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Non-capitalist Mixed Economies: the case of (political) socialism

LeftEast was a cosponsor of an online conference on non-capitalist mixed economies from June 23–26 2021.  Co-sponsors of the conference included the Karl Polanyi Center, Eszmélet Journal, Social Theory College in Budapest, Polanyi Institute, Geopolitical Economy Research Group, Institute of Political History Social Theory Research Group, The Study Group on Global Labour History and Social Conflicts – IHC Universidade Nova de Lisboa, Left East, Institutul pentru Solidaritate Socială, Working Group for Public Policy, Helyzet, Fordulat, CriticAtac, Transform Europe, and the International Karl Polanyi Society. A selection of the talks has been published by the Eszmélet Foundation in a special issue of Eszmélet (2021), entitled “In Need of Alternatives: Problems and Issues of Non-capitalist Mixed Economies”. We offer our readers the chapters of this volume as a special series on LeftEast, which have been published on Wednesdays of the last few weeks.

Focusing on non-capitalist mixed economies, the most important question is the nature of state socialist experience. Which are the social organizational characteristics that best describe the state socialist experiments? Above all, they were not capitalist societies because they did not unite the two most important factors of production, human beings and the means of production, namely labor and property, on the basis of private property and through market relations. This does not exclude that small-scale production, capitalist private property and subsistence economy based on reciprocity could also exist in a subordinate position, to varying extents depending on the historical period and the geographical location. Furthermore, they were not Communist societies given their historical preconditions, since the primordial conceptual precondition of Communism is that free individuals organize free associations and exercise a direct social control over labor and production, and they are not organized “from above” by the state. For a positive definition, by adopting the concept of J. Wiatr, W. Narojek and the Polish school of economic sociology, we should see the following:

“Socialist industrialization, the collectivization of agriculture (where it was implemented), the cultural revolution – all of these are the products of certain well defined and consciously accepted decisions (even if the decision-makers were not always conscious of all of the consequences of the decisions which they have reached). If this is like that, then here – in contrast to the model of the spontaneous individual interactions determined by the law of the market – we can primarily see processes, whose essence is: the management of social processes through the use of state power for this purpose. Under such conditions the political institutions acquire a new significance. They are no longer only means which serve the protection of the economic system against (internal or external) forces that can disturb the functioning of the economy, but quite the opposite: they are, above all, coordinating means in realizing the economic tasks. Thus, this system cannot function without decision-making and executing agencies, which determine the direction of social mass processes on a national level. Therefore, the issue of politics – the issue of political power – stands at the center of social life. In the socialist society politics – to a certain extent – fulfils the same role that the capitalist market fulfilled under the conditions of classical capitalism: it becomes the terrain of social integration, which, to a large extent, determines the character and realization of social processes also in the other, ‘non-political’ fields of social life” (Wiatr 1980, 196).

Going beyond Polish economic sociology, we can state the following: state socialism – or political socialism – is a social system organized in the framework of the state, where public property is dominant but it can also be a mixed economy, integrated not by the market but by the forces of politics.

This system is not characterized by the exchange economy of individual private property owners and allocational decisions governed by the maximization of profit, in line with the rules of the market. In the state socialist experiments, fundamental allocational decisions, namely, 1) the ratio of accumulation and consumption; and 2) the ratio of private and public consumption, were decided through the mechanisms of politics. These are indispensable characteristics of a “planning society”. Its institutional center is not the parliament of competing political forces, which only had a function of representing territorial interests and fulfilling legislative-legitimating roles, but it is centered on the institutions of rational redistribution: on the central political terrain of power appearing in the planning mechanism to enforce state interests (sectoral and functional state departments, Central Planning Office), and the Central Committees of the leading political parties, where all important agents of our society were present. In a mixed economy, where public property is still predominant – namely in Hungary after the implementation of the New Economic Mechanism (1968) – beside the reduced planning, the state also utilized the value relations in the commodity producing parts of the economy. In this system the one-party system became the political guarantee of the different forms of public property (state farms, state-owned enterprises, cooperatives).1 Retrospectively, this is shown by the fact that in more than a dozen countries the introduction of the multi-party system was followed by the privatization of the forms of collective property. Starting from Polish economic sociology, we can describe these historical experiments objectively, without value judgement, in a non-meta language and in an evaluative manner (Narojek 1973; Wiatr 1980, Chapter 7, in particular 195–202 and 213–218; similarly to the argument of Aron 1962 and Konrad – Szelényi 1979).

