State monopoly capitalism

State monopoly capitalism . Theory created by Lenin that stated that the evolution of bourgeois society went from free competition capitalism to imperialism and from monopolies to state monopoly capitalism. Monopoly State Capitalism is one of the forms of the capitalist economy characterized by the transformation of private capitalist companies into state companies and by the control of the State over the economic life of the country.

Summary

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  • 1 Training
    • 1 Material preparation of socialism
  • 2 Essence
  • 3 Bourgeois apology
  • 4 Economic basis of its development
  • 5 Fundamental forms of development
  • 6 State monopoly form of property
    • 1 Fundamental routes of emergence
    • 2 Interweaving with private monopoly ownership
      • 2.1 Non-monopoly private property
    • 3 Emergence of elements of socialism
      • 3.1 Federico Engels
    • 7 Regulation of the economy
    • 8 Economic development programs
    • 9 Theory of the general welfare state
    • 10 State redistribution of national income
    • 11 Militarization of the economy
    • 12 Development in other directions
    • 13 Monopoly gain
      • 1 Its sources
      • 2 Monopoly prices
      • 3 The State and monopoly prices
    • 14 Sources
    • 15 External links

Training

In the pre-monopoly stage, state capitalism served to accelerate the process of capitalist reproduction. State monopoly capitalism was formed in the era of imperialism and is characterized by uniting the largest monopolies with the bourgeois state apparatus, by subordinating said apparatus to the monopolies in order to maximize the stripping of workers and obtain high profits. monopolists.

Material preparation of socialism

State monopoly capitalism constitutes the highest level that the socialization of production under capitalism can reach, and therefore, in Lenin’s words, constitutes “the full material preparation of socialism .” But it does not form a stage of development other than imperialism, nor does it mean that capitalism is peacefully integrated into socialism. It does not change the nature of capitalism, it eliminates the contradiction between labor and capital , it does not end the anarchy of production or the economic crises. State monopoly capitalism does not consolidate the capitalist system, but breaks it, deepens its fundamental contradictions and, thus, brings closer the definitive collapse of capitalism.

Essence

Lenin owes the term “State monopoly capitalism”. The Leninist statement of the union of the force of monopolies with that of the State to form a single mechanism characterizes the political-economic sense of this merger. Under current conditions, expanded capitalist reproduction and securing the growing profits of monopolies are impossible without the active interference of the bourgeois state in the economy.. This is a great economic force; It concentrates immense economic resources and the management bodies of the economy. The largest monopolies, whose economic activity covers not only the national market, but also exceeds its limits, use the State to interfere in the process of capitalist reproduction in order to increase their economic and political power. The bourgeois state as an organization of the capitalist ruling class defends the interests of the monopoly bourgeoisie.

VI Lenin

At this time new forms of intertwining of the State and monopolies emerge; Representatives of monopoly associations participate directly in government bodies, and private and state monopolies become more and more intertwined; the one and the other become elements of the economic machine of state monopoly capitalism, a complex, ramified system of state regulation of the economy is created, etc. The appearance of these forms of intertwining of the State and monopolies characterizes the continuous process of transformation from monopoly capitalism to monopoly state capitalism.

Bourgeois apology

The apology of monopoly state capitalism by the bourgeois theorists consists, first of all, in the affirmation that “neocapitalism” has come to replace the old capitalism, which is distinguished by its dynamism and social harmony, and that the influence of the State in the economy leads to the uprooting of the abuses and deficiencies of passive capitalism.

Reformers also actually adopt bourgeois positions. The bourgeois state, they argue, is above monopolies.

The left-wing revisionists, the Maoists, deny that state monopoly capitalism exists and develops. They start from the criterion that modern capitalism is as it was in the early 20th century .

Economic basis of its development

The economic basis for the development of state monopoly capitalism is the elevation of the level of capitalist socialization (monopolization) of the economy and the accentuation of the basic contradiction of capitalism : between the social character of production and the private capitalist form of appropriation of its results. The Scientific-Technical Revolution contributes to this on a large scale, which makes it necessary for the amount of capital invested and the scale of production to grow permanently. Therefore, the subsequent centralization of capital is necessary for the operation of modern companies.

