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State socialism is a political and economic ideology within the Socialism that advocates state ownership of the means of production. This is intended either as a temporary measure, or as a characteristic of socialism in the transition from the capitalist to the socialist mode of production or to a communist society. State socialism was first theorised by Ferdinand Lassalle. It advocates a planned economy controlled by the state in which all industries and Natural resource are state owned.Tucker, Benjamin (1985) 1886. State Socialism and Anarchism and Other Essays: Including the Attitude of Anarchism Toward Industrial Combinations and Why I Am an Anarchist (1st ed.). Colorado Springs: Ralph Myles Publisher. .
Aside from anarchists and other libertarian socialists, there was, in the past, confidence amongst socialists in the concept of state socialism as being the most effective form of socialism. Some early social democrats in the late 19th century and early 20th century, such as the Fabians, claimed that British society was already mostly socialist and that the economy was significantly socialist through government-run enterprises created by conservative and liberal governments which could be run for the interests of the people through their representatives' influence, an argument reinvoked by some socialists in post-war Britain.Eatwell, Roger; Wright, Anthony (1999). Contemporary Political Ideologies (2nd ed.). London: Continuum. pp. 87–88 . State socialism declined starting in the 1970s, with stagflation during the 1970s energy crisis,Gey, Peter; Kosta, H. G. Jiří; Quaisser, Wolfgang (1987). Crisis and Reform in Socialist Economies. Avalon Publishing. .Miller, Toby (2008). A Companion to Cultural Studies. Wiley. .Ehns, Dirk H. (2016). Modern Monetary Theory and European Macroeconomics. Routledge. pp. 4–5. . the rise of neoliberalism and later with the fall of state socialist nations in the Eastern Bloc during the Revolutions of 1989 and the fall of the Soviet Union.Eatwell, Roger; Wright, Anthony (1999). Contemporary Political Ideologies (2nd ed.). London: Continuum. pp. 93–95. .
Libertarian socialists often treat state socialism as synonymous with state capitalism, arguing that the economic systems of Marxist–Leninist states such as the Soviet Union were not genuinely socialist due to their continued use of commodity production, and wages as remuneration. Democratic and libertarian socialists claim that these states had only a limited number of socialist characteristics.Howard, M. C.; King, J. E. (2001). "'State Capitalism' in the Soviet Union". Retrieved 27 December 2019.Chomsky, Noam (1986). "The Soviet Union Versus Socialism". Our Generation. Chomsky.info. Retrieved 20 October 2015.Wolff, Richard D. (27 June 2015). "Socialism Means Abolishing the Distinction Between Bosses and Employees". Truthout. Retrieved 9 July 2015. However, others maintain that workers in the Soviet Union and other Marxist–Leninist states had genuine control over the means of production through institutions such as trade unions. Academics, political commentators and other scholars tend to distinguish between authoritarian state socialism and democratic state socialism, with the first representing the Soviet Bloc and the latter representing Western Bloc countries which have been democratically governed by socialist parties such as Britain, France, Sweden and Western social-democracies in general, among others.Barrett, William, ed. (1 April 1978). "Capitalism, Socialism, and Democracy: A Symposium". Commentary. Retrieved 14 June 2020. "If we were to extend the definition of socialism to include Labor Britain or socialist Sweden, there would be no difficulty in refuting the connection between capitalism and democracy."Heilbroner, Robert L. (Winter 1991). "From Sweden to Socialism: A Small Symposium on Big Questions". Dissident. Barkan, Joanne; Brand, Horst; Cohen, Mitchell; Coser, Lewis; Denitch, Bogdan; Fehèr, Ferenc; Heller, Agnès; Horvat, Branko; Tyler, Gus. pp. 96–110. Retrieved 17 April 2020.Kendall, Diana (2011). Sociology in Our Time: The Essentials. Cengage Learning. pp. 125–127. . "Sweden, Great Britain, and France have mixed economies, sometimes referred to as democratic socialism—an economic and political system that combines private ownership of some of the means of production, governmental distribution of some essential goods and services, and free elections. For example, government ownership in Sweden is limited primarily to railroads, mineral resources, a public bank, and liquor and tobacco operations."Li, He (2015). Political Thought and China's Transformation: Ideas Shaping Reform in Post-Mao China. Springer. pp. 60–69. . "The scholars in camp of democratic socialism believe that China should draw on the Sweden experience, which is suitable not only for the West but also for China. In the post-Mao China, the Chinese intellectuals are confronted with a variety of models. The liberals favor the American model and share the view that the Soviet model has become archaic and should be totally abandoned. Meanwhile, democratic socialism in Sweden provided an alternative model. Its sustained economic development and extensive welfare programs fascinated many. Numerous scholars within the democratic socialist camp argue that China should model itself politically and economically on Sweden, which is viewed as more genuinely socialist than China. There is a growing consensus among them that in the Nordic countries the welfare state has been extraordinarily successful in eliminating poverty."
