Portugal 1974: The Carnation Revolution Remembered First-hand

Former Waterford Glass worker, Tommy Hogan, was part of organising a solidarity delegation in 1976 from the factory to understand more about how Portuguese workers overthrew the dictatorship. He recounts the lasting impressions of this revolution from below, and points to lessons we can learn today.

written by Tommy Hogan November 20, 2025

September 1, 1973, saw a US-sponsored coup defeat the democratically elected, Marxist-inspired government of Salvador Allende in Chile.  The terror that followed sent shock waves through the international left. The idea of a parliamentary road to socialism lay buried beneath the body of Allende and the thousands of left-wing activists and sympathizers who were murdered by the military junta. Pinochet’s dictatorship would last until 1990. It so happened that a small number of Chilean refugees, part of the exodus fleeing the military dictatorship of General Pinochet, arrived and settled in Waterford.

Just nine months after this, on April 25th 1974, young army officers of the Portuguese MFA (Armed Forces Movement), staged a coup against the Caetano authoritarian regime and its handling of the colonial wars it was waging in Angola, Guinea-Bissau and Mozambique. Not only were the professional officers unhappy with the fact that they could be overtaken in promotions by noncareer officers, but they believed victory in the colonial war was impossible. The war was taking a huge toll on the Portuguese economy. Almost half of the national budget went to the military at the expense of public services and the welfare of the working class. On that day, thousands of workers poured onto the streets. Women put carnations in the rifle barrels of the soldiers, giving it the name Carnation Revolution. Watching the events on television we had no idea how things would unfold.

The overthrow of the legacy of Salazar’s 50-year dictatorship in Portugal ignited a revolution that would unfold over 19 months. Massive workers’ struggles erupted. Strikes, occupations, tenants demanding rent caps and reductions, squatters occupying empty properties – with whole working class communities taking part – made it seem like a true festival of the oppressed. The revolution changed not only Portugal but had an impact on the fascist dictatorship in Spain, hastening its end, and also on the rule of the Greek Colonels.

 

Waterford socialist shopstewards

In February 1974 a number of us were shop stewards and members of the Socialist Workers Movement (SWM), which was the forerunner of the SWN today. We were active in the first all-out strike at Waterford Crystal. This action was led and directed entirely by the shop stewards. It was subsequently declared official by Matt Merrigan, the Irish District Secretary of the ATGWU. The four-day shut down involved over 2,000 workers.

Visits to our local Waterford branch by leading national comrades of the SWM, some of whom had traveled to Portugal, kept us informed of events unfolding there. One important analysis by revolutionary socialist Tony Cliff characterised the period as “Dual Powerlessness”, because neither side, at that juncture, had the political power to impose their will.

We saw the events in Portugal, mass mobilisations of tens of thousands of workers and peasants, on RTÉ news every night. Many of the demonstrations were organised by the influential Portuguese Communist Party and the far left. The Communist Party had deep roots in the trade unions. Revolutionary soldiers and their units who commanded great respect among the people for their role in initiating the revolution would also march in uniform with the people.

In the autumn of 1974, the cutters’ section at Waterford Crystal discussed a motion, put forward by the shop stewards, which proposed solidarity with the Portuguese workers. This provided the opportunity for us to share with our members, many of whom had little knowledge of the events in Portugal, the information gained from the socialist literature we were reading. But an older conservative layer of the Glass workers trivialised our efforts to contact workers in the Portuguese Glass industry. They said that what was happening there had nothing to do with us.

However, the motion was carried in the name of  the five hundred members,  the cutters’ section of the 11/64 branch of the ATGWU. We  forwarded our motion to the workers of Atlantic Crystal located in Marinha Grande in Portugal. It would be 1976 when we got to meet with those workers at their factory.

 

International solidarity 

Early in 1975 a number of us sought leave from the company to go to Portugal to “visit” the Glass works, at Atlantic Crystal. This was agreed, but later revoked, by the company personnel manager, on the grounds it was too dangerous. Calling us to his office he said “driving into work this morning I heard on the news there is big trouble in Portugal. I will not be responsible for anything that might happen to you; you can go wherever you like on your annual leave.” He was referring to an attempted coup by far right military officers and former President Spinola.

In early 1975, the SWM hosted a comrade from Portugal for a national speaking tour. Successful meetings were held in a number locations, both North and South. In Waterford, we attracted a good attendance of Glass workers and workers from other employments. At the time we were selling two hundred copies of the monthly SWM newspaper “The Worker” in the factory, and more copies across the pubs of Waterford and south Kilkenny.

