State Capitalism: Its Possibilities and Limitations

The term state capitalism (so runs the argument) is possibly misleading insofar as it could be understood to denote a society where in the state is the sole owner of all capital, and this is not necessarily meant by those who use it. Under a democratic form of state capitalism, the state has the same controlling functions but is itself controlled by the people. It is based on institutions which prevent the bureaucracy from transforming its administrative position into an instrument of power and thus laying the basis for transforming the democratic system into a totalitarian one. All technical means for efficient planning, including the expansion of production in accordance with consumer wants and the most advanced technical possibilities, and taking into account the cost in public health, personal risks, unemployment—all these technical means are available today. Government-controlled foreign trade and development of an industry for ersatz materials may overcome the limitations of a too narrow basis of raw materials.