As a classification within the socialist movement, state socialism is held in contrast with libertarian socialism, which rejects the view that socialism can be constructed using existing state institutions or governmental policies. By contrast, proponents of state socialism claim that the state—through practical governing considerations—must play at least a temporary part in building socialism. It is possible to conceive of a Democracy socialist state that owns the means of production and is internally organised in a participatory, cooperative fashion, thereby achieving both social ownership of productive property and workplace democracy. Today, state socialism is mainly advocated by Marxist–Leninists.Pena, David S. (21 September 2007). "Tasks of Working-Class Governments under the Socialist-oriented Market Economy". Political Affairs. . Retrieved 8 February 2020.
Early concepts of state socialism were articulated by Anarchism and Libertarianism philosophers who opposed the concept of the state. In Statism and Anarchy, Mikhail Bakunin identified a Statism tendency within the Marxist movement, which he contrasted to libertarian socialism and attributed to Marx's philosophy. Bakunin predicted that Marx's theory of the transition from capitalism to socialism involving the working class seizing state power in a dictatorship of the proletariat would eventually lead to a usurpation of power by the state apparatus acting in its self-interest, ushering in a new form of capitalism rather than establishing socialism.Bakunin, Mikhail (1873). "Statism and Anarchy". Marxists.org. Retrieved 27 December 2019. "The theory of statism as well as that of so-called 'revolutionary dictatorship' is based on the idea that a 'privileged elite,' consisting of those scientists and 'doctrinaire revolutionists' who believe that 'theory is prior to social experience,' should impose their preconceived scheme of social organization on the people. The dictatorial power of this learned minority is concealed by the fiction of a pseudo-representative government which presumes to express the will of the people".
As a political ideology, state socialism rose to prominence during the 20th century Bolshevik, Leninist, and later Marxist–Leninist revolutions, where single-party control over the state and, by extension, over the political and economic spheres of society was justified as a means to safeguard the revolution against counter-revolutionary insurrection and foreign invasion. The Stalinist theory of socialism in one country was an attempt to legitimise state-directed activity to accelerate the industrialisation of the Soviet Union.
The modern concept of state socialism, when used in reference to Soviet-style economic and political systems, emerged from a deviation in Marxist theory starting with Vladimir Lenin. In Marxist theory, socialism is projected to emerge in the most developed capitalist economies, where capitalism suffers the greatest internal contradictions and class conflict. On the other hand, state socialism became a revolutionary theory for the world's poorest, often quasi-feudal, countries. (2025). 9781412959636, SAGE Publications. ISBN 9781412959636
In such systems, the state apparatus is used as an instrument of capital accumulation, forcibly extracting surplus from the working class and peasantry to modernise and industrialise poor countries. Such systems are described as state capitalism because the state engages in capital accumulation, primarily as part of the primitive accumulation of capital (see also the Soviet theory of primitive socialist accumulation). The difference is that the state acts as a public entity and engages in this activity to achieve socialism by re-investing the accumulated capital into society, whether in more healthcare, education, employment or consumer goods. In contrast, in capitalist societies, the surplus from the working class is spent on whatever needs the owners of the means of production want. (2025). 9781412959636, SAGE Publications. ISBN 9781412959636
In the traditional view of socialism, thinkers such as Friedrich Engels and Henri de Saint-Simon took the position that the state will change in nature in a socialist society, with the function of the state changing from one of political rule over people into a scientific administration of the processes of production. Specifically, the state would become a coordinating economic entity consisting of interdependent inclusive associations rather than a mechanism of class and political control, ceasing to be a state in the traditional definition. "Henri de Saint-Simon". Encyclopædia Britannica Online. Retrieved 27 December 2019. "Socialism". Encyclopædia Britannica Online. Retrieved 27 December 2019.
