State-Monopoly Capitalism, monopoly capitalism featuring the combining of the strength of capitalist monopolies with that of the state into a single mechanism. The objective is to ensure monopoly superprofits, consolidate and expand the domination of finance capital, suppress the working-class and democratic movements and the national liberation struggle of the oppressed peoples, as well as to wage economic, political and ideological struggle against the world socialist system and conduct aggressive foreign policies. The emergence and evolution of state-monopoly capitalism becomes possible when monopoly domination is established in key industries of the economy. Its development is accelerated by the heightening of all the contradictions of capitalism, and of the basic contradiction of capitalism in the first instance (see General Crisis of Capitalism). The social character of production in the capitalist countries deepens under contemporary conditions, so that national long-term policies for the rates and proportions of growth, for the sectoral and regional economic structure, for the development of scientific research, for the system of education and health services, and for social security and environmental protection become necessary. 341 As society develops, dealing with the tasks involved, it invariably collides with the narrow boundaries established by private property, which is testified to by cyclic and structural crises, unemployment and the anxiety of the working people about the future, the overproduction of capital, and lack of investment in major spheres of the economy. One manifestation of the fact that capitalist contradictions are heightening is the struggle waged by the newly-free countries for economic independence, the intensification of the inter-imperialist struggle and the disruption of international economic ties. Combining its own strength with that of the bourgeois state, and instituting state (government) regulation of the capitalist economy, finance capital tries to resolve the above contradictions within the framework of the existing system. The level of development of state-monopoly capitalism is determined by the share of the national income redistributed by the bourgeois state, by the role of the state sector in the economy (see State Capitalist Property), and by the extent to which various forms of state regulation of the capitalist economy are utilised. Some of the key elements of the merger of monopolies and the state are as follows: personal union between finance capital and governmental institutions; bribing of government officials; activities of bourgeois political parties, which are in fact funded by the monopolies, etc. However, it is the activities of entrepreneurs’ unions (see Industrial and Trade Associations) that are crucial in the combining of the monopoly and state apparatuses. As it implements measures to regulate the economy, the bourgeois state pays primary attention to the general interests of finance capital. Against this background, a fierce struggle is being waged among monopoly groups for privileged influence over certain links of the state machinery and using these links to promote their own selfish interests at the expense of other monopolies. National income is redistributed chiefly in the interests of the monopoly bourgeoisie through the state sector of the economy. The state grants certain privileges to the monopolies, exempts them from paying taxes on a considerable part of their profits, and sanctions the premature depreciation writeoff of fixed capital. As a result, it is the working people who have to bear the main burden of taxes, both direct and indirect, and who suffer from rising prices caused in particular by the excessive amount of currency put into circulation. The money extorted from the people as taxes, social security contributions and loans, and that received as a result of additional emissions or accumulated in the state sector, is passed along to private capital through preferential credits, investment grants, state subsidies, etc., the provision of commodities and services by state enterprises at a discount, and receipts for government orders and state purchases. Especially large and constantly increasing budget allocations are annually spent on military purchases and contracts. The military industrial complex, which is exerting a constantly growing influence on the domestic and foreign policies of the capitalist countries, has been expanding. In recent decades supranational regulation has increased, in the form of inter-governmental agreements and the establishment of inter-governmental bodies in trade, credit, monetary relations, transport and research financing. The higher form of supranational state- monopoly regulation is capitalist economic integration (see Integration, Economic Capitalist). Today, economic life is becoming increasingly internationalised, and the influence of the international monopolies more pronounced; the entire system of state-monopoly regulation, its supranational form included, has plunged into crisis. State-monopoly capitalism is an extremely contradictory phenomenon. First, it emerged as a result of the heightening of capitalist contradictions and the system’s inability to resolve its problems by the means at its disposal. Second, it is an attempt to stabilise this system, to inject new vital strength into it; however, this is done by increasing exploitation, and that causes a fresh aggravation of the basic contradiction of capitalism. Third, the development of state-monopoly capitalism brings the socialisation of 342 production to a level unprecedented under capitalism, and results in the emergence of certain elements of centralised economic management. Thus, the material prerequisite of socialism is created; the substitution of socialist relations of production for capitalist becomes increasingly urgent.