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State capitalism is an economic system where the state directly engages in or guides the process of capital accumulation, where the fundamental elements and institutions of capitalism – the accumulation of capital, wage labor, centralized management, and an economy driven by profit-maximization – continues to exist. This can take the form of the state undertaking business and commercial economic activity through state-owned enterprises, or guiding the development of markets and industries through indicative planning and industrial policies. There is no unified definition of "state capitalism", which refers to a wide array of different practices. The term has been applied to liberal market economies with high concentrations of state-owned enterprises such as Singapore and Norway, to state-guided market economies that incorporate industrial policies, and to the Soviet-type command economies.

Performs role as entrepreneur or investor Modern state capitalism as alternative to western liberal capitalism

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State capitalism is an economic system in which the state undertakes business and commercial economic activity (i.e. for-profit) and where the means of production are organized and managed as state-owned enterprises (including the processes of capital accumulation, centralized management and wage labor), or where there is otherwise a dominance of corporatized government agencies (agencies organized along business-management practices) or of public companies such as publicly listed corporations in which the state has controlling shares. Marxist literature defines state capitalism as a social system combining capitalism with ownership or control by a state. By this definition, a state capitalist country is one where the government controls the economy and essentially acts like a single huge corporation, extracting the surplus value from the workforce in order to invest it in further production. This designation applies, in the opinion of some Marxists, regardless of the political aims of the state (even if the state is nominally socialist). Many scholars argue that the economy of the Soviet Union and of the Eastern Bloc countries modeled after it, including Maoist China, were state capitalist systems. They also argue that the current economy of China constitutes a form of state capitalism.

State capitalism is used by various authors in reference to a private capitalist economy controlled by a state, i.e. a private economy that is subject to economic planning and interventionism. It has also been used to describe the controlled economies of the Great Powers during World War I. Alternatively, state capitalism may refer to an economic system where the means of production are privately owned, but the state has considerable control over the allocation of credit and investment. This was the case of Western European countries during the post-war consensus and of France during the period of dirigisme after World War II. Other examples include Hungary under Viktor Orbán, Russia under Vladimir Putin, Singapore under Lee Kuan Yew   and Turkey under Recep Tayyip Erdoğan as well as military dictatorships during the Cold War and fascist regimes such as Nazi Germany.

State capitalism has also come to be used sometimes interchangeably with state monopoly capitalism to describe a system where the state intervenes in the economy to protect and advance the interests of big business and large-scale businesses. Noam Chomsky, a libertarian socialist, applies the term 'state capitalism' to the economy of the United States, where large enterprises that are deemed "too big to fail" receive publicly funded government bailouts that mitigate the firms' assumption of risk and undermine market laws, and where private production is largely funded by the state at public expense, but private owners reap the profits. This practice is in contrast with the ideals of both socialism and laissez-faire capitalism.

There are various theories and critiques of state capitalism, some of which existed before the October Revolution. The common themes among them identify that the workers do not meaningfully control the means of production and that capitalist social relations and production for profit still occur within state capitalism, fundamentally retaining the capitalist mode of production. In Socialism: Utopian and Scientific (1880), Friedrich Engels argued that state ownership does not do away with capitalism by itself, but rather would be the final stage of capitalism, consisting of ownership and management of large-scale production and communication by the bourgeois state. He argued that the tools for ending capitalism are found in state capitalism. In Imperialism, the Highest Stage of Capitalism (1916), Lenin claimed that World War I had transformed laissez-faire capitalism into the monopolist state capitalism.