Preceding the Bolshevik-led revolution in Russia, many socialist groups such as anarchists, orthodox Marxist currents such as council communism and the Mensheviks, Reformism and other democratic and libertarian socialists criticized the idea of using the state to conduct central planning and nationalization of the means of production as a way to establish socialism.
The British Fabian Society included proponents of state socialism, such as Sidney Webb. George Bernard Shaw referred to Fabians as "all Social Democrats, with a common confiction of the necessity of vesting the organization of industry and the material of production in a State identified with the whole people by complete Democracy".Britain, Ian (2005) 1982. Fabianism and Culture: A Study in British Socialism and the Arts, c. 1884–1918. Cambridge University Press. p. 14. . Nonetheless, Shaw also published the Report on Fabian Policy (1896), declaring: "The Fabian Society does not suggest that the State should monopolize industry as against private enterprise or individual initiative".Blaazer, David (2002) 1992. The Popular Front and the Progressive Tradition: Socialists, Liberals, and the Quest for Unity, 1884–1939. Cambridge University Press. pp. 59–60. . Robert Blatchford, a member of the Fabian Society and the Independent Labour Party, wrote the work Merrie England (1894) that endorsed municipal socialism.McBriar, A. M. (1962). Fabian Socialism and English Politics: 1884–1918. Cambridge University Press. p. 296. In Merrie England, Blatchford distinguished two types of socialism, namely ideal socialism and practical socialism. Blatchford's practical socialism was a state socialism that identified existing state enterprises such as the Post Office run by the municipalities as a demonstration of practical socialism in action while claiming that practical socialism should involve the extension of state enterprise to the means of production as the common property of the people. Although endorsing state socialism, Blatchford's Merrie England and his other writings were nonetheless influenced by anarcho-communist William Morris—as Blatchford himself attested to—and Morris' anarcho-communist themes are present in Merrie England.Thompson, Noel (2006). Political Economy and the Labour Party: The Economics of Democratic Socialism, 1884–2005 (2nd ed.). Abingdon, England: Routledge. p. 21. .
Democratic socialists argue for a gradual, peaceful transition from capitalism to socialism. They wish to neutralize or abolish capitalism through political reform rather than revolution. This method of gradualism implies the utilization of the existing state apparatus and machinery of government to move society toward socialism. Other socialists sometimes deride it as a form of socialism from above or political elitism for relying on electoral means to achieve socialism.Draper, Hal (1963). "The Two Souls of Socialism". "Ferdinand Lassalle is the prototype of the state-socialist -- which means, one who aims to get socialism handed down by the existing state". In contrast, Marxism and revolutionary socialism holds that a proletarian revolution is the only practical way to implement fundamental changes in the structure of society. Socialists who advocate representative democracy believe that after a certain period under socialism, the state will "wither away" because class distinctions cease to exist. Representative democracy will be replaced by direct democracy in the remaining public associations comprising the former state. Political power would be decentralized and distributed evenly among the population, producing a communist society.
In 1888, the individualist anarchist Benjamin Tucker, who proclaimed himself to be an anarchistic socialist in opposition to state socialism, included the full text of a "Socialistic Letter" by Ernest Lesigne in his essay "State Socialism and Anarchism".Tucker, Benjamin (1911) 1888. State Socialism and Anarchism: How Far They Agree and Wherein They Differ. Fifield. According to Lesigne, there are two socialisms: "One is dictatorial, the other libertarian".Lesigne (1887). "Socialistic Letters" . Le Radical. Retrieved 20 June 2020. Tucker's two socialisms were state socialism which he associated with the Marxist school, and the libertarian socialism he advocated. Tucker noted that "the fact that State Socialism has overshadowed other forms of Socialism gives it no right to a monopoly of the Socialistic idea".Tucker, Benjamin (1893). Instead of a Book by a Man Too Busy to Write One. pp. 363–364. According to Tucker, those two schools of socialism had in common the labour theory of value and the ends by which anarchism pursued different means.Brown, Susan Love (1997). "The Free Market as Salvation from Government". In Carrier, James G., ed. Meanings of the Market: The Free Market in Western Culture. Berg Publishers. p. 107. .
