Abstract
Keywords
Introduction
Recent transformations in the global economy have sparked renewed interest in the role of the state in capital accumulation. Such transformations include a ‘return’ to various forms of state-led development across the global South since the early 2000s (in China, Russia and other large emerging economies), extensive state intervention following the 2008 global financial crisis in the global North and the multiplication of various forms of ‘state–capital hybrids’ such as sovereign wealth funds (SWFs) and state-owned enterprises (SOEs). For instance, the number of SWFs increased from 50 to 92 between 2005 and 2017, while assets under management grew to over $7.5 trillion, which is more than hedge funds and private equity firms combined (Preqin, 2018). According to figures quoted in Bruton et al. (2015: 92), ‘SOEs generate approximately one tenth of world gross domestic product (GDP) and represent approximately 20% of global equity market value’. SOEs now dwarf even the largest privately-owned transnational corporations, with PetroChina currently leading the list with a market value of more than $1 trillion. Three of the top five companies in the 2018 Fortune Global 500 are Chinese SOEs (State Grid, Sinopec Group and China National Petroleum Corp). Significantly, these state–capital hybrids have also become increasingly integrated into transnational circuits of capital, including global networks of production, trade, finance, infrastructure and corporate ownership. Does this renewed state activism – and its remarkably outward orientation – indicate a changing role of the state in capital accumulation and the emergence of new political geographies of capital?
For many commentators, this polymorphism of state intervention signals the resurgence of ‘state capitalism’ under a
This raises three sets of questions. First, what do commentators
While this proliferation of competing definitions and loose conceptualizations is not necessarily problematic, it nonetheless warrants a heightened level of reflexive scrutiny. In particular, we contend that it raises the fundamental issue of the concept’s analytical value (i.e. describes much, but explains nothing). We argue that the loose, if not imprecise, conceptualizations of the category have allowed it to become some sort of ‘banner to unite under’ for a number of commentators with extremely different theoretical outlooks, methods and objects of inquiry. As such, it has opened the
However, we do not argue that the concept of state capitalism should be discarded. Rather, we wager that its analytical value
In the first part of the article, we critically review the key arguments made in three bodies of literature: strategic management and corporate governance (‘Managing state capitalism’ section), comparative capitalism (CC) (‘State (comparative) capitalism’ section) and global political economy (GPE) (‘State capital in the GPE’ section). Our survey is necessarily limited such that we risk providing schematic and simplified accounts of the distinctive features and nuances within these bodies of literature. Nonetheless, we aim to reveal their underlying set of assumptions, common principles, theoretical underpinnings, as well as points of disagreement. In the ‘Pushing the limits’ section, we explore the limits to state capitalism as a research agenda, emphasizing the blind spots, tensions and questions left unanswered by the literature. We conclude by discussing future research directions.
Managing state capitalism
In the strategic management and comparative corporate governance literature, or simply management, state capitalism is seen as a particular
What is fundamentally new about those models is that ‘since the late 20th century … [state versus private] ownership boundaries are not fixed’ (Peng et al., 2016: 298). SOEs have become ‘hybrid organizations’ (Bruton et al., 2015), where states own majority or minority equity positions in firms, or what has been termed ‘partial state ownership’ (Inoue et al., 2013). Moreover, various ‘marketized’ forms of state ownership and control (Li et al., 2017) have gained in importance, such as state-owned holding companies, SWFs, state-controlled pension funds and life insurance funds, national development banks, the provision of strategic support to private firms using subsidized credit and/or other forms of support and protection to stimulate new firm capabilities and upgrading and the facilitation of merger and acquisitions in strategic sectors. In short, the ‘new form’ of state capitalism is characterized by ‘market orientation’ and by ‘increasing globalization’ (Grosman et al., 2016: 202). Management scholars suggest that those various forms of state-controlled and state-directed capital deserve attention because they are ‘thriving’ not only in their home countries but also in the global economy, where they are ‘taking centre stage’ (Musacchio et al., 2015).
Indeed, one of the main concerns of this literature is to explain ‘the
The second main research puzzle is to explain how SOEs are performing at least equal to, if not better than private companies. Again, what must be emphasized is that the conventional management literature on SOEs predicts that the latter will, as Musacchio et al. (2015: 116) remark, ‘underperform their private counterparts
Importantly, this is also what frames the interest of the management literature in diversity/variety. The literature is concerned with three types of diversity: (1) various forms of state ownership/control (or what is sometimes termed ‘organizational diversity’), (2) different outcomes in terms of firm performance, strategy, and organizational effectiveness, and (3) different country-level institutional arrangements. Although it is important to underline that, in contrast with the CC literature examined in the next section, country-level institutional diversity is only examined inasmuch as it affects the previous two types of diversity. For instance, Musacchio et al. (2015: 116) seek to ‘identify the institutional conditions that will affect the performance of each type of state capitalism’; Bruton et al. (2015) examine how (national) institutions affect the systems of governance, and hence the incentives that board members and executives face and Meyer and Peng (2016: 6) argue that ‘[w]ith respect to state ownership, differences in political systems translate into substantive differences in the objectives, governance structures, and top management team composition in SOEs’. The cognate field of international business follows a similar approach: it is concerned with ‘how organizational diversity of emerging economy SOEs derived from macro-institutional reforms [encompassing administrative and fiscal decentralization, privatization, market liberalization, and industrial restructuring] can extensively impact their overseas venturing strategies’ (Li et al., 2014: 998).