In the summer of 1976, four local branch members of the SWM, three of whom were shop stewards at Waterford Crystal, set off by car for Lisbon. As we journeyed down through the North of Portugal, we saw small peasant holdings populated, in the main, by elderly men and women, dressed entirely in black, working on their holdings. There seemed to be an almost complete absence of young people there. Portugal, not unlike Ireland, endured high levels of emigration.

The large wealthy land owners and the Catholic church, had big holdings in the South and Center of the country. These large estates (Latifundia) were worked by landless labourers.

Following the April revolution, almost two and a half million acres of land was seized, much of it by landless labourers and small holders. After the November 1975 counter coup, which saw the defeat of the revolutionary left and the consolidation of power by the more moderate military and political factions, land owners began demanding the return of land which had been occupied.  A land reform law in 1977/8 consolidated the return of this land, now deemed to be illegally occupied, to the former owners.

 

Lisbon

On reaching the outskirts of Lisbon we were taken aback to see the extent of the shanty towns. They were something outside our experience, only scenes that we had seen in Catholic magazines like the Far East with its pictures of the slums of Calcutta. The people there were literally living on the margin, with shelters made from cardboard and corrugated tin, all tightly packed together. Many were from the countryside looking for work and a better life in the city. Portugal in 1974 was one of the least developed countries in Europe and, for the majority of the population, the poorest. As the shanty towns grew so did the working class. We could only imagine what it would have been like to live there, summer or winter.

In Lisbon we made contact with members of the party of the revolutionary proletariat and revolutionary brigades, the PRP-BR. These were tough comrades prepared to take armed action against the fascist regime, and who understood that, if the revolution was to ultimately be successful, the workers would have to be armed and supported by the revolutionary soldiers. They said it would be bullets which would determine the final outcome. They were close to radical officers and the revolutionary soldiers on whom they put a strong emphasis. They had support and influence among some sections of workers and also with tenants and squatter groups.

 

Atlantis Crystal

We got the name of a worker from a factory – Atlantis Crystal – which was the famous centre of glass making in Portugal, located at Marinha Grande, a town north of Lisbon. We travelled there and were greeted with a warm welcome by comrades of the local PRP-BR, one of whom was a leading shop steward at the Glass works.

We were taken on a tour of the plant where we exchanged experiences of how work was organised, payment systems, the role of women in the factory (of whom there seemed to be few), union organisation, and the extent of control the workers had within the factory. Although the factory remained with the owners, the workers commission involved itself in operational and investment plans.

Inside the factory, there were posters in every section of Otelo Carvalho, a  Presidential candidate and  former army officer who was central to the 1974 coup. Although standing as an independent he was supported by the revolutionary left. He came second in the election, with not far-off a million votes. That evening we met with workers from the glass works and were introduced to a couple of local members of the PRP-BR.

They told us that on the morning of the revolution in 1974, they felled trees from the surrounding forest and placed them across the road, to disrupt the movement of army and police. They were armed, but the need for use of weapons did not arise. That day the inhabitants of the town and workers from the surrounding area struck work and gathered in the town center. The local police kept a low profile. There was a feeling of euphoria and excitement, the dictatorship was toppled, and now new possibilities were opening up.

They recounted how in the days following the coup and for some time afterwards, some managers and their underlings (who were in fact police informers) did not show up for work, some being driven out of their jobs by the workers taking strike action. According to official reports, in February 1975, 12,000 police informants  had been removed or suspended from their jobs, despite appeals from the socialist and communist parties for restraint. ¹

One of our comrades gave a brief talk on Ireland and again great interest was shown in the situation in Ireland, questioning us about our own organisation and the politics of the Irish republican movement. They had a number of shop stewards, members of their own organisation present and others, who were close to them.

During our brief stay in Portugal we met with many people in bars and restaurants with whom we spoke – sometimes with difficulty because of the language. With few tourists in the country, people were eager to engage in conversation. The topic was always the political situation. Once people knew we were from Ireland, we got a warm reception. It was surprising how well-informed many people were as regards the situation in Ireland. You could feel the atmosphere was still somewhat charged,and there was much discussion about what the future might hold. Concerns about the threat of a return to dictatorship had diminished.

