borders and nation-
states generating monopolist powers and aggressive forms of action and of tax
evasion, against which national governments, combine their impotence with formulas
of subservience and/ or association;
 The existence of international institutions (WTO, IMF...) aims to define the rules
of economy, the formation of income and its distribution, riding one constant growth

unsatisfactory and an eternal squeeze with the debt imposed on crushing the most
nation-states;
 All nation-states have a State, a political class, a bureaucracy, representing the
national capital and also the representations of global capital, all committed in the
"growth" which, however, little touches the overwhelming majority of the population;
which, however, is beset by fiscal serve at the jump to the income derived and, by the
normality of holding large debts; especially to have access to housing, since the
States have long since given the matter to the gluttons of real estate and financial
speculation.
3 - The role of the State in the practice of socialism
In the 18 Brumaire, Marx states that the State machine is an autonomous and parasitic
body managed by the executive power, which emerged in the transition from feudalism
to capitalism. In this long process , experts of the Ancien Regime - lawyers, priests,
soldiers - they were being adapted to the new situation, serving the apparatus of the
capitalist State and not as servants of a king.
Marx, by focusing on capitalism in force in the most advanced countries in Europe -
England, France and Germany - showed an optimistic and linear determinism based on
the development of the productive forces and, therefore, he had not imagined that the
first anti-capitalist revolution had arisen in the backward Russia; but he admitted that
the rest of humanity would be free following the progress of those more advanced
countries, socially and economically.
Only in his last years of life did Marx become aware of the existence of agrarian
collectives in Russia that occupied 3/5 of the cultivated land, as seeds of self-managed
forms and alien to the capitalist spirit; and, he also realized that the satisfaction of
human needs should take precedence over the abstract process of capitalist
accumulation. Trotsky, in his authoritarian and militaristic view of political action, would
crush those economic and social structures after the October revolution.
We saw earlier the development of a State apparatus went hand in hand with the
building of the nation-state, both designed for to meet the capitalist development
needs, in the political, economic, social, security at international level, etc. In this
context, capitalists used (and still use) the State apparatus and its bureaucrats to
enhance private capital accumulation, choosing, in the form of electoral contests
among the various party groups, those that can best serve this aggrandizement. To this
model politicians gave the name of democracy, liberal democracy, social-democracy
the ... or market democracy, as we usually say. In fact, it is an oligarchic model that puts
off decisions, the overwhelming majority of the population in favour of a set of political
oligarchies.

Later those same element of the nation-state structure also occurred in countries with
lower economic development, with a class of small and weak capitalists, standing, as a
result, the power of the State bureaucracy, unified as party managers under the name
of worker, communist[5] or another similar emblem, in close connection with union
bureaucracies, also oligarchic. In most of these cases, bureaucracies are present and
control all economic, social, labour, cultural, artistic, sports, police, and military bodies.
The heritage of fragile political, social and economic structures came to facilitate the
establishment of hegemonic powers, self-anointed as the only source of all political
knowledge, trumpeting an undeniable superiority - institutional and experiments on
the whole population, poor, little educated, taken by a strong religious spirit,
accustomed to the marginalization and brutality of power. As stated in a Portuguese
proverb “flies change, the shit is the same”.
The notion of State apparatus assumed great importance around the establishment of
a Soviet State, following ideas on the passage from monopoly capital (financial) to
State monopoly capitalism, in the close-up view of Hilferding and Bukharin; or, an
apparatus for the general management of production and distribution according to
Lenin. This did not raise the question of the use of the State as a repressive,
bureaucratic and military apparatus, but of its rationalized use in the service of the
revolution; and Trotsky accentuates this tendency by defending the militarization of the
economy (see Dictionnaire Critique du Marxisme pag. 5 1/5 2).
In reality, in the USSR it was a question of proceeding to capitalist development with an
objective focused on an accelerated “economic growth” of the Keynesian type,
concentrated on large, statized production units, which guaranteed adequate increases
in productivity; on the other hand, small property, in industry, commerce and the
countryside, was residual. It was expected that this would result in a substantial
improvement in the population's standard of living and a healthy political and social
coexistence.
In the USSR, the technical decision rested with party members, within the framework of
the detailed guidelines of the omnipresent and omniscient Plan, produced and
enforced by the high structures of the party-state - a political innovation that unified
the State apparatus with the political class, while which all national structures, from art
to mining, fit. In this structure, it was essential to strictly adhere to the superior
guidelines to succeed in the structures of the Party and in life.
As we know, in market democracies the State apparatus is periodically parasitized by
the members of the party that wins the elections, but the logic is that of rotation in the
access to the pot, between two twin parties, both well rated with the local capitalists
and the transnationals; what matters is to convey to the commoners the idea that there
is a difference between choosing a dark black donkey or a light black donkey.

In short:
a) In the initial Western model, the State apparatus supports local capitalists (national)
in the process of centralization and accumulation of capital, helping to win the
competition of foreign capitalists; and, conversely, it seeks to support national
capitalists to conquer foreign markets. Subsequently, in the current capitalism in which
the role of borders is diluted, large companies and high finance are linked with
domestic capitalists in a globalized context, monitoring or corrupting the governmental
service elite.
b) In the old Soviet model, the State constitutes itself as a collective capitalist, as a
manager of economic activity, to overcome the weakness of national private capital;
and, on the other hand, it defends itself in the face of foreign investment, only admitted
sparingly or in partnership, in cases where the national economic structure(ized) does
not have the appropriate means, mainly technological.
In the first case, we talk about a market economy; the second was called socialism
although it was, in fact , State capitalism.
This and other texts in:
http://grazia-tanta.blogspot.com/
https://pt.scribd.com/uploads
http://www.slideshare.net/durgarrai/documents
[1] Why is there no anti-capitalist strategy?
http://grazia-tanta.blogspot.com/2021/02/porque-nao-ha-uma-estrategia.html
[2] On this topic:
https://grazia-tanta.blogspot.com/2019/12/estado-nacao-nacionalismo-instrumentos.html
https://grazia-tanta.blogspot.com/2019/12/estado-nacao-nacionalismo-instrumentos_28.html
https://grazia-tanta.blogspot.com/2020/01/estado-nacao-nacionalismo-instrumentos.html
The precarious future of the nation-state - 1, 2, 3, 4
https://grazia-tanta.blogspot.pt/2017/11/o-futuro-precario-do-estado-nacao-1.html
[3] The coronavirus crisis came to establish oligarchic, authoritarian and impoverishing procedures on the
part of the States that had been promoting free movement so much. On the other hand, the States
promoted confinements, the sickly telecommuting, the closing of schools, unemployment, poverty, police
arrogance, fines, discrimination against the poorest in public transport, along with restrictions on
circulation for all. And, eventually conditioning the circulation to those who are not vaccinated and refuse
to fatten databases about humans to the delight of Big Pharma and the information manipulators. All this

for a virus that has so far affected 1.52% of the world population and that killed 2.2% of those infected,
among whom the older ones, who have long been pushed, by capitalism to homes that look like prisons…
since they are not competitive!
[4] The situation experienced in Portugal - centered on the time of regime change (1974) - is very clear
regarding the inequalities
https://grazia-tanta.blogspot.com/2018/07/a-longa-marcha-das-desigualidades-1-o.html
https://grazia-tanta.blogspot.com/2018/08/a-longa-marcha-das-desigualidades-2-da.html
[5] Or, from a cosmetic coalition like the SED, in the German Democratic Republic

Market capitalism and state capitalism

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