Overall, this literature is concerned with how variegated institutional change is ‘a driving component of SOE strategy [encompassing institutional logics and strategic objectives, capabilities and patterns of resource allocation, and internal organizational dynamics and structures] in emerging economies’ (Li et al., 2014). It explains diversity as follows: institutional variety at national and local level leads to organizational diversity of SOEs at field-level, which in turn leads to differing firm-level strategies (for instance, in terms of overseas investment). Moreover, while this literature provides excellent ‘thick’ descriptions of the evolution and path-dependency of state control in particular countries, it is little concerned with theorizing the reinvention of state capital, its nature, and the extent of its diversity beyond firm-level and across national contexts.
A critical assessment
These debates in the management literature, particularly the most recent, have made important contributions to the study of state capitalism inasmuch as (1) they provide a nuanced framework to analyse the various forms of state capital beyond the usual polarized view of state versus private ownership; (2) they challenge the stereotypical view (prevalent in the wider management discipline) that the performance of SOEs is tendentially bad; and (3) they draw attention to the role of country-level institutional diversity in the emergence of various forms of state capital and different strategic, performance and organizational outcomes at the firm-level. Nevertheless, we argue that the literature has at least three limitations.
First, it under-theorizes the relationship between the state and SOEs. It tends to take for granted that the influence of state bureaucrats and politicians is a source of ‘dysfunctional political interference’ in state-controlled firms. This ontological view, and the broader normative stance about the public–private divide in which it is grounded (the public as a source of interference, the private as a source of economic efficiency), is extremely problematic, because it does not leave room (if any) for scenarios where firms are efficient in economic terms and simultaneously perform functions that further the strategic interests of state actors. It also precludes considerations of (geo)economic and (geo)political strategies that involve both private and public actors.
Second, the literature tends to conceive of the scope and motives for state action in narrow terms. For instance, Musacchio and Lazzarini (2014: chapter 3) explain in their influential account that they firmly ground their arguments about state capitalism in three fundamental logics for state intervention: fixing market failures, providing social goods and industrial policy. While this is of course a perfectly legitimate theoretical decision, this is nonetheless a restricted understanding of state capitalism. Those three logics, as important as they are, only cover a fraction of the multifaceted role of the state in accumulation. Reducing the polymorphism of state intervention to those three logics leaves the strategic management literature inadequately equipped to grasp a great deal of phenomena deeply entangled with state capitalism, many of which will be further commented upon below, such as the role of state capitalism in re-configuring economic and political sovereignty, in negotiating neoliberalization, financialization, and globalization, or in mediating geopolitical competition between different states.
The third limitation is the claim of novelty. As Musacchio et al. (2015: 115, emphasis added) argue, governments around the world have transformed the well-known model of state capitalism by which they owned and managed wholly-owned state-owned enterprises (SOEs) … into
Similarly, it is unclear what exactly is novel about the strategic capabilities that state-controlled capital strives to develop. In their discussions of such capabilities, Musacchio et al. (2015) actually refer to upgrading, diversification, national champion policy, innovation policy, investment in research and education, and infrastructure provision. Those were all, as the authors acknowledge, key objectives of industrial policy in the paradigmatic case of the East Asian developmental state. If new governance and organizational forms have indeed emerged, such as the listing of large SOEs on stock exchanges, the professionalization of their management, the adding of boards of directors with independent members and a certain budgetary autonomy (Musacchio and Lazzarini, 2014: 48), we remain unconvinced that this is sufficient ground to claim that a new form of state capitalism has appeared. Has this translated into a change in the
Finally, by primarily locating state capitalism in emerging and transition economies phenomenon, the literature paints an incomplete (if not misleading) picture about the geographies of state capitalism: as Babic et al. (2017: 35) note, ‘the TSOE [transnational state-owned enterprises] phenomenon clearly goes beyond emerging markets and is prevalent in the industrialized West as well’, such as in France, Germany and Japan. Similarly, Haberly and Wójcik (2017: 252) argue that the ‘state capitalist [corporate ownership] network sprawl, has increasingly spread beyond commodity exporters and developing countries, to larger developed countries with historically strong interventionist streaks.’
