Case against State-Capitalism

We have believed that the road to serfdom was evaded since the end of the cold war with a victory of capitalism over the socialist-empire, the excess form of socialism which was considered as the serfdom. Nevertheless, we are still in danger of being unintentionally guided to a serfdom. The modern industrial world has increased the material productivity and the political stability under the common interest in pursuing a material prosperity. At the same time, this has also produced the cost for individuals to live in an intensively cohesive structure.


Capitalism mentioned in this short essay refers to the State-Capitalism whose economic and political system is based on a stratified corporate structures backed up by a nation-state government. This capitalism requires the law enforcement (The judicatory body of nation-state) and the centralised economic planning by central-banking and governmental fiscal policy (The legislative body of nation-state). Individuals and their private corporations are free to compete as long as they follow the unified rigid rules imposed by a single autocratic body called nation-state.

These individuals and their corporations are actually not free to act and compete because some of them are privileged more than the others. The nation state's government and judicature set their roles suitable for their peer groups which are loyal to the authority or their nation-state. So, their freedom of action is still restricted by the roles and their competition is based on the authoritarian interests of a nation-state's autocracy and its fellow peer corporate elites.

This state-capitalist political structure is a resemblance to the static monarchist political structure explained in Fragment on Government. Even though a monarchy is merely a constitutional, the status-quo having been maintained so long time has already established the unbreakable hierarchy of power and wealth. These peers of monarchy have already monopolised their power and wealth as much as they are able to prevent their potential competitors away from gaining more power than the already existing status-quo even under a free market competition.

They are protected by the old-fashioned law and legislation which indirectly enable monarchy and its peers to keep holding their power and control over the entire nation and its citizens. Bentham then claimed for replacing the law and the legislation unfairly privileging these peers with the new alternatives in order to liberate individuals from this control-ship.


Many socialists refer to capitalism as an antithesis of socialism. The word capitalism was invented by socialists in order to refer to the policy based on the free market mechanism and private property ownership which socialists oppose to. Capitalism has started to be mentioned as one political ideology since many anti-socialist individuals supporting a freer market system started using this terminology capitalism as their believing antithesis of socialism. But, this seems to be doubtful because there are many characteristics in common between these two political ideologies. Both are the modernist political ideologies requiring a systematic autocratic nation-state and the zealous moral universalism putting an excess emphasis on altruism and cohesion.

Both capitalism and socialism frequently put emphasis on excess-conformity and staunchly regulate individuals and their freedom of action, life, and thought by condemning egoism as vice. Socialism forcibly integrates individuals into its autocratic cohesion meanwhile capitalism simply spontaneously excludes individuals, who are disloyal and/or useless for their interests, from the means of acquiring material well-being and status honour. Both are the homogenous political ideologies discriminating and ostracising who are too unique and eccentric.

Whenever individuals are employed by a corporation to spend their time and efforts for it, they must have realised that many of corporations do not base their business management on the rational market mechanism. The management of these corporations is influenced by the irrational preferences of both the high class members, the minority but powerful executive committees, and the peer-groups of the majority employees. The executives often tend to put priority on their personal favour and their biased view on unique individuals over individuals' competence and merit. The majority workers form their peer group to purge the other individuals hardly integrated into their peer group due to their jealousy and discrimination.

Because of this employment scheme biased by these irrational causes, the market equilibrium of demand and supply of the human-capital is hardly accomplish-able, and the mobility of human capital is far more rigid than the market structure explained by the free market principle, the classical economic theory of capitalism. There is then the political influence on the corporate structure. The modern corporate structure is unnecessarily big and complexly stratified as same as the bureaucracy of a nation state, and this does not look like how the private sector structural model is supposed to be by the free market principle.

The existence and the prosperity of these corporations are secured by the law enforcement and regulations designed and imposed by the single nation-state's authority, and these corporations aid the nation state authority by doing its favour. Unlike a pure form of socialism, how both various private corporations are incorporated into one unified nation-state bureaucracy. But, this capitalist structure is identical to the state-socialist counterpart seen in the USSR. Lenin had actually embraced the growth of state capitalism in The State and Revolution as the modern capitalism becomes more bureaucratic and incorporate into the nation-state's bureaucracy.


The solution to overcome from the rigidly structured capitalism is certainly not a political revolution because a political revolution simply replaces one stratified politics with another stratified counterpart such as socialism. Moreover, remaining the status-quo just perpetuates the authoritarianism of politics repressing individuals' liberty. As long as individuals rely on any form of stratified political structure, these individuals are manipulated to live like cattle or cogwheels propping up the oppressors of individuals' liberty.

The rebellious mind of individuals is the key of the solution. No violence is required for this rebellion: Individuals just need to keep their strong self-esteem and being honest about their pure ego and natural desires. For the time being, the current excessively stratified modern world politics is hardly relinquished at once. So, the gradual step of liberating individuals is the feasible pathway. We, individuals, should use them instead of being used as they can still bargain with government and corporations for our own interest. Individuals will simply need to be enlightened to maintain their self-esteem by preventing themselves from being used by either government or corporations.