State Capitalism and Development in East Asia since 1945




Owen Miller (ed)

Brill, Leiden, 2023. 283 pp., 133€ hb
ISBN 978-90-04-25190-8

Reviewed by Erwan Moysan

About the reviewer
Erwan Moysan is a PhD student at Cardiff University currently working on Marxist critiques of the More


State Capitalism and Development in East Asia since 1945 is a book with chapters by authors from the United Kingdom, South Korea and Germany, with backgrounds in economics, politics and history, edited by Owen Miller. It analyses the development of East Asia, encompassing China, Taiwan, both Koreas and Japan. It does so through the lens of the Marxist theory of state capitalism understood broadly as the theory that holds that ‘the state is always an integral part of the capitalist system: capital accumulation cannot occur without the state and the capitalist state cannot exist without capitalism’ (4-5). The degree of state involvement can vary from country to country, with at one end of the spectrum states that avoid direct involvement in business and at the other states acting as collective capitalists. Except for the opening and closing chapters, each chapter is dedicated to an East Asian country.

Owen Miller and Gareth Dale introduce the book’s theoretical framework, subscribing to Tony Cliff’s theory of state capitalism. Cliff viewed the Soviet Union as one big firm, although rather than competing internationally with exchange values, he saw the USSR as competing with use-values through the arms race. While Miller and Dale recognise that there are other theories of state capitalism, they declare Cliff’s theory ‘the most detailed analysis of state capitalism in the Soviet Union’ (6). This is debatable. For example, Cliff, like many theorists of state capitalism, viewed Soviet state capitalism as more advanced than Western capitalism. By contrast, there were other authors in the same time period, like Amadeo Bordiga, who saw Soviet capitalism as inferior to that of the West. The contributors to this book themselves see state capitalism as the form of capitalism the Soviet Union and East Asia adopted in order to ‘catch-up’ to the most advanced capitalist economies. Cliff’s followers have largely reworked his theory, not in the least in this very book by spreading the theory to East Asia, and this is to their credit. But it also makes their affirmation all the more bizarre. Authors throughout the book refer to Cliff’s theory, but it is not always clear whether they are referring to Cliff’s view or that of his successors.

On one hand, Cliff’s successors not only recognise that labour-power taking the form of a commodity is a core feature of capitalism, but they go further than most theorists of state capitalism and recognise that competition between capitals is also a core feature, especially international competition. While some theorists, such as Paresh Chattopadhyay, acknowledge the significance of competition, nevertheless, they often confine themselves methodologically within the framework of the nation. What distinguishes the authors of the book from state capitalism theorists that also recognise the importance of competition is that they insist that the law of value does ‘not apply strictly to market-mediated competition, with socially necessary labour expenditure determined a posteriori, after goods have exchanged and sales numbers and prices have signalled the degree to which labour time expended was in fact socially necessary’ (12). Micheal Haynes, in the book’s closing chapter, also suggests that there can be value without market exchange, commenting that ‘the fetishism of commodity fetishism’ is the ‘Marxist version of the conventional obsession with markets’ (237). Both chapters try to justify this position by noting that capitalists anticipate in the realm of production on the basis of past circulation. On this basis, they abruptly leap to the conclusion that the law of value thus also applies to state-mediated competition, notably arms production, because it is based in a similar moment of anticipation, with the moment of realisation being war. In short, they affirm that market competition is not the only form of capitalist competition. This is unconvincing. The market cannot be abstracted away from Marx’s critique. Value being the exchangeability of the product of labour, the notion of a law of value without the market is nonsensical. As the book itself notes, if the anticipation is wrong, the punishment can be severe. Which undermines their entire point. Potential value is not value. It only becomes so through the ‘test’ of market exchange. The position is all the stranger given the authors must be aware that it is not necessary to affirm it in order to speak of state capitalism or imperialism.

Regardless, Miller and Dale do an excellent job of catching anyone unfamiliar with state capitalism up. The state is not only understood through its fundamental roles within capitalism – imposing a social order between capitals and between capital and labour, establishing general conditions of production and representing national capital on the world stage – but also historically. The capitalist state has always been involved in capital accumulation. While the degree of this involvement varies according to country, all are subject to the capitalist dynamics identified in Capital. Miller and Dale identify the premises of state capitalist theory in Marx and Engels, notably in Capital, Anti-Duhring and their criticisms of Ferdinand Lassalle and Adolf Wagner. They also summarise quite well the analysis of the degeneration of the Russian Revolution at the origin of the theory. A good summary of Japan’s state-directed development is also given.