State (comparative) capitalism
In early variants of CC scholarship, the state’s role was given limited analytical treatment and taken for granted, save for some specific variants. For instance, Whitley (2000) identifies a ‘state-organized business system’, while Schmidt (2002) argued that ‘state capitalism’, epitomized by French
To correct this myopia, a number of CC scholars strive to identify and outline the institutional contours of
For instance, Walter and Zhang (2012) identify a state-led variety of capitalism in Asia, in which they include China and Malaysia, featuring strong state intervention (large industrial output produced by SOEs, large government investment) and tight state control of business and labour organizations. The typology of Asian business systems proposed by Witt and Redding (2013), though ultimately rejecting the validity of a state-led capitalist variety (more on this below), also includes a categorization of the state in the countries studied (following the four ideal types previously mentioned). Carney and Witt (2014) offer yet another typology of Asian business systems, in which a state-led version of capitalism mixes both predatory and developmental state elements, and includes countries such as Malaysia, Thailand, China, India (the more developmental ones), and Vietnam, the Philippines, Laos, Indonesia (the more predatory ones). Using a similar typology, Fainshmidt et al. (2018: 316) claim the state takes an active and direct role in the economic ordering of society. In these systems, political networks often serve as the mechanism thorough which economic activity is coordinated. These networks tend to monopolize and sustain power, introducing predatory elements to the state.
While many of the abovementioned studies (and much of the CC literature) are mostly concerned with comparing country-level institutional diversity in a static manner (often using modelling and cluster analysis), a number of studies consider how various institutional forms of strong state intervention have changed over time. For example, Zhang and Whitley (2013) look at how patterns of institutional change and economic governance arrangements have evolved in varieties of East Asian capitalism between the 1980s and the 1990s–2000s. They argue that Japan, Taiwan, Thailand, and Malaysia faced common ‘external pressures’ (growing global capital and product market integration and intensifying political pressures from Western governments and multinational institutions) which contributed to ‘[eroding] direct state intervention in the economy and weakened state-controlled institutions through which economic activity was governed’ (2013: 322). Nevertheless, those common pressures did not shape institutional change evenly across East Asian economies. This is because those pressures were mediated by, ‘the interest and power configuration of dominant coalitions, particularly the number and variety of different socio-economic actors represented in the coalition, such as big business in different sectors, SMEs, landlords, farmers and labor’ (Zhang and Whitley, 2013: 323). According to Zhang and Whitley, of the two East Asian economies considered state-led in the 1980s (Malaysia and Taiwan), only Malaysia remained so in the 2000s (Taiwan became a ‘co-governed’ variety of capitalism, characterized by reduced state intervention). This is an important argument to explain the
Finally, an influential strand of CC research that draws upon international political economy and international business, proposes to characterize state capitalism explicitly in terms of
What distinguishes ‘state capitalism 3.0’ from ‘previous waves of state capitalism’ is that ‘third-generation late developers’ are not coherently directed by a central planning body, and they use sophisticated policies not simply to shield themselves from global competition in a protectionist fashion but to improve their relative position in the world economy (McNally, 2012: 755; Nölke, 2014: 89). As we further discuss below (in ‘Pushing the limits’ section), this is an important argument in terms of placing state capitalism within dynamics of
A critical assessment
The renewal of interest within the CC scholarship in the role of the state in (re)producing capitalist institutional diversity is welcome. This literature has contributed significantly to the study of state capitalism in three ways. First, it demonstrates that various state institutions and modalities of intervention shape and are shaped by national variants of capitalism. Second, it highlights the importance of examining state–business relations and (formal and informal) networks in the study of state capitalism and has provided a more nuanced picture in that regard than the strategic management literature. Third, it shows the crucial role that ideas and conflicts between various interests play in the persistence of strong state intervention (albeit in changing forms) in relation with globalization pressures. This is an important argument to understand the diversity of state capitalism, and its reproduction (or not) over time. Nonetheless, this literature has several shortcomings.
As previously discussed, the CC field has reacted to its previous lack of attention to the state in two ways, and reached diametrically opposite conclusions, both of which are problematic in our view. On the one hand, commentators have upheld the validity of the category state(-led, -permeated) capitalism, and have fleshed out what are deemed to be its key institutional features. However, this has proved to be a particularly thorny exercise, and commentators tend to disagree over the
This leads us to the second claim by some CC scholars, which has been to reject altogether the categorical validity of state capitalism on the basis that the state plays a pervasive role in most if not all of the national economies investigated. This position can be summed up as
Furthermore, if the CC literature has done a good job at explaining the
State capital in the global political economy
The contribution of GPE research on state capitalism is somewhat heterogeneous. While it is clear that management scholars are mostly interested in statist (state-owned or state-controlled) capital, and that the CC literature is concerned with (national) state-led varieties of capitalism, state capitalism in GPE covers a highly diverse range of research topics and objects of inquiry. 2 We identify four (overlapping) themes that cover the main contributions of the field.