When we sought hotel accommodation in Lisbon, there were no rooms available. We soon learned that hotels all over the city were taken over by the “Retornados”. With Portugal’s withdrawal from its colonies, very quickly over half a million many embittered and disillusioned right wingers returned to Portugal and had to be integrated into the population of 9 million. They included small business people, farmers, government officials, military personnel, administrators and their families etc.

 

Workers’ control

Within weeks of the overthrow of the regime strikes for higher wages had exploded. Occupations were commonplace in pursuit of wages and the dismissal of those who collaborated with the secret police. Over a period of 19 months, some banks were nationalised and almost a 1,000 workplaces were under workers’ control. These included not just factories but offices, hotels, clinics, nurseries, Lisbon airport, the giant Lisnave shipbuilding works and the Radio station.

Many of these were overseen by the workers commissions, while in some, workers assumed ownership, and became co-operatives.  Many sectors of the economy were nationalised, partly due pressure from the workers in occupation of their workplaces, but also to save the economy from bankruptcy.

Private schools and hospitals were occupied by teachers and doctors, some of which are still in public ownership. By October 1974, it is estimated workers had set up several thousand Workers Commissions; where these combined, sometimes including tenants’ councils, they formed a kind of nascent soviet or workers’ council.

Occupation of empty houses had begun almost immediately and continued to expand despite threats from municipal authorities, and the newly installed Salvation junta.  Radicalised soldiers had begun setting up structures similar to the workers’ councils. On a number of occasions, the soldiers refused orders to take action against the workers.

 

Reaction

There would be six provisional governments over the period 1974-6. There were several right wing coups to smother the revolution. In March 1975, one such by former President Antonio Spinola failed. The prospect of a return to fascism – the enemy that united all – saw massive numbers of workers and revolutionary soldiers mobilise against it, forcing Spinola to flee the country.

Radical officers with Communist Party backing launched a coup in November 1975, which was premature and quickly put down by the army loyalists.  The Communist Party, supported by some sections of the far left, changed tack, abandoning some of their own officers. To what extent this was preplanned is still debated. More than a hundred officers were arrested, many of whom were the leaders of the revolutionary units. Revolutionary soldiers were demoted and relegated to the reserves.  Left militants in the Lisbon area were arrested and jailed.

The ruling class had effectively recaptured a monopoly of the armed forces. The  power of the state was restored. The new rulers quickly began to denationalise some of the bigger corporations. Surprisingly, resistance was low given the recent big demonstrations and protests outside the parliament. The 25th November coup would come to be seen as the end of the revolutionary period.

 

Reformism

This was not Chile of 1973.  While the preparedness of the conservative officers within the army was underestimated, there was practically no bloodshed. However, the revolutionary groups tended to over-rely on the MFA and not focus enough on the economic struggles of the workers. This approach  prevented the deepening and development of the nascent workers’ councils, which could have been rallied to oppose the coup.

The revolutionary left also tended to underestimate the capitalist elite’s ability to divert the revolutionary movement into delivering some reforms but which fell far short of  what the movement was demanding. Also it underestimated the influence of the Socialist and Communist Parties within the working class.

The absence of an experienced revolutionary party embedded in every workplace and neighbourhood was a decisive factor in the defeat of the revolutionary forces. There was nothing comparable to the Bolsheviks in Portugal in 1975. Lacking sufficient penetration in the working class the revolutionary left was unable to call a general strike in support of the soldiers. Reformism in the shape of the Socialist Party, which Portuguese workers had no experience of, at the decisive moment of the struggle, became attractive to large sections of  the working class and among radical army officers.

 

A glimpse of revolution in Portugal

During our brief visit the high point of the revolution had passed. Yet we could still feel the excitement felt by people on what they had achieved. It was an astonishing period when people ruled themselves, taking control of their own destiny. Short of taking power the working class made great gains, including a new constitution, democratic free elections, welfare state, workers rights. These were concessions the elite had to make in order to regain the stability of the state. Working people rightly considered they had achieved a great victory, something they were very proud of, and that after 50 years of authoritarian fascism they had endured.

Many of those who participated in those momentous and historic events,  and those of us who were around at that time are now in their seventies and beyond. The story of the Portuguese workers revolution, although politically defeated, their dedication and heroism, their exercise of dual power and self-management of workplaces and communities, needs to be remembered. It needs to be passed on to the new, younger generation of revolutionary socialists, and remembered today just how close the Portuguese workers came to unlocking the  door of history and creating a new world.