Because of this development, classical and orthodox Marxists and Trotskyist groups denounced the communist states as Stalinist and their economies as state capitalist or representing deformed or degenerated workers' states, respectively. Within the socialist movement, there is criticism towards the use of the term socialist states in relation to countries such as China and previously of the Soviet Union and Eastern and Central European states before what some term the "collapse of Stalinism" in 1989.Committee for a Workers' International (June 1992). "The Collapse of Stalinism". Marxist.net. Retrieved 4 November 2019.Grant, Ted (1996). "The Collapse of Stalinism and the Class Nature of the Russian State". Marxists Internet Archive. Retrieved 4 November 2019.Arnove, Anthony (Winter 2000). "The Fall of Stalinism: Ten Years On" . International Socialist Review. 10. Retrieved 4 November 2019.Daum, Walter (Fall 2002). "Theories of Stalinism's Collapse". Proletarian Revolution. 65. Retrieved 4 November 2019.
Trotskyism argues that the leadership of the communist states was corrupt and that it abandoned Marxism in all but name. In particular, some Trotskyist schools call those countries degenerated workers' states to contrast them with proper socialism (i.e. workers' states), while other Marxists and some Trotskyist schools call them state capitalist to emphasize the lack of genuine socialism and the presence of defining capitalist characteristics (wage labour, commodity production and bureaucratic control over workers).
Bismarck made the following statement as a justification for his social welfare programs: "Whoever has pensions for his old age is far more easier to handle than one who has no such prospect. Look at the difference between a private servant in the chancellery or at court; the latter will put up with much more, because he has a pension to look forward to".Taylor, A. J. P. (1955). Bismarck. The Man and the Statesman. London: Hamish Hamilton. p. 203.
This did not prevent the Social Democrats from becoming the biggest party in parliament by 1912. According to historian Jonathan Steinberg, "all told, Bismarck's system was a massive success—except in one respect. His goal to keep the Social Democratic Party out of power utterly failed. The vote for the Social Democratic Party went up and by 1912 they were the biggest party in the Reichstag".Boissoneault, Lorraine (14 July 2017). "Bismarck Tried to End Socialism's Grip—By Offering Government Healthcare". Smithsonian. Retrieved 30 January 2020.
Classical and orthodox Marxists also view state socialism as an oxymoron, arguing that while an association for managing production and economic affairs would exist in socialism, it would no longer be a state in the Marxist definition based on domination by one class. Preceding the Bolshevik-led revolution in Russia, many socialist groups—including reformists, orthodox Marxist currents such as council communism and the Mensheviks, as well as anarchists and other libertarian socialists—criticized the idea of using the state to conduct planning and nationalization of the means of production as a way to establish socialism. Lenin himself acknowledged his policies as state capitalism.Lenin, Vladimir (1917). The State and Revolution. "Chapter 5". Marxists Internet Archive. Retrieved 8 February 2020.Lenin, Vladimir (February—July 1918). Lenin Collected Works Vol. 27. Marxists Internet Archive. p. 293. Quoted by Aufheben. .Lenin, Vladimir (1921). "The Tax in Kind". Marxists Internet Archive. Retrieved 8 February 2020.
Some Trotskyists following Tony Cliff deny it is socialism, calling it state capitalism.Cliff, Tony (1948). "The Theory of Bureaucratic Collectivism: A Critique". Marxists Internet Archive. Retrieved 8 February 2020. Other Trotskyists agree that these states could not be described as socialistMandel, Ernest (1979). "Why The Soviet Bureaucracy is not a New Ruling Class". Ernest Mandel Internet Archive. Retrieved 8 February 2020. but deny that they were state capitalist.Taaffe, Peter (1995). The Rise of Militant. "Preface". "Trotsky and the Collapse of Stalinism". Bertrams. "The Soviet bureaucracy and Western capitalism rested on mutually antagonistic social systems". . They support Leon Trotsky's analysis of the pre-restoration Soviet Union as a workers' state that had degenerated into a bureaucratic dictatorship which rested on a largely nationalized industry run according to a production planTrotsky, Leon (1936). The Revolution Betrayed. Marxists Internet Archive. Retrieved 11 November 2019.Trotsky, Leon (1938). "The USSR and Problems of the Transitional Epoch". In The Transitional Program. Marxists Internet Archive. Retrieved 11 November 2019. "The ABC of Materialist Dialectics". From "A Petty-Bourgeois Opposition in the Socialist Workers Party" (1939). Marxists Internet Archive. In Trotsky, Leon (1942). In Defense of Marxism. Retrieved 8 February 2020. and claimed that the former Stalinist states of Central and Eastern Europe were deformed workers' states based on the same relations of production as the Soviet Union.Pierre Frank (November 1951). "Evolution of Eastern Europe". Fourth International. Marxists Internet Archive. Retrieved 11 November 2019. Some Trotskyists, such as the Committee for a Workers' International, have sometimes included African, Asian and Middle Eastern constitutional socialist states when they have had a nationalized economy as deformed workers' states.Grant, Ted (1978). "The Colonial Revolution and the Deformed Workers' States". The Unbroken Thread. Retrieved 21 June 2020.Jayasuriya, Siritunga. "About Us". United Socialist Party. Retrieved 21 June 2020. Other socialists argued that the neo-Ba'athists promoted capitalists from within the party and outside their countries.Walsh, Lynn (1991). Imperialism and the Gulf War. "Chapter 5". Socialist Alternative. Retrieved 21 June 2020.