First, GPE scholars have discussed the implications of state capitalism as a source of cross-border finance, and particularly, a source of patient capital. For instance, Kaplan (2016) argues that the longer-term horizons of Chinese state-to-state lending provides more fiscal space to Latin American debtors than when they borrow from financial markets, thereby affecting their policy choices. For Kaplan, this has the potential to trigger a move away from the more traditional (Western) market-centric governance of sovereign borrowing. Critical scholars are more sceptical: for Gonzalez-Vicente (2017), state capitalism as a source of finance and investment is unlikely to significantly alter South–South relations. Taylor (2014: 354) argues similarly that, ‘state capitalism as exported to Africa serves the class interests of externally oriented fractions with aspirations to become internationally competitive, accumulate mega-profits and entrench their domestic positions’. The question of state capitalism as a source of finance is not reserved to the developing world. Thatcher and Vlandas (2016) show how both state and private actors in Germany and France have actively sought to attract investment from SWFs. Indeed, Asian and Middle Eastern SWFs helped recapitalize distressed banks and automotive firms in the West in the post-2008 crisis environment (Haberly, 2011, 2014). This also increased the participation of state-controlled capital in the global network of corporate ownership and control (Haberly and Wójcik, 2017).
Second, GPE scholars have studied state capitalism in light of the reconfiguration of the state under conditions of globalization and financialization in order to achieve developmental objectives, maintain state sovereignty, and preserve existing domestic political orders. For instance, Nem Singh and Chen (2018) show how the internationalization and upgrading of SOEs allowed designing new developmental policies across the developing world. SWFs can play a developmental role (when used to invest in ‘strategic’ sectors, firms or projects) but can also be used as state instruments to retain sovereignty at home and/or extend it abroad (Dixon and Monk, 2012). For Carney (2015) and Huat (2016), the rise and persistence of state capitalism (under the shape of SOEs) can be explained by its ‘stabilizing role’ in the face of financial globalization. By addressing macroeconomic and financial volatility, and protecting from ‘political challengers’ who may benefit from financial globalization, state capitalism contributes to regime maintenance and the preservation of domestic political orders. Haberly and Wójcik (2017: 258) suggest interpreting the new state capitalism as ‘politically-mediated Polanyian double-movements of marketization and societal-protection, surrounding the advance of neoliberalism and globalization’. This has given rise to what Haberly and Wójcik call ‘a market-conforming, financial-return oriented state capitalist paradigm […] not as a reaction to neoliberalism and globalization, but rather as a means for sustaining them’ (Haberly and Wójcik, 2017: 251).
The Amsterdam School of critical IPE argues similarly that the current crisis of global capitalism has triggered a ‘reconfiguration of the global state–capital nexus’, marked by ‘the combination of a “return of the state” with a continued deepening of the process of capitalist transnationalization and globalization’ (van Apeldoorn et al., 2012: 472–473). In the West, the crisis has forced the state to take on an extraordinary role in order to protect the interests of capital in general, although this has so far not led ‘to any durable statist direction of the market’ but rather to an instrumentalization of the crisis to promote further neoliberalization (van Apeldoorn et al., 2012: 478–479). Across the global South, the particular configuration of the state–capital nexus corresponds to a statist version of capitalism (involving both rentier and developmentalist strategies) in which the state plays a particularly important role in directing capital accumulation. In both the West and the global South, they argue, the reconfiguration of the state–capital nexus is geared towards deepening commodification of labour and nature.
Third, GPE commentators have explored the interplay of statist and commercial strategies in the internationalization (or transnationalization) of state capitalism, via SWFs and state asset management bodies, SOEs’ outward FDI, M&A, and equity investment, and the creation of ‘national champions’. The key issue here is the following: are the going-abroad strategies of state capitalism
The second type of approach claims, on the contrary, that when going abroad, national oil companies are ‘commercially minded’, and that ‘governments follow firms more than they lead their internationalization’ (Meckling et al., 2015: 1162; Steinfeld, 2010; Victor et al., 2012). The third type of perspective provides a more nuanced account. For example, Meckling et al. (2015) argue that the internationalization of Indian and Chinese national oil companies is neither primarily state-driven nor market-driven; rather, it follows a ‘hybrid’ pattern characterized by ‘the co-existence of cooperation and conflict between increasingly entrepreneurial, profit-driven national oil companies pulling to global markets and partially supportive and interventionist home governments’ (Meckling et al., 2015: 1160).
Similarly, for de Graaff and van Apeldoorn (2018: 121), Chinese energy SOEs perform a ‘dual role, adhering to commercial principles abroad (e.g. prioritizing profit-making) but retaining the responsibilities of a state-owned company at home (e.g. prioritizing energy security and social stability)’ (see also de Graaff, 2012). This constitutes ‘the essentially contradictory nature of Chinese transnationalizing state-directed capital’ (de Graaff and van Apeldoorn, 2018: 121). Jones and Zou (2017) explore the case study of a Chinese SOE investing in hydropower energy in Myanmar. For them, the analytical distinction between state-driven or market-driven internationalization is problematic, both empirically (they find evidence for both theses), and theoretically, because it relies on a poor conceptualization of the relationship between the state and SOEs. Their key argument is that Chinese SOEs have ‘considerable power and autonomy to pursue profit-making activities and are very weakly regulated’, due to the dispersal of power and authority to diverse, cross-cutting state apparatuses that are unevenly fragmented, decentralized, and internationalized. Nevertheless, parts of the state also ‘strive to control SOE activities where their interests are at stake. Thus, party–state/SOE relations are best understood in terms of an evolving struggle within a transformed, multilevel governance structure’ (Jones and Zou, 2017: 755).