Public limited companies have made it possible before and, to some extent, now make it possible to concentrate capital for expanded reproduction. Currently, however, the amount of private monopoly capital, even of the most powerful companies and consortia, is insufficient to expand production on the basis of modern technique. Also for them, the extended reproduction of capital and the carrying out of scientific research without the participation of the State are impossible.

Increasingly, monopolies place on the State the task of creating and expanding the so-called infrastructure, that is, the set of companies that serve the different branches of the economy (construction of roads, bridges, power plants, telecommunications lines , etc.), without which modern production cannot function. The State has to cover the maintenance costs of the deficit branches of production and transport, but essential for the monopolies. It buys companies and even deficit and unprofitable entire sectors from private monopolies. The costs of modernizing and operating these companies are covered by the taxpayers.

The aggravated competitive struggle between monopolies on the world market makes it necessary for the bourgeois state to support the economic expansion of monopolies abroad. In order to increase the competitive capacity of monopolies in the foreign market, the State seeks to improve the sectoral structure of the economy, stimulating by all means the development of modern branches that require a great investment of scientific knowledge.

The deepening of the crisis of world capitalism accelerates the development of state monopoly processes. The ruling circles of the imperialist countries seek, in the union of the force of the monopolies and that of the State, the possibility of mobilizing all resources with the aim of paralyzing the process of changing the correlation of forces in the world arena in favor of democratic movements. Monopolies, seconded by the state, apply measures aimed at keeping the working masses under their ideological and political control, and seek to preserve, in new countries, in new ways, their economic and political domination. Currently, the fundamental centers of the world capitalist economy have a highly developed state monopoly economy.

Fundamental forms of development

The merger of the forces of monopolies and the bourgeois state to form a single mechanism, is carried out through the use of the bourgeois state by monopoly capital to intervene in the process of reproduction of social capital in all its phases: production, distribution, exchange and consumption. Based on this, the following fundamental forms of development of state monopoly capitalism can be highlighted under the current conditions:

  1. In all developed capitalist countries the role of the state as an entrepreneur grows. It concentrates in its hands a large part of the means of production and national wealth.
  2. The State influences distribution relationships, not only by directly programming the economic development of the companies that belong to it, but also by exerting indirect influence on the entire economy, through the distribution and redistribution of national income through the state budget. , monetary and credit policy and the regulation of prices and wages .
  3. The State ensures a privileged market to the monopolies, acting as consumers of a large part of the social product produced in the country and of services. This consumption is preferably militaristic in nature.
  4. The bourgeois state is widely used by monopoly capital to finance and support its economic expansion abroad and to finance and support the politics of neocolonialism .
  5. The governments of the bourgeois states, together with representatives of the monopoly capital of their countries, participate in the creation of all kinds of international alliances and agreements, as well as in the development of capitalist integration as an instrument of struggle for a new economic and territorial distribution. of the world.
  6. The most widely used organic form of merging the forces of monopoly capital and the bourgeois state, to form a single mechanism, is the further development of personal union between the representatives of the monopolies and the governments of the bourgeois states.

State monopoly form of property

Fundamental routes of emergence

The state monopoly form of capitalist ownership of the means of production emerged in two fundamental ways. First, as a result of the construction of companies under the state budget, mainly for military purposes; the share of state investments in the global accumulation of fixed capital grows continuously.

Secondly, as a result of nationalization, the nationalization of companies or entire sectors of the economy, as well as the acquisition by the State of part of the shares of monopoly companies. The nationalization of companies is usually carried out by purchasing them under favorable conditions for the owners. Only in some cases, under pressure from the working masses, the assets are confiscated, especially in retaliation. In Francefor example, by collaborating with the German invaders, Renault factories became state property. As a general rule, the bourgeois state nationalizes companies that are on the verge of bankruptcy, thus contributing to the transfer of capital from private monopolies in deficit or low-profitability sectors to profitable ones. To the extent that the State directly appropriates the means of production, it appears as a global monopoly capitalist.

As a result of the nationalization of isolated companies and a series of sectors of the economy; the construction by the State of new companies, in particular, military companies; From the purchase of merchandise , military and strategic materials among them, state property in bourgeois countries constitutes a large part of national wealth.

