State capitalism was touted by Lenin as a positive step on the road to socialism. By state capitalism, Lenin meant a “commanding heights” of large businesses and trusts controlled by a state that served the interests of the working class.
Lenin’s transitory state capitalism of the 1920s was replaced by Stalin’s command economy. Postwar France’s dirigisme and Japan’s industrial policy were both failed experiments with state capitalism, but it is alive and, some think, well in China, Russia, Brazil, and many other countries.
I spent four days in Moscow last week, attending a conference on the Gulag system and renewing old acquaintances. On my last visit three years ago, I encountered mixed opinions on Vladimir Putin. He had some strong defenders and few vehement opponents. This time, the common response to Putin’s return to the Presidency was: “Why do we need that guy back?”
Russian entrepreneurs understand that another six or even twelve years of Putin means more of the same state capitalism, which they see as unbridled corruption, cronyism, and extreme uncertainty with regard to property rights.