Fourth, GPE scholars have debated the relation between the rise of state capitalism and the future of the (Western-dominated) liberal economic order and the global hegemony of neoliberalism. The Chinese model is often the key concern here. Here again, a number of general perspectives can be identified. The first one sees the resurgence of state capitalism, and especially its Chinese instantiation, as a threat to the ‘free market’ and liberal democracy. For instance, Bremmer (2010) contends that state capitalism is quite simply antithetical to Western liberal capitalism and seriously risks impairing the smooth functioning of markets. Kurlantzick (2016) provides a slightly more nuanced account and makes a distinction between authoritarian ‘types’ of state capitalism (China, Russia, Egypt, Vietnam) and more democratic ones (Brazil, Indonesia, etc.). In his view, the former ‘could undermine the best aspects of free-market capitalism – innovation, entrepreneurship, individualism, and democracy’, while the latter ‘could coexist with individuals’ economic and political freedoms’ (Kurlantzick, 2016: 11–12). Furthermore, while acknowledging that some of the modern state capitalists … – Singapore and Malaysia come to mind – are important pillars of the world trading system, generally follow its rules, and – in the case of Singapore – have been leading advocates for expanding free trade globally and in Asia (Kurlantzick, 2016). Kurlantzick (2016) still argues that overall state capitalism ‘presents a real potential alternative to the free-market model, and as an alternative it presents serious threats to political and economic stability around the world’, inasmuch as ‘these countries will provide much the world’s growth over the coming decades, and so will command ever-larger power in international institutions’ (p. 23).
Another set of GPE scholars also emphasize the potential of state capitalism in reshaping the liberal order, though importantly, this is not necessarily perceived as a threat. For example, for Nölke et al. (2015), the liberal order is unlikely to deepen – rather, it will be increasingly influenced by the state-permeated model prevalent in large emerging economies (see previous section on CC). The ‘common economic institutions shared by this group’ have the potential to become a ‘State Capitalist Consensus’, which could replace the ‘Post-Washington Consensus’ (Nölke et al., 2015: 540–541). Besides, the ‘foreign economies strategies’ of state-permeated economies are already ‘facilitating such a process’ (Nölke et al., 2015: 541). McNally (2013) makes a similar argument: ‘the refurbished state capitalisms of emerging market economies, especially from China, … seems to be producing a truly monumental alternate model of [neoliberal market] capitalism’ (p. 37). In contrast with Nölke et al., the primary distinction with neoliberal market capitalism does not reside so much in a set of common economic institutions than in their ‘considerable distrust of markets and full-out economic liberalization’, their ‘pragmatic use of markets’ and in their shared ‘strong belief in the potential benefits of state power, a belief that undergirds their economic management philosophies’ (McNally, 2013: 38–39). For McNally (2013: 43–44), ‘the possibility of a struggle between the established Washington Consensus and refurbished state capitalisms has become quite prominent’, although he emphasizes that ‘refurbished state capitalisms are deeply enmeshed in the GPE and their practitioners own immense amounts of global financial assets, most significantly U.S. treasury debt. Both models of capitalism are thus simultaneously co-dependent and in competition’.
The possibility that co-dependence and competition will lead to a scenario of ‘co-existence’ of the Western liberal capitalist model and the Chinese state capitalist model is envisaged by de Graaff and van Apeldoorn (2018), who argue that each could ‘maintain their own distinct political and economic system, both systems being – in different ways – part of and compatible with a capitalist and globally interlinked world economy. In this hybrid scenario China retains a relatively autonomous trajectory, partially adapting to the rules of the game of the liberal order, but at the same time holding on to distinctive aspects of its state–society model and foreign policy orientation’ (de Graaff and van Apeldoorn, 2018: 115). In another article, they further contend that the rise of state capitalism outside the Western core is leading towards, ‘an increasingly multipolar order’ and might ‘force a more active role of the state in the West’ (van Apeldoorn et al., 2012: 482).
Table 1 below summarizes the key insights of our analysis. As a whole, the recent literature on state capitalism has provided valuable insights into an extremely wide array of practices, policy instruments, institutional forms and governance arrangements that involve the state to different degrees and at a variety of levels, time frames and geographical scales. However, we have also underlined a number of serious limitations and shortcomings, which we further discuss in the remainder of the article in order to push the study of state capitalism forward.
Mapping of the state capitalism literature.
Source: Authors.