Interweaving with the property of private monopolies

State monopoly ownership is closely intertwined with the ownership of private monopolies, to which joint-stock companies contribute. The state buys shares of private companies, and private monopolies can in some cases purchase stock packages from state corporations. Therefore, state-owned companies and private monopolies can become state-owned and mixed private companies. The State contributes to the investment activity of private monopolies, granting them subsidies, loans with ease of payment, and lowering taxes on new investments.

The State is a great seller of merchandise and services. Its companies in several countries supply private entrepreneurs with coal, electric power, transport freight by railways, sell accumulated reserves of food, raw materials, minerals, etc. Goods and services are sold to private monopolies at lower prices. At the same time, there are certain limits to the increase in state property, which is mainly concentrated in infrastructure and is a complementary source of enrichment for private monopolies.

State property cannot become the dominant form of property in capitalism, since this does not respond to the interests of the financial oligarchy; the State does not have access to profitable branches.

Non-monopoly private property

Along with private monopoly property and state monopoly property, there is non-monopoly private property, the place and meaning of which have changed substantially: the process of elimination of small and medium-sized enterprises has accelerated, although their number is still quite large; The subordination of a large part of these companies to monopoly capital has been accentuated.

Emergence of elements of socialism

The existence of state property in the countries of monopoly capital does not mean that elements of socialism have appeared within the framework of the capitalist mode of production. Monopoly state property does not lose its capitalist character.

Federico Engels

In the monopoly capital countries two classes subsist: the proletarians and the capitalists. Engels wrote in his work Anti-Dühring that the more productive forcesit takes over the bourgeois state, so many more citizens it exploits. The workers will continue to be salaried workers, proletarians. Capitalist relations are not suppressed, but, on the contrary, are taken to the extreme. As Engels foresaw, the rise of monopoly state property sharpened the contradictions of capitalism. Now the worker does not confront a capitalist, not even a corporation, but monopoly capital in its entirety organized in the State and which exploits the working class and all workers through the entire system of state monopoly capitalism. The economic struggle is intertwined with the political struggle; it is a fight against the economic policy of the bourgeois state. The forms of economic struggle that take on a general or national sectoral character also change.

Regulation of the economy

One of the most important manifestations of state monopoly capitalism is the regulation of the economy. The State influences the economy through budgetary, credit and fiscal policy, the granting of subsidies to certain monopolies and sectors, the influence on the interest rate, the policy of accelerated amortization, the reduction of taxes on profits, etc.

In the conditions of growing instability of the capitalist economy, anti-cycle regulation is widely used, which consists of containing investments in periods of cyclical rise, in order to avoid the imminent overproduction, and in promoting it in periods of crisis and depression. to restrict the decrease in production and accelerate the exit from the crisis.

In the period of industrial boom that usually ends with a new economic crisis, the State tries to mitigate its effects with measures aimed at containing the growth of production. These measures include an increase in taxes and an increase in the interest rate on credit, which leads to a decrease in interest in making new investments and, therefore, in demand for the means of production. In periods of crisis and recession, the policy of increasing purchases by the State of goods and services is applied, complementary facilities are established that favor the activity of monopolies, private investment is stimulated through budgetary policy, and interest to increase the desire of large corporations to increase investments.

Economic development programs

Economic programming that is a form of state intervention in the capitalist production process has spread. The State develops long-term programs for investments, exports, imports, training of skilled labor, conducting scientific research and regulating the proportions between sectors. In practice, these programs, in short, create favorable conditions for the activity of monopolies.

Economic development programs have become a mechanism for concerting the interests of private and state monopolies. The organic form of this concertation is government contracts in which, in exchange for the granting of state credits and subsidies, the monopolies assume certain commitments raised by the government bodies and that respond to the common interests of monopoly capital.

For the state sector, government programs are mandatory, but for monopolies they are only indicative, which allows them to obtain information on the amount and structure of state spending and investment, the current market movement and make decisions that they promise higher profits. By recommending some general objectives to monopolies, government programs leave a wide scope for private monopoly companies.

Economic development programs allow powerful monopolies to obtain, with the help of the State, even greater advantages: to use investments, the state statistical and forecasting service more effectively, not to allow the working class to participate in solving essential economic problems from the country.