Libcom.orgfiles.libcom.org/files/Portugal The Impossible Revolution.pdf

Portugal: The Impossible Revolution? - Libcom.org

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(PDF) Portugal's 1974 Carnation Revolution and nationalizations

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the 1974 revolution and the portuguese decolonization

When I think my education in Portugal and the generalized view of the former Portuguese colonies I would always learn and read about the accomplishments of the ...

Newleftreview.orgnewleftreview.org/issues/i87/articles/robin-blackburn-the-test-in-portugal

Robin Blackburn, The Test in Portugal, NLR I/87 ... - New Left Review

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On the United Front

As the turbulence of Irish politics continues and debates abound about left unity, Kieran Allen sets forth his analysis of the united front and how it applies today.

written by Kieran Allen December 6, 2025

I worked hard on Catherine Connolly’s campaign alongside members of the Irish Labour Party. Their leader, Ivana Bacik, is a TD from the same constituency. Afterwards, I was sceptical when I heard her claim that the Labour Party had become a ‘Connollyite republican party’. I thought, however, this could be tested when its councillors on Dublin City Council voted on rent hikes for council tenants. Unfortunately, my scepticism was more than confirmed when they agreed to 50% hikes for some.

All of this led me to think about left unity and left alliances. To get some help, I went back to some revolutionary classics about the united front tactic. Not that classics should be taken as dogma, because the context was very different. But they remain valuable repositories of strategies and tactics nonetheless.

Discussions on the united front tactics took place with the third and fourth congresses of the Communist International in 1921 and 1922. Two key assumptions formed the background.

1.   That there existed independent Communist parties outside the social democrats.
2.   That the tide of revolution had run out. Capitalism was in decline, and it was necessary to fight for the immediate interests of all workers.

It was agreed that revolutionaries should propose a united front to the soft left to encourage a fight on ‘the most basic vital interests of the working class’. This would involve an open invitation to their treacherous leadership. It should include a call for them to abstain from a ‘bourgeois-Social Democratic coalition’.

The slogan of a workers’ government flowed from this. The 4th Congress stated that Communist Parties should ‘state their readiness to form a government with non-Communist workers parties’. Such a government, however, should arise from the militant activity of workers. It should declare a readiness to rely on mass mobilisation to really fight the rich.

There was a lot more to it, but the key points should be clear.

It was not proposed to have a united policy block, but rather a unity geared to mobilising for immediate issues.

Moreover, unity should not come at the expense of hiding differences. Revolutionaries had to maintain their freedom to criticise and propose tactics to strengthen the mobilisations.

Revolutionaries could not be satisfied with being part of propaganda societies, which simply commented on the world. They needed to actively propose unity as a way of encouraging mass agitation.

Famously, these points were amplified in later discussions about how to respond to fascist movements. Against a ‘third period’ policy inaugurated by Stalin, Trotsky relentlessly argued for a united front of left parties. The Stalinist-controlled Communist International, however, described social democrats as ‘social fascists’ and rejected any unity with them. Through detailed analysis, Trotsky showed there was a real basis for a united front because the fascists would crush not only the communists but even moderate union leaders.

How does all this apply to Ireland today? First, the tactic of the united front cannot be reduced to being ‘non-sectarian’. It is not primarily about niceness or being friendly to rival non-revolutionary parties, although a pleasant disposition is more attractive than a bitter one. The proposal for a united front arises from the need to mobilise around specific issues which most workers want. Political sectarianism should, of course, be avoided as it is the language of despair that foregoes even the possibility of winning a mass audience.

Second, the validity and usefulness of the tactic are not decided by whether it brings together a handful of activists. In a world where social media effectively confines us to like-minded communities, it is easy to mistake a gathering of a handful of activists for genuine mass influence. Once again, the key issue is whether a united left can lead to active mobilisation by large numbers.

Third, while the focus is on unity around specific issues, some tactical sensitivity is required in Ireland. Namely, there has never been a reformist government. Instead, the domination of FF/FG in the South encourages a defeatist, ‘they are all the same’ attitude. Workers are encouraged to forge clientelist relations with right-wing politicians to get individual solutions to their grievances. We, therefore, need to convince workers to vote on left-right lines – to pose a left alternative to FF/FG.