SOE: state-owned enterprise; CME: coordinated-market economy; LME: liberal-market economy; SWF: sovereign wealth fund.
Pushing the limits
We propose that research on state capitalism must grapple with three critical issues for the term to be analytically meaningful. To be capable of rendering the changing political geographies of capital and the polymorphism of state intervention amenable to analysis and critique, research must address: (1) the ‘missing link’ of a theory of the capitalist state, (2) the time horizons of state capitalism, or the question of ‘periodization’, (3) territorial considerations, or the question of ‘locating’ state capitalism. Many of the limitations and shortcomings previously discussed actually result from an incomplete or unsatisfactory engagement with these three deeply entangled issues. To be clear, by encouraging state capitalism research to engage further with those issues in particular, we do not attempt to enforce a universal consensus on those questions, which would be neither possible nor desirable. Rather, our main contention is that state capitalism research would benefit from a keener attention to those issues. This would bolster the analytical value of the category, strengthening the key claims of the literature (especially related to the ‘reinvention’ of state capitalism), and as such, would provide the basis for productive dialogues between different fields and approaches. Avowedly, in what follows, we raise more questions than we provide answers, although we hope to demonstrate the centrality of the three issues to the study of state capitalism. We provide initial reflections on those with the objective of sparking a debate.
The ‘missing link’: A robust theory of the state
Much of the literature uses state capitalism as a heuristic device to broadly refer to configurations of capitalism where the state plays a particularly strong role in organizing the economy and society, in supervising and administering capital accumulation, or in directly owning and controlling capital. If this conceptualization appears to be clear and straightforward, it pivots on a particularly thorny issue: what does
While we do acknowledge that many political economists will disagree that a unified theory of the capitalist state is necessary (if possible at all), 3 we nonetheless want to substantiate our claim about the need for a robust theory by highlighting some of the issues the absence of such a theory might raise. The CC literature, for instance, considers institutional dimensions and assumes that the presence of particular institutions or forms of intervention attests to a strong role of the state. Such an analytical focus, if not grounded in an overall theory of the state, constantly runs the risk of fetishizing some specific institutions and forms of intervention at the expense of others that might be less visible but equally important (for instance, the ‘hidden’ industrial policy in the United States, e.g. Block, 2008; Wade, 2012), or, as a matter of fact, policy interventions that are both very visible and very important but simply not considered by the CC literature in its discussion of state capitalism (e.g. monetary policy, the military-industrial complex, etc.).
Similarly, the management literature runs the risk of reifying specific types of organizational forms and governance arrangements, and misinterpreting the complex relations between states, ‘their’ SOEs, and private firms. Fetishizing specific institutions or governance arrangements might be particularly problematic inasmuch as the function of institutions does not necessarily follow from their form. In fact, institutional function is often variable and context dependent (Dixon, 2014; Ho, 2018).
Other students of state capitalism have attempted to define the strong role of the state by quantifying it. For instance, Kurlantzick identifies state capitalists as countries whose government has an ownership stake in or significant influence over more than one-third of the five hundred largest companies, by revenue, in that country … Below this one-third level of government ownership of companies by revenue, the economy is still determined primarily by the market, even though the state may play a significant role. (2016: 9)
By contrast, van Apeldoorn et al. (2012) suggest examining the recent resurgence of state activism in light of a historical materialist theory of the state. This is not the place to outline what such a theory should look like, or to rehearse their argument. What interests us is that this theoretical grounding affords nuance to the claim that the state is ‘back in business’. Indeed, the state has never left, even in the spaces of the world economy that have experienced the deepest rounds of neoliberalization and apparent state rollback, and even in spaces often considered liberal market economies. Thus, the lesson, or challenge, for state capitalism as a research agenda is to account for both the permanent and pervasive role and functions of the state in capitalism
Finally, there has been little discussion in the literature about the limits to the power of the state in state capitalism. Surely, the historical achievements of the state in terms of social transformation and nurturing capital accumulation have been remarkable. But the recurrence of devastating economic and political crises also suggests that there are limits to what the state can achieve, even in state capitalism(s). Hence, there is a need for further research in at least two regards. First, what are the limits to state power set by legitimacy constraints (the need to secure legitimacy from different domestic constituencies and social groups, other national states, international investors, etc.)? Second, and more fundamentally, what are the limits to state power set by its subsumption into capitalist social relations based on private property? In effect, how
In sum, a theory of the state is necessary if we are to identify the specific features and unique elements of state capitalism, in contrast with other forms of capitalism. Our argument about the need for a robust state theory is neither a call for theoretical parsimony, nor is it a call for a unified theory of state capitalism. In fact, given the diversity of state capitalist configurations, the multiplicity of their drivers of emergence (as shown in the literature), and the variety of the objectives they are set to achieve, we suspect that the search for such a theory might well be elusive. Rather, it is a call for critically interrogating the specific relations between state and capital and the particular configurations of
As such, the concept opens up productive avenues for combining the valuable insights of the literatures previously discussed (given their respective objects of enquiry, as shown on Table 1) in the study of state capitalist diversity. The concept of state–capital hybrids starts from the idea that the capital relation is always political, and that political and economic power are always entangled. But it does not stop there. The concept prompts us to reflect upon how specific organizational and governance arrangements (as discussed in the strategic management literature), particular institutions and forms of state–business relations (as discussed in the CC literature) and transnational state capitalist practices (as discussed in the GPE literature) contribute to a multifaceted process of reconfiguration of political and economic power in relation to broader dynamics of accumulation. Put differently, these are not only different objects of enquiry in and of themselves in the study of state capitalism. Rather, they are various entry points from which to investigate specific configurations of political and economic power in concrete instantiations of state capitalism, and
Such attention to the specific features of contemporary state–capital hybrids is also particularly important given the pervasiveness of the role of the state in capitalist society (in enforcing the rule of law and property rights, managing labour and land-nature, regulating money and finance, etc.), and the breadth of the tasks it has performed throughout the historical geographies of capitalism. Which leads us to the essential – and intimately related – issue of periodization.