The confrontation of the interests of the monopolies accentuates the spontaneous, disorderly character of development and the general instability of the capitalist economy. The socio-economic contradictions of the capitalist economy restrict the possibility of state regulation and programming at the societal level. Programming can exert some influence on the economic situation and on structural changes in production, but it does not save the capitalist economy from the crisis, recessions or a sudden slowdown in the growth rate. This is clearly shown by the economic crisis of 1974 – 1975 It enveloped all the fundamental centers of the world capitalist economy, further affecting the highly developed state monopoly economy.

Theory of the general welfare state

Theory widely propagated by bourgeois political economy about the so-called “transformation” of capitalism and its metamorphosis into a society in which the main features inherent in capitalism have lost their strength. According to this theory, in modern capitalism private property has given way to social property, classes have disappeared and, with them, class struggle, inequality of goods, exploitation of workers, economic crises, and The State, as an instrument of domination for the possessing minority, has become, they affirm, an “instrument of peace” and of “class unity”.

One of the ideological means of masking state monopoly capitalism is the proliferation, after World War II , in developed capitalist countries of the theory of the “general welfare state”. The capitalist reality has contested this theory that affirms that the State assumes responsibility for assuring all citizens a healthy and dignified standard of living and that through its budget it redistributes income in favor of the poor and, therefore, the call middle class becomes the ruling class of society . Thus the bourgeois state presents itself as a supraclassist that operates for the benefit of society as a whole, of all its classes, sectors and groups. In reality, it is the organ of class domination of the bourgeoisieand, first of all, of the monopolist. Therefore, its policy is also a class policy.

Under the pressure of the working class struggle, the bourgeois state is sometimes forced to make some concessions. But this does not change the main orientation, content or role of its policy. A large part of the means that the State collects from the population in the form of taxes goes to the monopoly safes and is used to pay for military orders, grant subsidies, etc. The chasm between wealthy capitalists and working poor is not narrowing, but widening. It is difficult to hide the blatant contrast between the income of millionaires and the wages of workers.

Since the state has always intervened, in one measure or another, in economic life, leftist revisionists argue that the regulation of the economy by the modern bourgeois state is not something new. With this approach, regardless of historical facts, the domination of monopoly capital and its growing union with the State is ignored, of what is new that the development of state monopoly capitalism contributes to the struggle of the working class of the developed capitalist countries against the domination of the monopoly bourgeoisie.

State redistribution of national income

A very important factor that ensures capitalist reproduction is the redistribution by the bourgeois state of part of the national income and the nationalization of financial resources. The State mobilizes the resources by collecting taxes and obtains them as credits by issuing state loans and banknotes through the issuing banks that belong to it or that are under its control, concentrating in its hands the savings of the population and social security funds.

The subsidies and credits that the State grants to monopolies considerably increase their financial resources. Inflation is used for the same purpose , stimulated in fact by the State, which allows the resources of the workers to be displaced, from the small and medium bourgeoisie to the hands of the monopoly capitalists.

The proportions of self-financing are also quite large, constituting 70 to 80 percent of total investments. Its fundamental part is carried out on account of the profits of the monopoly companies. But the possibility of having such a high level of self-financing is also largely a result of the economic policy of the bourgeois state. The monopolies obtain their own resources not only as a result of the exploitation of the workers, but also, from the redistribution by the State of the national income in favor of them, the collection of high taxes with which the workers are taxed and the perception, through the tax system, a part of the profits of small and medium entrepreneurs. The tax advantages granted by the State to monopolies to stimulate investment and the abolition of taxes on extraordinary profits, give them complementary income. In this sense, the state amortization policy plays an especially important role.

Militarization of the economy

A characteristic feature of state monopoly capitalism is the militarization of the economy and the arms race that have assumed immense proportions. The existence in peacetime of a war economy that is developing at full speed, and the enormous government orders for armaments that it implies, the expenses of maintaining the armed forces and creating strategic reserves are a typical phenomenon of contemporary imperialism. It is precisely the militarization of the economy that has turned the bourgeois state into a great consumer of goods and services.

In the main capitalist countries an industrial-military complex has formed, an alliance of the largest monopolies and the apex of the military apparatus. The State secures monopolies a new sphere of investment, finances monopoly corporations, supplies them with deficit raw materials, buys their merchandise at higher prices, etc. This is especially manifested during the military conflicts triggered by imperialism.