History, however, does not follow on mechanical tracks. We have experience of ‘left governments’ in other countries – in Sweden and in Greece with Syriza.  So we must always combine a call for a left government with spelling out how such a government must be based on a mobilisation that goes far beyond existing practices, and be willing to take the fight to the rich.

Fourth, the united front tactic implies that we are working with and against certain allies. With, because we genuinely want the largest possible movements that fight for issues we agree on. Against, because every mobilisation throws up differences of tactics and strategy. Unity does not mean the most right-wing elements in any alliance get a veto over the expression of political differences.

So, how do these general points translate to, in practice?

The victory of Catherine Connolly shows there is a huge space to the left. When the candidates of the combined right-wing government only get 36% of the vote, then clearly their hegemony is under serious threat. It is not automatic, but a significant space has been opened for the left. That is, all parties on the left.

People Before Profit should engage in a major period of recruitment to expand its base. The party is a broad anti-capitalist party that does not require members to adhere to any particular revolutionary tradition. It is therefore in pole position to attract those who have, since the genocide in Gaza, opened their eyes to Western imperialism and are beginning to move away from a gradualist, reforming approach.

It also needs to relate to the sentiment for left unity while looking reality in the face. Other parties have already indicated that they will run candidates in future bye elections under their own label, rather than under a left alliance banner. However, electoral competition does not preclude a left unity around specific issues. Nor does it rule out the prospect of a vote left-transfer left pact and a public pledge not to join FF and FG.

In the meantime, let’s unite on the specific issues we agree on. We can build a broad coalition on affordability, housing or neutrality. Let’s ensure these coalitions mobilise a lot of people. And we can continue to disagree on council rents and, indeed, a host of other issues.

State, Capital and State Capitalism

As Trump mobilises the state for his purposes, Karl Elliott explains that, counter to official narratives, there is always interplay between state and capital in the way capitalism works.

written by Karl Elliott December 10, 2025

Trump 2.0: The (increasingly interventionist) Story So Far

On 22 August 2025, the Trump administration announced it was taking a 10% equity stake in Intel, making the government the largest shareholder in the US’s flagship semiconductor firm. This came just fifteen days after the president posted on his Truth Social platform: “The CEO of Intel is highly CONFLICTED and must resign, immediately”. Cue the company’s stock price falling by 3.8%. 

In between, Trump cut one of his famous deals with two of Intel’s rivals, Nvidia and AMD. In return for his mercy of staying an embargo on their AI exports to China, Trump extracted a tribute of 15% of all revenues arising from these sales to be paid to the U.S. Treasury. Pope Innocent III must surely be smiling up at him right now: tithes are back in vogue. 

In June, the government secured a “golden share” in US Steel (veto power over major corporate decisions, de facto a controlling interest) in exchange for blessing Nippon Steel’s $14.9 billion acquisition of the company. July saw the Department of Defence splash $400 million to become the largest investor in MP Materials – a California based rare earth miner that harvests minerals essential for military-grade weapons.

Add to this: Trump’s firing of the Bureau of Labor Statistics commissioner at the start of August (within hours of a jobs report release he claimed was “rigged” to make him “look bad”), his attempted firing of Federal Reserve Governor Lisa Cook at the end of August and his repeatedly expressed desire to fire the Fed Chair for not cutting interest rates fast enough. Not to mention the general chaos wrought by the president’s unmoored wielding of executive authority – tariffs, emergency powers, the trade war saga – all geared at steering corporate decisions, reshaping industries and influencing sector behaviour (covered in detail in Brian O’Boyle’s instructive article earlier this year). Put it all together, and what have you got? 

No State Please. We’re Capitalists.

State Capitalism, apparently – at least according to the Cato Institute, the D.C. based doyenne of American libertarianism. The think-tank bemoans “unprecedented government ownership of private enterprise”, quipping “state capitalism will not make America great again – it will make it unrecognizable.” The National Review laments the “lurch toward state-directed capitalism”, characterising Trump’s shakedown of the chipmakers as “the definition of extortion”. The response from the free-market commentariat has been similarly indignant: “The U.S. Marches Toward State Capitalism With American Characteristics” reads a Wall Street Journal headline, in an ironic wink to Deng Xiaoping. The article goes on to make the case that Trump is “imitating the Chinese Communist Party by extending political control ever deeper into the economy”, describing his administration’s policies as a “hybrid between socialism and capitalism in which the state guides the decisions of nominally private enterprises”.