On the time horizons of state capitalism: The question of periodization
Looking at the state in capitalism from an historical perspective, we are faced with two outstanding facts: first, the remarkable historical continuity of its pervasive role; second, its conspicuously changing character (in terms of the scope and depth of state intervention, but also, more broadly speaking, in terms of the shifting boundary between public and private spheres). This underlines the importance of clearly delineating the time horizons of state capitalism. In short, what exactly is
A thoroughly defined periodization is crucial to substantiate the claim of historical novelty. Here our argument is not that the state capitalism literature does not provide any periodization – several contributors actually provide very comprehensive ones. For instance, the historically-attuned account offered by Musacchio and Lazzarini (2014: chapter 2) is useful in showing how state ownership has changed since the late 19th century. Nevertheless, as discussed in ‘Managing state capitalism’ section, they do not specify the concrete implications of those new governance and organizational forms in terms of the role of the state in capital accumulation. As a result, it is uncertain what is qualitatively different in the new period. The claim of historical novelty lacks substantiation. Another issue is that their periodization covers almost all the historical geographies of capitalism, from state ownership of infrastructure in the colonies, to the planned economy of the Soviet Union, large-scale nationalizations in the West after the Second World War, etc. If state capitalism is a permanent feature of capitalism, as this periodization suggests, how analytically useful is the concept in making sense of the recently more visible role of the state and the changing political geographies of capital?
Nölke (2014: introductory chapter) suggests a periodization underpinned by a different principle. He identifies three waves of ‘successful’ catch-up capitalist development, each corresponding to a period of state capitalism: (1) Germany and Japan (in late 19th century); (2) the New deal in the United States, Fascism, Stalinism, the Swedish Model and East Asian developmentalism (from the 1930s to the rise of neoliberalism in the 1980s); (3) state capitalism 3.0 in emerging economies (in the contemporary period). Here, the issue is that by covering such a variety of economic models and experiences, the periodization de facto considerably stretches the boundaries of the concept. Besides, it is highly debatable if those models and experiences were actually driven by the logic of catch-up development (and if they were ‘successful’), and here again, state capitalism looks like the historical norm. While providing historical depth to the concept, this periodization also stretches it so much that it risks diluting its analytical purchase (‘everything becomes an instantiation of state capitalism’).
Our point is that although the historical depth of those two accounts is admirable, they also face significant difficulties and limitations in delineating the time horizons of state capitalism. What those two examples show is that periodization is not easy. Yet, we would argue that it is necessary. Debates about how to periodize and on the basis of what principle(s) could considerably help in strengthening the analytical value of the concept and in substantiating the claims of historical novelty. For periodization to be effective, it must allow answering four key questions. First, what is
While providing a comprehensive exploration of these questions is beyond the scope of this article, we suggest that our proposed concept of state–capital hybrids might be useful for at least two reasons. It prompts us to be attentive to what exactly is driving the reconfiguration of political and economic power and the renegotiation of the boundary between public and private sphere that characterize specific instantiations of state–capital hybrid across variegated political and ideological contexts. The objective here is to precisely identify the strategic, structural/epochal, or more contingent factors involved in the emergence of particular state–capital hybrids, as well as the specific institutional, organizational, and legal forms that facilitate such emergence. This opens up the possibility that there may be different periodizations for different concrete types of state–capital hybrids. This also opens up the possibility that the development of new institutional, organizational and legal forms may not necessarily signal a reconfiguration of political and economic power. Rather, such development might be driven by the reproduction of the same power configuration under new conditions. For instance, financialization and globalization may push states to develop new institutions, policy tools, and forms of intervention in order to continue performing tasks and functions that they have long performed, such as industrial policy, maintaining financial stability, preserving some form of economic sovereignty or providing public goods.