The military orders of the State are, in the first place, orders-contracts of enormous amounts that the governmental organs preferably agree with the main industrial-military corporations. Unlike the period before the Second World War, military orders are no longer sporadic, monopolies receive them continuously. Secondly, the State bears most of the risk posed by the eventual deterioration of the situation. Third, it agrees military contracts with large consortia, primarily through secret transactions, and not through public bidding, creating the most favorable conditions for the enrichment of a handful of military monopolies. In recent decades, NATO’s military spending have tripled.

The growth of militarization gives the development of the economy a multilateral and distorted character. Their expenses imply increases in the taxes with which the population is taxed; they make use of a large amount of labor and considerable economic resources in the military industry, which with a different social regime could be used for the benefit of the population; These resources could be used to meet the social needs of workers, help developing countries, overcome their economic backwardness and protect the environment.

Development in other directions

Monopoly state capitalism also develops in other directions. In granting subsidies and supporting neo-colonialism and the economic expansion of monopoly capital abroad.

State monopoly capitalism widely uses the State to subsidize and support its economic expansion abroad, which is favored by customs policy, the ease of payment of taxes granted to merchandise exporting companies, export awards, government guarantees. for investments in other countries, state capital exports to promote the shipment of merchandise by corporations, etc.

The monopolies of each country operate worldwide, relying on the State. International state monopoly integration is also developed, that is, interstate monopoly economic blocks are created.

The growth of state monopoly capitalism implies an increase in the role of the monopoly bosses in solving economic and political questions for the selfish benefit of monopoly capital. The personal union is consolidated, which has different forms: government officials occupy high positions in corporations; their representatives are in the leadership positions of the state apparatus. Government decisions are, as a general rule, made after their examination and approval in the organizations of the monopolists.

Monopoly gain

The production and appropriation of surplus value by capitalists is a fundamental economic law of capitalism in all phases of its development. In the era of imperialism , due to the transformation of monopolies into a dominant force, the action of this law acquires some peculiarities.

Its sources

The appropriate profit by monopolies includes not only the surplus value produced directly in the monopoly companies, but also:

The surplus of the surplus value created in the companies of the monopolies because the productivity of labor and, therefore, the degree of exploitation are higher in them than in non-monopoly companies.

The part of the value of labor power that the monopolies take from the workers by remunerating their work at a price lower than the value of the labor force and selling them consumer articles for amounts greater than the value and production price of these articles.

Part of the surplus value produced in non-monopoly companies, but appropriated by monopolies through the sphere of circulation by selling these companies their goods at high prices and buying their products at artificially discounted prices .

The value of the surplus product and of a part of the necessary product of the small producers of the city and the countryside that the monopolies seize through the sphere of circulation, selling these producers merchandise at high prices and buying their products at discounted prices . This concerns above all the value of the articles produced by the bulk of the peasants.

The surplus value created in the countries of application of capital exported by the monopolies and, specifically, the following types of it:

  1. a) The surplus valueproduced in the companies created by the monopolies in the countries of capital investment. Monopolies take full advantage of the fact that wagesin these countries are lower. And they are particularly very low in underdeveloped countries.
  2. b) A part of the capital gainproduced in companies belonging to local capitalists. Foreign monopolies often invest their capital in these companies, thus appropriating a part of the surplus valuecreated in them.
  3. c) The value of the surplus product and a part of the necessary product of the small producers of the capital investment country from which the foreign monopolies seize through the sphere of circulation through non-equivalent exchange.

In this way, the high monopoly profit accumulates all the forms of income obtained by the monopoly bourgeoisie due to its domination in the economy and the exploitation of the vast majority of the population of the imperialist and dependent countries in the economic sense.

In addition to obtaining the extraordinary profit of industry and other sectors of production, the monopoly bourgeoisie achieves this by carrying out different financial operations with fictitious capital. It is made up of the issuance and founders gain, appropriated by the monopolists in the issue of the securities, as well as speculative operations on the stock market. The monopoly bourgeoisie is enriched at the expense of both the exploitation of the working class and the non-proletarian sectors of workers in their country. This generates an antagonism not only between the monopoly bourgeoisie and the working class, but also between it and all workers. And it constitutes an objective basis for the formation of a broad antitrust front.