Clearly, the American Right are up in arms that Trump has entered his interventionist era, but are they right? Is his administration guilty as charged of following the CCP’s state capitalist playbook? While that question may seem straightforward, answering it substantively implies we already know the answer to several other, related, questions. Questions such as: What is state capitalism? How’s it different from good old-fashioned private capitalism? When have we seen other instances of it? Can capitalism exist without the state? Why is it seemingly all the rage again now? Why should we as socialists care about any of these distinctions? Comparing Trump’s alleged state capitalism with vanilla varieties of capitalism, such as we have here in Ireland, may help us arrive at answers.

What’s It All About, State Capitalism?

The Wall Street Journal’s “hybrid” framework of state capitalism conceives of economic systems on a spectrum with ‘pure’ free-market capitalism on one end, ‘pure’ socialism on the other, with state capitalism somewhere in between. This view takes capitalism (vs socialism) at its core to be private (collective) ownership of the means of production, exploitation (coordination) of labour, production for profit (for social need), competitive accumulation (distribution according to social or economic priorities) and a virtually non-existent (central planning) role for the state in economic life. 

The need for the state in capitalism, in this version, is thus negligible: enforce contracts, secure property rights, maintain order and basic infrastructure, and otherwise stay the hell out of the way. It’s basically there to be the referee. But in reality, the interplay between state and capital is much deeper. With state capitalism, the state pulls on the jersey and comes onto the pitch as a deep lying playmaker. Sure, all that good, fun stuff that dyed-in-the-wool capitalists love remains: the exploitation of workers, the extraction of surplus value, the accumulation of capital, etc. But the state also intervenes in economic affairs as investor, as owner, as director. In addition, there are shiny bonus features: a powerful domestic state bureaucracy operating in line with the ruling class, and heightened imperialist rivalry with other foreign state capitals. Ostensibly, it may appear plausible that the distinguishing feature of state capitalism is a more active, muscular state – counterposed against a hands-off, minimal state under its earlier and different capitalist versions. Think of the middle of last century so called Soviet Russia, US War Production Board during WWII, postwar East Asian development states. But there are good reasons to be sceptical of the claim that the state, under classical capitalism, is distinct from the capitalist system itself. 

For starters, this portrayal of the state as passive, supervising “night-watchman” under capitalism is a mirage. The state is not just some neutral, free-floating structure above society. It never has been. For proof that the “hands-off” capitalist state notion is a myth we don’t need to skip ahead to Stalin or Japan and South Korea in their industrial heyday. We need look no further than the cradle of modern capitalism itself – Amsterdam 1602 and the founding of the Dutch East India Company (VOC). The story of its formation isn’t just about the birth of commercial corporations and their instruments of capital and conquest (shares, dividends, permanent incorporation, multinational operations). It’s the cautionary tale of how capitalism was, from the start, a state project. Whether it’s the granting of the firm’s charter by the States-General of the Netherlands (to seventeen of the most prominent merchants and regents forming the board), the fact the firm was vested with sweeping sovereign powers (rights to wage war, mint coins, negotiate treaties), or the Dutch state’s use of the VOC as the armed wing of its mercantilist, colonial strategy for securing spice routes and underwriting imperialist expansions – the conclusion is inescapable. The entanglement of state power and corporate profit is essential to capitalist development. As the tech bros say: It’s a feature, not a bug.

Bonnie and Clyde. Captain and Tenille. State and Capital.

We shouldn’t satisfy ourselves with simply pointing to historical examples of this Bruderkuss between state and capital. The bigger question is: why this structural independence, with each feeding off the other, which neither appear capable of easily escaping? Over the decades, there have been several influential attempts to answer this question and to lay out the logic underpinning the co-dependency. Some common themes emerge. 

First and foremost, under capitalism, they rely on each other to survive. To keep the show on the road, the state depends on capital for resources: specifically, tax revenues; more generally, capital accumulation. Act against capitals’ interests and they might just defect, taking their productive assets with them. Thus the approximately half trillion dollars in annual corporate tax receipts acts as a limiting constraint on Trump’s strong-arm tactics against US firms. 