Those socialists who oppose any system of state control believe in a more decentralized approach which puts the means of production directly into the hands of the workers rather than indirectly through state bureaucracies which they claim represent a new elite or New class.Milovan Đilas (1983). 015665489X, Harcourt Brace Jovanovich. 015665489X This leads them to consider state socialism a form of state capitalismBordiga, Amadeo (1952). "Dialogue With Stalin". Marxists Internet Archive. Retrieved 11 November 2019. (an economy based on centralized management, capital accumulation and wage labour, but with the state owning the means of production) which Engels stated would be the final form of capitalism rather than socialism.Engels, Friedrich (1880). . "III: Historical Materialism". Marxists Internet Archive. Retrieved 8 February 2020. Furthermore, nationalization and state ownership have nothing to do with socialism by itself, having been historically carried out for various purposes under various political and economic systems..
State socialism is often referred to by right-wing detractors simply as socialism, including Austrian School economists such as Friedrich HayekHayek, Friedrich (1944). The Road to Serfdom. Routledge Press. . . and Ludwig von Mises,Von Mises, Ludwig (1936) 1922. . London: Jonathan Cape. .Von Mises, Ludwig; Raico, Ralph, trans.; Goddard, Arthur, ed. (1962) 1927. . Princeton, D. Van Nostrand. . who used socialism as a synonym for central planning and state socialism.Block, Walter (15 January 2013). "Was Milton Friedman A Socialist? Yes". MEST Journal. 1 (1): 11–26. . "In section 2 of this paper we base our analysis on the assumption that socialism is defined in terms of governmental ownership of the means of production. ... The most technical and perhaps the most accurate definition of this concept is, Government ownership of all of the means of production, e.g., capital goods." ... Socialism may be broken down into its voluntary and coercive strands. In the former case, there are the nunnery, convent, kibbutz, commune, collective, syndicalist, cooperatives, monastery, abbey, priory, friary, religious community; in the latter, the economies of socialist countries such as Cuba, North Korea, the USSR, Nazi Germany, etc. We will use the word 'socialism' in the latter understanding throughout this paper. ... The Nazi socialist government was not extreme in its explicit ownership of the means of production. But that version of socialism, that is, fascism, was earmarked by implicit state ownership, or control, of capital goods." This is notable in the United States, where socialism is a pejorative term to mean state socialism used by members of the political right to stop the implementation of liberal and progressive policies and proposals and to criticize the public figures trying to implement them. One criticism primarily related to state socialism is the economic calculation problem,Hayek, Friedrich (1935). "The Nature and History of the Problem". "The Present State of the Debate". Collectivist Economic Planning. pp. 1–40, 201–243. followed by the socialist calculation debate.Durlauf, Steven N.; Blume, Lawrence E., ed. (1987). The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. .Biddle, Jeff; Samuels, Warren; Davis, John (2006). A Companion to the History of Economic Thought, Wiley-Blackwell. p. 319. "What became known as the socialist calculation debate started when von Mises (1935 1920) launched a critique of socialism".Levy, David M.; Peart, Sandra J. (2008). "Socialist calculation debate". The New Palgrave Dictionary of Economics (2nd ed.). Palgrave Macmillan. .
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