p “Mixed economy" is the term used by bourgeois writers over the past several decades to designate the growth of the state’s economic functions, the idea being that private and state elements are “mixed” in the capitalist economy today, and the mix is most pronounced in the sphere of property.

p In the epoch of pre-monopoly capitalism, the state owned some elements of the national wealth, too, but in the 20th century there has been a resolute shift in this sphere. First, there has been a sharp increase in the role of the state sector in virtually all the countries; and second, the structure of the state sector has undergone a change, with a growing role for the, sphere of material production.

p An expanding state sector in the economy while the bourgeoisie remains in power does nothing to change the nature of capitalist property, but the working class and its parties cannot afford to remain indifferent to the scale and development forms of the state sector, since some of its elements in education, public health and other sectors of the social infrastructure may, within limits, function in the interests of the working people. Working conditions at state enterprises may often be better than those at private enterprises. The state sector may operate as a long-term factor discrediting and undermining the positions of the private owners of the means of production. The formation of a state sector ( especially when it comes to nationalisation) and its functioning is usually an issue in acute political struggle in which the task of the left-wing forces is to unite against the forces of reaction.

p It is a characteristic fact that the government sector in the economy is least significant in the United States, a country where monopoly capital is especially strong, while reformism and opportunism prevail within the labour movement. The share of the government sector in the country’s total material national wealth in the late 1970s and early 1980s was estimated at about 20 per cent, but at least 40 per cent of the government sector consisted of diverse military installations, equipment and property. It goes without saying that the launching ramp of a nuclear missile, for instance, can be regarded as an element of the national wealth only in a purely statistical sense. The infrastructure—industrial (highways, ports, lines of communication, etc.) and social (buildings and properties 97 in education, public health, culture, recreation facilities)—is another important component of the government sector. Most of these facilities are owned by the local authorities, and not by the Federal Government. In manufacturing, the state owns no more than 1 per cent of the production capacities, and these are often on lease to private corporations.

p We find a different picture in many West European countries. In Britain, the public sector is estimated to hold 35-40 per cent of the national wealth, with the state fully owning the railways, electric power plants, the coal industry, and a large part of the enterprises in ferrous metallurgy and some enterprises in other industries. State property in France accounts for over 40 per cent of the national wealth, with the state owning, in particular, the railways, the airlines and the coal mines, nearly all the enterprises in the production and supply of electric power, gas and water, and roughly one-third of the oil refining and motor vehicle industry. The 1982 nationalisation put into the hands of the state enterprises in the leading manufacturing industries, such as ferrous and non-ferrous metallurgy, chemicals and electronics. The major banks and insurance companies in France are also a part of the state sector (since the government of Jacques Chirac took office, there has been a swing to reprivatisation). In Italy, where the state sector took shape before the Second World War and has developed since, the state has a sizable share in energetics, metallurgy, engineering and some other key industries. The state sector has a substantial role to play in Austria and the Scandinavian countries.

p State property in Japan is more akin in size and character to that of the United States than to that of Western Europe, apart from the fact that military-purpose property makes up a very much smaller share of the national wealth than it does in the United States. The state share of Japan’s national wealth is estimated at 20 per cent, but within what is known as productive capital (for all practical purposes, this means the extractive and manufacturing industries and agriculture) the figure is slightly over 2 per cent.

p Enterprises in many countries are literally held in mixed ownership: a part of the stock belongs to the state and the rest to the private sector. Such enterprises originate whenever the state buys up part of the stock of private companies, or, conversely, when state-owned stock is put up for sale. The system of management and economic activity at the mixed and even at the purely stateowned enterprises is similar to and sometimes even identical with the system under which major private corporations are run. Nowadays, for instance, there is hardly any difference between the condition of working people at state and at private enterprises, and so the working people resort to the same forms of struggle for their interests and rights both against the capitalist and against the management of state enterprises.

p However, state-owned enterprises are often used for a different purpose, namely, to supply the private sector with electric power and transport and other services at artificially low prices, while their losses are covered from the national budget. Bureaucratic 98 practices and waste are rife at state-owned enterprises.