If the state is prudent, it avoids concentration risk and diversifies across a broad base of industries and geographies. If instead the state is run by Fianna Fáil and Fine Gael, it relies on three US firms for 38% of all corporation tax take, leaving us in hock to these private tyrannies for the foreseeable. Apple, ECJ, €13 billion – need I say more? Likewise, individual capitals’ success depends heavily on their ability to influence state policy. Firms in a particular country are all too aware that their success rests, in large part, on their ability to influence the state to manoeuvre any number of variables in their favour (labour costs, borrowing rates, foreign-exchange rates, public sector contracts, protectionist trade barriers). Despite the seeming Damoclean sword (of companies hinting they might up sticks) hanging over the state’s head, in reality firms usually have strong economic and legal reasons for being there in the first place. Tearing up finely tuned supply chains and restructuring operations elsewhere tends to be a guaranteed way to torch profits. Far better to ingratiate oneself with the great and the good of the state, and gently nudge them toward the ‘right’ decisions. 

It’s A Big Club. And You Ain’t In It.

Leading us to a second main reason for suspecting state and capital can’t be kept discrete: people and relationships. Any capitalist worth their salt has a contact book brimming with movers and shakers of the state. Any up-and-coming apparatchik hungry for high office needs to be seen as au courant with the captains of industry. This dynamic has intensified under Trump, where the ‘revolving door’ has spun so fast, it’s practically a carousel: Scott Bessent and Howard Lutnick in from Wall Street hedge fund and brokerage firms as current Secretaries of Treasury and Commerce, respectively. And in the other direction: Rick Perry rejoining the board of Energy Transfer LP (a leading mid-stream oil and gas company) in January 2020, having previously resigned from the same board in 2017 to become Trump’s Secretary of (you guessed it) Energy.

Such flagrant jobbery might even make our ruling class here blush. Here in Ireland, we’d like to think of ourselves as a little more demure in our patronage – rationalising decades of policy outcomes favouring corporations over the public interest as the result of a broadly ‘pro-enterprise’ ideological orientation of senior civil servants and the personal connections and tight interlocking networks they form with private sector leaders in the course of crafting policy. Or to translate all that bureaucratic waffle: lobbying (legalized, codified corruption) and old boys clubs (nod-and-a-wink, sanctioned cronyism) guaranteeing business-as-usual carries on. 

It might not be a perfectly geometric circle on Google Maps connecting Clongowes, Smurfit, IFSC, Ibec and Leinster House – but it’s undeniably a golden one. Although, now with the two most recently retired Taoisigh exiting stage left to join the boards of a private equity company and an American PR firm, respectively – not to mention the Minister for Finance resigning last month to take up a $600k-a-year tax-free job at the World Bank, months after serendipitously increasing the government’s annual contribution to the organisation by 33.5% – the revolving door is starting to creak ever louder on this side of the Atlantic. But it’s not just connections solidified by education, socialising, in-marrying and nepotism that unite businesspeople and state bureaucrats: it’s their shared status as members of the ruling class. Even if state bureaucrats don’t personally hold shares in their IBKR portfolios, they’re still forced to operate as agents of a capital accumulating class. The continued existence of their stratum depends directly on continued capitalist exploitation. Without it they can’t fund their own privileges and functions. Like it or not, under capitalism, they can’t be autonomous. The senior civil servant’s interests are inherently aligned with those of the corporate exec that they golf with – and both are against the interests of the working class.

Crisis (State) Capitalism

Nowhere is the proof of this alignment of interests among the ruling class more evident than in that essential feature of modern capitalism: the dig-out (or for American-English speakers: bail-out). Is there anything more nailed on, in times of crisis, than the state riding in on its white horse to save the day? The 2008 Great Financial Crisis brutally exposed this. IBRC, NAMA, TARP, TBTF … you name the crisis, the state reflexively intercedes to deliver life-saving resuscitation to capital (along with a jargony four-letter acronym to obscure the true nature of the heist).

Libertarian ideologues might talk a good game about the perils of state interference in free markets. But their Cassandra warnings fall silent whenever the threat of systemic financial collapse drives them back into the forgiving arms of their mother states. In breaking news: capitals will in fact turn to the state (to whom they’re paying protection money) to defend their competitive and economic interests. And in the current epoch of Too Big To Fail corporations (where the fall of any one of the technofeudalist mega-corporations would trigger a domino effect bringing them all down), states have no option but to intervene. The alternative – millions of their citizens losing their livelihoods, imminent collapse of the prevailing order and the loss of revenue and power that threatens to accompany widespread economic collapse – is simply too dire to contemplate. These interventions are rare, temporary exceptions, we’re told. But these are the exceptions that prove the rule that a minimalist role of the state in capital is undesirable for both. Likewise, capital needs to be backstopped by something else that only the state can provide: what Chris Harman referred to as “local monopolies of armed forces” that can prevent their geoeconomic rivals from “using direct, Mafia style violence” against them. Only the full might of the state’s arsenal can keep the foreign wolf from the corporate henhouse. 