Put differently, by virtue of the highly dynamic – some would even say revolutionary – character of capital accumulation, the forms of state intervention constantly change. Although some of these episodes of transformation can be quite drastic (often in the aftermath of crises), we argue that they do not always warrant the identification of a new period of state capitalist development. The added value of the concept of state–capital hybrids is that it pushes us to
Locating state capitalism: Territorial and geographical considerations
Our critical survey of the literature shows the importance of territorial and geographical considerations in making sense of state capitalism in at least two respects. First, we have seen that there are different views on
First, much of the state capitalism literature still relies upon deeply problematic geographical imaginaries that tend to pit an illiberal, opaque, corrupt and threatening capitalism located in the East, against a
Second, and from a more methodological perspective, geographical outlooks that are not centered on the national state are necessary to grasp the spatial practices and strategies of the new state capitalism at a variety of scales that cut across the national, as well as their interconnection. For instance, the methodological nationalism of the CC literature is ill-equipped to deal with the relation between the regional and the transnational, which is important to understand the nature of contemporary Chinese state capitalism. Indeed, much of the state support to the internationalization of Chinese SOEs is provided by provincial states, often in partial autonomy from the central government (see Gu et al., 2016). The national state remains of course a key site in the political geographies of state capitalism, but the literature might benefit from a deeper sensitivity to the multi-scalar relations that contribute to the reconfiguration of economic territory and sovereignty via diverse state capitalist strategies and practices. A number of GPE contributors have gone some way in this direction when considering the fragmentation of the state and the question of multi-level governance (e.g. Gu et al., 2016; Jones and Zou, 2017).
Third, we submit that the state capitalism literature might benefit from further engagement with the notion of uneven and combined geographical development. This concept is particularly well positioned to grasp state capitalism in light of its growing integration into transnational circuits of capital (including global networks of production, trade, finance, infrastructure and corporate ownership) and in light of interstate competition in the context of a deeply polarized world market. Let us take two examples to illustrate this argument. The first one is that of the recent creation of state investment funds in Western economies such as Ireland, France and Italy (Dixon, 2017; Mertens and Thiemann, 2018). This development is inseparable from state capitalist practices that originate elsewhere: they are a reaction to the growing volumes of state-controlled investments from the Middle East and China in those economies. Similarly, the renewal of state activism in Brazil during the rule of the Workers’ Party was intimately connected to state-led capital accumulation and urbanization in China, and the boom in primary commodity prices that it generated from the early 2000s to the mid-2010s. Indeed, the extraordinary large rents from commodity exports flowing into Brazil provided the material basis for renewal of state activism in the economy. Both examples show that state capitalism, understood as a global phenomenon and in its multiple geographically specific manifestations, must be grasped in light of dynamics of global uneven development, and of politically mediated capitalist competition. In our view, this is also crucial to uncover the drivers of
Here again, a focus on state–capital hybrids rather than on state capitalism, may prove useful to explore the remaking of the political geographies of capital under conditions of uneven development and capitalist competition. Indeed, it pushes us to investigate how different historically and geographically specific institutional and political forms, practices, and flows contribute to the re-scaling of relations between firms and nation-states, and the reconfiguring of spaces of political power and authority beyond national territories and in geographical settings that span north/south and east/west boundaries. For example, Dixon and Monk (2012) show how different types of SWFs differentially contribute to the remaking or resilience of economic sovereignty under conditions of globalization and financialization.
Conclusion
Debating state capitalism is not new. There have been previous rounds of academic debates about state capitalism, each at historical junctures characterized by deep capitalist crises and renewed state activism from the end of the 19th century to the 1970s and 1980s (see Sperber (2019) for an excellent intellectual-historical overview), not unlike the contemporary conjuncture. State capitalism as
As argued throughout the article, we have serious reservations about state capitalism as
Much work remains to turn state capitalism from an umbrella term – harsher commentators might even say a mere buzzword or slogan – into a powerful heuristic tool. We would offer that by refocusing on the ‘missing link’ of a theory of the capitalist state, the time horizons of state capitalism, and territoriality of state capitalism, the analytical value of the category state capitalism
By bolstering the analytical value of state capitalism at a basic level, we would hope that state capitalism research could more effectively engage with other academic debates and topics of contemporary political–economic significance. Notably, issues that were at the core of previous debates about state capitalism are almost completely absent from current debates. Three issues in particular: (1) questions of class configurations and who appropriates surplus; (2) questions of monopoly capitalism (dynamics of concentration and centralization of capital, and of its new relationships with the state) and (3) the repressive and ideological functions of state apparatuses (e.g. Poulantzas, 1978/2014 on what he called ‘authoritarian statism’). All are relevant today. Indeed, it is surprising that the state capitalism literature so far has not engaged at all with other academic debates about the changing forms of the repressive and ideological functions of state apparatuses. The literature should have something to contribute to debates about the rise of the mass surveillance state, the militarization of borders and authoritarian neoliberalism (Bruff and Tansel, 2019; Fabry and Sandbeck, 2018).