Monopoly prices

In the days of pre- monopoly capitalism , the law of surplus value manifested itself as the law of the average rate of profit . In the time of monopoly capitalism , this law acts, above all, as a law of monopoly extraordinary profit , which is related to the establishment of the monopoly price system in contemporary capitalism .

In pre-monopoly capitalism , the market prices of commodities, which fluctuated around the prices of production, were formed subject to the correlation between demand and supply under the influence of competition not restricted by anything.

In the current capitalist market there are prices of monopolies and prices are monopolists. The prices do not monopolists are those through which non – monopolistic companies sell their goods . These are typically articles produced in sectors with a relatively low degree of monopolization.

In the market price system of contemporary capitalism, monopoly prices predominate, which are divided into high monopoly prices and low monopoly prices. The former constitute the prices at which monopolies sell their goods. They are always higher than the prices of production and the value of the goods . Low monopoly prices are made up of the prices of goods that monopolies generally buy from small producers of goods. They are lower than the social value of the corresponding merchandise. The price of labor power is, as a general rule, a low monopoly price, since capitalists try to maintain wagesbelow the value of labor power . In the competitive struggle monopolies maneuver sometimes with prices as part of the difference between the prices high monopoly and prices low monopoly.

The monopoly price , being a concrete form of the market price in the sphere of monopoly domination, is substantially distinguished from the non-monopoly market price . Changes in non-monopoly price movement, although subject to monopoly influence, continue to depend in many ways on the correlation between demand and supply, which also influences monopoly prices. But monopolies, although with certain difficulties, can maintain high prices of their merchandise, even in conditions of decreasing demand; Corporations can impose low prices on the goods of non-monopoly entrepreneurs, and especially small producers, even as demand grows. The monopoly price is always a monetary expression of value, characterized by a long and stable deviation of the price of the merchandise from its value .

The State and monopoly prices

A new and important factor in price formation now means the economic policy of the State which influences prices in favor of monopolies with methods that have nothing to do with the market.

First, by enacting laws, the state sets the prices of many items and services with the participation of the interested monopolies themselves.

Second, an important factor in setting high monopoly prices is the placement of state orders. In this case, prices are not formed through market competition, but by agreement between the monopoly corporations and the corresponding government bodies. In these cases, the highest production costs of companies in the specific sector are usually taken as the basis for calculating prices . They are those companies in the non-monopoly sector, as well as those that, by belonging to monopoly companies, are relatively behind in their technical strength. Because monopolies have the lowest production costs, this pricing method ensures a high monopoly gain.

Thirdly, the State’s policy regarding exports and imports contributes to setting high prices for monopoly goods. The export of merchandise is one of the means of limiting its supply in the internal market. The State encourages the export of merchandise by paying export premiums, as well as special subsidies, when the merchandise is exported at prices lower than those prevailing in the internal market. At the same time, the State, applying a protectionist customs policy, tries to prevent the excessive growth of the supply of merchandise due to its influx from abroad. All this allows the monopolies of the corresponding sectors to maintain high prices in the internal market.

The State contributes to the fixing and maintenance not only of high monopoly prices , but also of low monopoly prices . In particular, the goods produced in state companies are sold to private corporations at artificially discounted prices , and the losses of their companies are covered by the state on account of the budget. It is a special, state form of low monopoly prices .

The establishment of high prices and low monopoly prices leads to the modification of the forms of manifestation of the law of value . Since monopolies can in some way impose prices , there is no free play in the market. Competition, although heightened, is not carried out on the same principles for monopolies, non-monopolized firms and small producers. The domination of monopolies hinders the migration of capital from one sector to another, prevents the influx of new capital to sectors where its influence is predominant.

This domination, although it undermines, does not suppress the system of relations of mercantile production that continues to function in a modified form; therefore, the law of value also remains in force . In particular, when productivity and labor intensity rise markedly in one sector or the other, the costs of production of the capitalists are reduced, which increases the monopoly profit.

In the process of competition between the different sectors, the transfer of capital to more profitable sectors occurs. The resistance of the monopolies that dominate in these sectors makes it difficult, but cannot prevent the influx of foreign capital.

Monopoly prices do not mean that the law of value stops working. The law of average profit, is a substantially modified form, also breaks through. But the class essence of all these processes is reduced to the fact that monopoly prices are an instrument in the hands of the monopolies to redistribute for their benefit the value that is created in society.

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