It’s these insights about the fragility of the capitalist system – unbridled corporate leviathans, superpower rivalries, geopolitical tensions – that are key to understanding the resurgence of state capitalism. China has long been its poster child over the past three-quarters of a century. And you don’t need to have been listening to many Trump speeches to realize it’s his bête noire. China has transformed utterly, from Mao’s largely subsistence-based agrarian economy modelled on the Soviet Union, to a nation that can boast the following accolades: world’s largest exporter, largest energy consumer, second largest economy (one-fifth of global GDP). All achieved through systematic, long-term orchestration of state capitalist power over capital accumulation and exploitation (terms not in the Chinese official version) under the tightening grip of the CCP – and increasingly blurring the boundaries between public and private.

When your whole shtick is that you’re going to Make America Great Again, these challenges to your political, economic and military interests are a direct affront. No mafia boss just sits back and allows a rival family to take over. And if you can’t beat them, join them. But analysis of Trump’s seemingly erratic attempts to reset the global economic order back in America’s favour should go beyond a shallow inference of an impetus to emulate China’s success. The deeper question is: what features intrinsic to capitalism are forcing this global tendency towards competitive state capitalism?

Neoliberal decay

First, the accelerating decay of neoliberalism. The spectre of economic stagnation haunts the markets. Exponential growth on a finite planet, with finite resources and markets to expand into, is destined to end in increasingly antagonistic, nationalist competition. From an average of roughly 10% per annum for three decades from 1980 on, China’s yearly growth rate is down to below 5% today. The US meanwhile has limped along at 2-3% growth this century. The law of diminishing returns to scale. Both nations have staggering national debt burdens, continually exacerbated with stimulus packages and quantitative easing (money-printing) to eke out these dwindling GDP rates. There are structural limits to mature capitalist economies as markets get saturated and overall rates of profit decline.

All of this necessarily results in intensified competition over trade, investment and technological superiority between geopolitical rivals. What emerges is a kind of Game Theory in an increasingly multipolar world, with states monitoring each others’ policy moves and making strategic changes to their own in response. Which is why you can’t open the newspaper these days without encountering tariffs, embargoes, export bans, border controls and other such artifacts of state interventionism. History has repeatedly shown us that the rise of aggressive economic nationalism often precedes the erosion of any meaningful boundary between corporate interests and national security. 

A case in point: Taiwan. Despite being an island of just 36,200 square kilometres, it has become a crucial pawn in this inter-imperialist struggle. Not only is it caught in the cross-fire of the militaristic sabre-rattling of both Washington and Beijing, but as home to the world’s largest producer of semiconductors (TSMC), it has also taken on an outsized strategic importance as the superpowers vie for access to the precious silicon increasingly regarded as an existential necessity in the rapidly escalating AI arms race. Geoeconomic rivalry is once again the new norm.

State capitalism?

So, to return to the initial question: is the Trump administration guilty of State Capitalism? Fixating narrowly on this probably misses the wood for the trees. It’s in attempting to answer the series of related questions posed earlier in the article that we can deepen our understanding of the state’s role in capital. State capitalism might best be viewed as a mutating feature of the capitalist mode of production, rather than a distinct mode of its own. All the classical elements – the private property, the exploitation, the accumulation – are still there. But this variation involves a brawnier, more overt state with explicit imperialist aims, no longer content with remaining hidden in the engine room. This mutation may express itself differently across time and place. Trump’s “Daddy State” economics may appear more volatile, transactional and opportunistic than the carefully orchestrated, tightly planned, systemic (Chinese) or coercive, bureaucratic (Soviet) variants that have gone before. But what links them all is a ruling class sitting at the top of society and a powerful overlap of interests and personnel between those who preside over capital and state office alike. While history may well look back on Trump in his second term as an accelerant of state capitalist dynamics in the midst of neoliberal decline and inter-imperial multipolarity, it’s important to recognize that the history of capitalism is the history of the state constituting capital. To paraphrase Sinatra – under capitalism – state and capital go together like a horse and carriage. Our job as socialists is to bring about the conditions where you can have one without the other – or a state that pulls for workers not capitalists.