What is State Socialism?
Under state socialism, the government takes the place of private owners. Ministries and planning bodies decide what factories and farms should produce, how much to invest and what prices and wages should be. Supporters think this ends exploitation by private owners, gives everyone work and basic needs, and lets a poor country industrialise fast. The label has two meanings. In the 1800s it described thinkers who wanted the existing state to take over industry and help workers. In the 1900s it usually means the planned economies of the Soviet Union and the states that copied it, nearly all of which were also one-party states.
Core beliefs
- Major industries, banks and natural resources should belong to the state.
- A plan, not prices set by supply and demand, should direct the economy.
- Everyone should have a job, a home, schooling and medical care.
- Private profit from owning capital should be ended or tightly restricted.
- The state can drive fast growth and technical progress.
- Economic equality matters more than market freedom.
History
Early thinkers included Louis Blanc in France, who in the 1840s called for state-backed workshops, and Karl Rodbertus. In Germany, Ferdinand Lassalle urged workers in the 1860s to use the state to build cooperatives. Critics in the 1880s also used the phrase for the social insurance laws of Bismarck's Germany. The British Fabians Sidney and Beatrice Webb wanted public ownership through gradual, lawful steps. The Russian Revolution of 1917 led to the nationalisation of industry, and the first Five-Year Plan began in 1928. After the Second World War the model spread to Eastern Europe, China, North Korea, Cuba and Vietnam. Most of the European ones collapsed between 1989 and 1991, and China began market reforms in 1978.
Variants
Fabian and democratic versions sought to expand public ownership through elected parliaments. Soviet-style systems joined central planning to rule by a single party, and are often labelled Marxist-Leninist. Some newly independent countries in Africa and the Arab world after 1945 built large state sectors and called it national or Arab socialism. Later reformers added market prices and private plots, producing hybrids that are sometimes called market socialism.
Criticisms
Ludwig von Mises and Friedrich Hayek argued that planners cannot know enough to price goods well, so shortages and waste follow. Liberals warn that when the state owns everything, no independent power is left to check it. Libertarian socialists and anarchists such as Mikhail Bakunin predicted that state ownership would produce a new ruling class of officials. Historians record famines and political repression in several planned economies, including the Soviet famine of the early 1930s and China's Great Leap Forward. Defenders note rapid industrial growth and gains in literacy and health care in some of these states.
In practice
The Soviet Union used central planning from the late 1920s to its end in 1991. Eastern Europe followed until 1989 to 1991. China ran a planned economy before 1978. Cuba and North Korea still keep large planned sectors. Even in mixed economies, state ownership of railways, power or banks owed something to these ideas. On the 12 axes the model scores very strongly toward Public on Ownership and Planned on Markets, with a lean toward Strong leader and Order on the civil axes because most such states had one party.