Kim Ha-young takes us through the trajectory of North Korean state capitalism, from growing faster than South Korea in the first decades of its existence to the crisis of the 1990s. After describing how the Soviet occupation dissolved the working-class organisations that emerged from the liberation of Noth Korea from Japan in 1945, she depicts the firm labour discipline that was introduced. These policies, such as labour passports, severely punishing absenteeism, differential wages and piece rates, were identical to those employed under Stalin in the Soviet Union in the 1930s. And much like in the Soviet Union, workers struggled against these measures and were able to work around them, due to the advantage labour shortage gave them. Indeed, in both countries rapid growth was achieved through the transfer of labour from agriculture to industry. However, this sort of growth cannot last. North Korea’s extensive growth prioritising heavy industry over consumer goods and agriculture eventually reached a limit. There was an attempt to grow the consumer goods industry, which could have incentivised labour, but with the 1973 global crisis among other factors North Korea found itself isolated and unable to pivot. Today, on the surface the state maintains the appearance of an omnipotent state capitalism, while simmering below ‘is a vigorous market system of private trading companies and even manufacturers, usually disguising themselves as state enterprises’ (43).

Perhaps the highlight of the book is Kim Young-uk’s chapter on Mao’s China. It demonstrates, with a wealth of empirical material, that China pursued a policy of flexibilisation of labour, for both permanent and temporary workers, that primitive accumulation of capital took place and that even though China’s participation in international exchange was limited at the time – because bureaucrats were constantly comparing Chinese labour to Western labour by using international monetary values – international competition was nonetheless ‘nearly always the decisive factor in how and where living and dead labour was put to use within China’ (143). To support this latter point, they note, quoting Isaak Rubin, that ‘in capitalism, before producers compare labour through money in the actual process of exchange, they have already equalised their products with a determined quantity of money’ in consciousness (142). However, in regard to the theoretical problem outlined earlier, it should be noted that Rubin clarifies in that same passage that ‘the equalisation must still be realised in the actual act of exchange’ (Rubin 1973: 70). In any case, this does not change the fact that international competition shaped the Chinese economy in this indirect way.

The book’s goal is to expand state capitalism theory from being specific to so-called ‘socialist’ countries as part of a broader understanding of the relationship between state and capital. State capitalism should indeed move away from being a narrow concept but the other pitfall of stretching the concept needs to be avoided too. For example, it is hard to see how the South Korean state defending ‘severe exploitation’ (164) is specifically state capitalism as opposed to capitalism as usual. Regardless, Jeong Seongjin’s chapter on South Korea illustrates one of the book’s biggest strengths, namely an understanding that each country’s development is not isolated, but is part of the world capitalist system. In the post-World War II, US permanent arms economy, military expenditure counteracted, for a time, the tendency of the rate of profit to fall. The high growth rates without crises of post-war Japan and West Germany were possible only because of the US-driven permanent arms economy, notably via the Korean War. Similarly, although South Korea’s state capitalist development started in the 1950s, it really took off with the Vietnam War. US dollars, compensating South Korean cooperation in the Vietnam War, financed an export-oriented industrialisation, establishing a triangular trade pattern in which Korea imported means of production from Japan and exported most of its products to the US.

Tobias ten Brink offers a description of China’s 21st century state-permeated capitalism. While the last decade is not covered, he shows that the Chinese state today is not a monolith but is in competition with itself, notably since the decentralisation of the 1980s. The complex relations between state, party, bureaucrats, domestic capitalists and foreign capitalists are also detailed. Notably, he shows that the dichotomy between private and state property is not useful when analysing Chinese firms.

Throughout the book, developmental state theory is criticised, with state capitalism theory demonstrated to be superior. Lee Jeong-goo’s chapter is dedicated to criticising developmental state theory on its own grounds and shows that the theory not taking into account class and exploitation is the source of its weakness. Developmental state theorists fail to understand the state as a class institution and instead see it as neutral or autonomous. Thus, they fail to understand, for example, how the Chinese state acts as a collective capitalist.

Finally, Micheal Haynes notes that the error equating socialism to state property reduces capitalism to private property, whereas the distinction is alien to Marxists. Moreover, there is a grey zone between the private and state sectors. He describes state capitalism as a ‘catch-up’ economy based on technological emulation and the movement of labour from countryside to towns. Success is not guaranteed, as seen with North Korea. A core feature of such economies, like the Soviet economy, is their difficulty with technological innovation. He shows that while Japan and South Korea have caught up, China still has a way to go and is less technologically innovative than sometimes believed. Haynes argues that the development of East Asia is an example of uneven development, with its growth stifling development in other regions, such as Sub-Saharan Africa. The capitalist system is one of global competition.

This book was many years in the making and, overall, successfully draws from state capitalism theory to show how the narrowing relation between state and capital is behind East Asia’s development.

21 February 2024

ReferencesIsaak Rubin 1973 Essays on Marx’s Theory of Value (Montreal: Black Rose Books).


URL: https://marxandphilosophy.org.uk/reviews/21391_state-capitalism-and-development-in-east-asia-since-1945-by-owen-miller-ed-reviewed-by-erwan-moysan/