Three theses can be formulated based on the above principles: First, it is not accidental but an experience displaying a fundamental necessity that the phase of Soviet war communism was replaced by the NEP (New Economic Policy), and the Chinese “great proletarian cultural revolution”, which had experimented with direct translation, was followed by the reforms of Deng Xiaoping. Namely, the transition to the direct socialization of labor is not only the question of organization and political education, but it presupposes a high stage of development in productive forces, which is shown – among others – by the index of the decreasing trend of the rate of profit converging at zero. This should mean a highly developed stage of scientific and technical knowledge, public education, civilization and culture, the richness of the subjective human experience, since the most important productive force is the human being. If overcoming economic backwardness is the most urgent political task, every experiment driven by a socialist intention will have to face multifold tasks and problems. None of the experiments we have known so far could avoid such traps. In such cases the transition will be by no means short in time; thus, production that satisfies human needs, cannot just be organized through “book-keeping”, which encompasses the whole society. The political transition can only be reached through a historically longer period, with the potential danger of regression in various spheres. In the struggle of the old and new political forces, we cannot even see the socialist stage, the “restricted” commodity production of the Critique of the Gotha Program, the leveling impact of social justice through redistribution and the establishment of the supremacy of collective property as the highest stage of socialist development – no matter how positively we think of these achievements. The economic liberation of labor, the overcoming of the discrepancy between partial and universal labor, the elimination of alienated relations, the retaking of alienated executive power cannot yet be the task of either the political transition or lower stage of socialism. However, in the era of the political transition, the tasks that lead to a lower stage can be seen in relation to executive power.

Second, a politically integrated society does not mean that commodity production is eliminated. It has a civilizational value and serves as the antithesis of subsistence economy; it is a universal category. Modern capitalism is not specified by the commodity producing economy in itself but together with the supremacy of private ownership and power relations: such economies are capitalist commodity producing economies, contextualized by the unequal and hierarchical relations of the world economy and the varieties of the political regimes that are compatible with this economic system. In contrast, the political institutions of socialism should ensure the social control over the surplus at macro and micro economic levels, for the sake of producing and satisfying human needs. The decisive element of the development of an economy, which is based on mixed ownership relations but simultaneously ensures the dominance of collective ownership, is that the individual economic units in the public sphere function as commodity producing economies: that the commodity relation function as value relation and produce commodities for the purpose of selling and for profit but without the commodity relation as private appropriation because the citizens socially exercise control over the produced surplus. In this sector the socialization of accumulation and the allocational decisions at macro and micro levels should be achieved gradually! The social control over surplus can transform nationalized means of production (factories) into socialist enterprises, and establish a new form of socialization, responsible self-government as opposed to the old managerial forms.

Third, due to the contradictions of the world economy economically and politically unequal development can again produce new versions of rough (primitive), political socialisms, state socialist experiments at the semi-peripheries. But if they do not learn from the mistakes of their predecessors, and they remain isolated from the anti-capitalist movements of the developed world – to put it differently, from equal development – then they probably would again be unable to achieve a breakthrough in a civilizational sense. If, however, they learn from the past, they would not be doomed to failure from the beginning. The fight for a socially more just, sustainable and democratic regime – namely, one that ensures access to the material and intellectual goods also for the poorer social classes – is a meaningful and attainable goal even in the era of a political transition. This can be the potential path of contemporary progress. If we can assure moderate class-based inequalities, and build up a mixed, multisectoral economy, in which public goods are specified on the basis of a significant collective property and not on the basis of a “necessary evil”, and the socialization of accumulation happens through democratic “preparatory schools” – we can set new progressive goals. As a first condition, we should overcome the egoism (“rational choice”) of the bourgeois individual. Thereafter, it becomes inevitable to socialize production and redistribution in a clear form, which can be established in a transitional stage, characterized by a semi-étatist, democratic executive power, following experimentation with the self-management of producers and the retaking of alienated executive power. Then the “withering away of the state” in this sense becomes a rational historical problem – even as a secular trend (“long transition”). We can formulate positive solutions at an institutional level towards the direction of a “semi-étatist” state, or at least the introduction of such experiments.


Aron, Raymond 1962: Dix-huit leçons sur la société industrielle. Folio essais n° 33. Paris: Gallimard.

Konrád, George – Szelényi, Iván 1979: The Intellectuals on the Road to Class Power. A Sociological Study of the Role of the Intelligentsia in Socialism. New York: Harcourt Brace Jovanovich.

Narojek, Winicjusz 1973: Społeczeństwo planujące. Próba socjologii gospodarki socjalistycznej [Planning society. Toward a sociology of the socialist economy]. Warszawa: Państwowe Wydawnictwo Naukowe.

Piketty, Thomas 2014: Capital in the Twenty-First Century. Cambridge, MA – London: Belknap Press, Harvard University Press.

Wiatr, Jerzy 1980: A politikai viszonyok szociológiája [The sociology of political relations]. Budapest: Kossuth.


1 Piketty writes about the most excessive privatization in the whole history of capital, which took place in the countries of the former Soviet bloc. According to him, the size of national property did not change. Simply put, the ratio of collective and private property was reversed; the property rights of capital moved from state to private individuals (Piketty 2014, 186–187). The “original sin” in Hungary has been the process of privatization and the way through which the new elites destroyed complete productive apparatuses and whole industrial sectors. They did not accumulate wealth primarily from property invested in production but, rather, a redistribution of the capital stock took place, in which capital was transformed from collective forms of property to private property, on the basis of political capital.

Original publication: 

Szigeti, Péter 2021: Non-capitalist Mixed Economies. In: A. Melegh (ed.), In Need of Alternatives. Problems and Issues of Non-capitalist Mixed Economies. Budapest: Eszmélet Foundation, pp. 39–43.