p State property is merely one of the elements of the "mixed economy". The state and the monopolies coalesce with each other in a diversity of forms. Private arms-manufacturing corporations mainly operate under government contracts, and in exchange for their high profits and dividends they effectively transfer to government agencies some of their managerial rights. One US economist says that "what is called private enterprise is here a disguise for costly and unexamined access to the public trough".  [98•1 

p The share of so-called public consumption (procurement of goods and services by government agencies) increased on average in seven leading countries (United States, Japan, FRG, France, Britain, Italy and Canada) from 16 per cent in 1960 to 18 per cent in 1982-1984, partly under the impact of growing arms contracts, and partly from the financing of the infrastructure. In 1984, the highest figure, for Britain, was 22 per cent, and the lowest, for Japan—10 per cent. The role of the state both as buyer and customer is expected to go on growing.

p The state has the lion’s share in funding and organising R&D in all the capitalist countries. The United States accounts for nearly 50 per cent of all the outlays in the capitalist countries in this field, and in 1985, over 47 per cent of the funds came from the US Administration, which means that it provides almost 25 per cent of the capitalist world’s R&D outlays. In the United States, this sphere is militarised to an extremely high degree: in 1985, 67 per cent of the Federal Government’s R&D outlays consisted of military items, and together with spending on space exploration, in which the military element prevails, the figure comes to about 75 per cent. There is an exceptionally high concentration of R&D at the laboratories of the major corporations, for which it is the chief source of profits and influence.

p Nevertheless, US corporations eye with envy their rivals in Japan and Western Europe, where the state gives even more active support to R&D, especially in the high-technology industries. The Japanese, for example, favour their semiconductor industry with tax privileges and direct government subsidies of approximately $400 million per year. The French government provides its semiconductor industry with $140 million in subsidies per year; Great Britain, $110 million; and the FRG, $150 million. By contrast, the only direct subsidy provided by the US government to its semiconductor industry is $55 million in defence-related research funds.  [98•2  This is explained by the fact that Japan and Western Europe depend on the export of their goods to foreign markets to a greater extent than the United States, and so state activity there is largely designed to promote the monopolies’ external expansion.

p Whenever industries or private companies find themselves in financial straits or face bankruptcy, the interests of the state and the 99 monopolies tend to interweave in intricate forms. As early as the 1930s, some governments were forced to take over enterprises hardest hit by the world economic crisis. The record of the 1970s and 1980s shows that while the capitalist state does not as a rule salvage small companies faced with bankruptcy, it seeks to prevent the collapse of monopoly-type firms. Indeed, how could the US government accept the bankruptcy and liquidation of either Lockheed or Chrysler, when both these giant corporations are working on major arms contracts? The state also needs to rescue such firms for other reasons as well, such as the social dangers of leaving thousands of workers and employees jobless.

p The protracted structural crisis in railway transport in the United States in the early 1970s led to the actual bankruptcy of several private railway corporations, including Penn Central, one of the largest. In was subjected to a radical reorganisation, which took it out of the transportation industry altogether. Its railway lines, enterprises and related property were transferred in 1976 to the state-owned Consolidated Rail corporation (Conrail), which also took over five other private railroad companies. As a result, railroad transport in the United States became mixed enterprise. From 1976 to 1979 alone, Conrail received from the state $2.7 billion in the form of loans and purchase of stock.  [99•1 

p The large French company Creusot-Loire (engineering, metallurgy, etc.) provides another example of rescue operations to salvage a foundering private monopoly. Its financial condition worsened almost continuously from 1977. The rescue package was put together in 1982-1983 by the management of Empain- Schneider, which has the controlling interest in Creusot-Loire, and by bankers together with representatives of the government and of state concerns. The firm was reorganised, with the state’s participation expressed as follows: Creusot-Loire transferred to the state 20 per cent of the stock of its subsidiary Framatome (R&D and equipment for atomic power plants), as a result of which the government and Creusot-Loire became co-owners on a parity basis; the government gave Creusot-Loire a special loan of 500 million francs; Empain-Schneider provided the government with concrete guarantees with respect to the funding of Creusot-Loire, while this enabled the private monopoly to obtain additional backing from the banks.

The coalescence of the monopolies and the state is now the most important means for the adaptation of capitalism to the new conditions of world development and for its survival. However, the dialectics of development is such that these shifts simultaneously and objectively result in the further capitalist socialisation of production, thereby inexorably confronting the society with the prospect of economic and social transformations.