State capitalism as Lazarus meets Loch Ness: Insights from the Asiatic mode of production

Revived forms of public ownership, enhanced market intervention by the state, more complex circuits of public finance and promotion of national corporate champions abroad combine to signal the advent of a ‘new state capitalism’ (NSC) in the twenty-first century. Beyond a catalogue of novel tools and techniques of state-market governance, the expanding academic literature equally indicates a renewed fascination with the state as an economic actor. The NSC focus therefore says as much about research proclivities and trends in the social sciences as it does about the dawn of new state forms.

There are multiple ways to divide the NSC literature, with studies located in global, comparative and business literatures on what the state does and how it does it (Alami et al., 2021; Palcic et al., 2022). Here, I focus instead on the unexamined bifurcation of NSC studies into two camps: changes in liberal capitalism and analyses of illiberal state forms. In this commentary, I explore how these two parts of the NSC universe can be characterized as Lazarus meets Loch Ness: Lazarus-like when focused on the ever-reborn market interventions of the liberal capitalist state and Loch Ness-like in its rediscovery of the resurfaced ‘other.’ ¹

In its Lazarus-like formulation, a new liberal state capitalism is said to now exist through the post-neoliberal public ownership of majority/minority stakes in the state-owned enterprises that were once directly managed by Keynesian bureaucracies (Musacchio et al., 2015: 115), or where there is a post-crisis (be this the global financial crisis, after 2008, or the crises associated with the COVID-19 pandemic, since 2020) resurgence of ‘proactive intervention in economic production and the functioning of markets’ including through new instruments like sovereign wealth funds (Wright et al., 2021: 3). New organizational forms suggest novel combinations of liberal capitalism. Notwithstanding the insights provided by these accounts, in this version the NSC literature is in danger of slipping into a Lazarus-like social science pattern where the capitalist state is miraculously resurrected as an object of study (Almond, 1988; Strange, 1996; Barrow, 2005).

In a Loch Ness-like treatment, illiberal deviants are said to have touched off new global power struggles, particularly through emerging markets’ embrace of state intervention for political gain (Szanyi, 2020). In this formulation, NSC might even signify ‘the end of the free market’ (Bremmer, 2009: 40; Bremmer, 2010). Versions of public ownership in China and the Gulf states are of particular interest/concern in this account (Bremmer, 2008; Milhaupt and Zheng, 2015). The perennial rediscovery of ‘other types’ of political economies – more terrible Loch Ness monster than protective Leviathan – are sightings that also seem to disappear and reappear with some regularity (Said, 1978).

Taking seriously Sperber's (2019: 100) assessment that NSC tends to eschew political economy in favour of micro-or meso-level questions, insights from adjacent Marxian literature might help in appreciating and overcoming these patterned limitations in NSC studies. Debate on the Asiatic mode of production (AMP), where agrarian surplus produced at the village level was appropriated through heavy taxation by centralized ‘despotic’ states in the ancient Middle East, Persia, India and China, is one such relevant adjacent literature.

Not only are there conceptual parallels between AMP and NSC (e.g. a joint focus on the power of the state in economic production and finance), but they also share particular proclivities in their respective analytical realms. Regular re-emergence of the ‘lost mode’ of AMP in Marxian theory (McFarlane et al., 2005: 297) and rediscovery of the capitalist state by NSC both reflect anxieties in political economy over: what exactly does the state do? In more nuanced versions, AMP and NSC seek to establish how state and economy are intertwined. In cruder versions, both fetishize relatively superficial less state/more state distinctions or create artificial public–private boundaries. At their most troublesome, the two concepts are in danger of Orientalism.

Given its longer span of debate and development, the AMP saga can offer three lessons for NSC studies. First, learning from the mistakes of AMP: NSC could better historicize its evidence by asking: new relative to what and where? Like Nessie of folklore, whether hoax or wishful thinking, the rediscovery of the ‘other’ is a pervasive Orientalist motif in Western literature. Despite Marx's project being the critical uncovering of exploitation in any form, the term ‘Asiatic’ has itself been criticized as a “highly colored word, freighted, at least in the twentieth century, with pejorative meanings rooted in the centuries of condescension of the West toward the East. It conveys all the negative images that the early-modern European mind associated with Asia” (Brook, 1989: 7). NSC should take care to not reproduce this focus on fetishizing other types (whether literally other countries or exhibited through a fear of alternatives to/within liberal capitalism) and should avoid duplicating debunked East/West polarities.

More generally, AMP has also been criticized for being ahistorical and for relying upon biased Western colonial sources (Dunn, 1982: 85). Even when history is the ostensible subject of investigation, ahistorical assessment can creep in. Marx once famously described China as a ‘mummy preserved in a hermetically sealed coffin’ (cited in Brook, 1989: 10), a characterization unsurprisingly rejected through subsequent ethnographic research (Bailey and Llobera, 1981: 23). NSC could better historicize its evidence by pushing its comparisons back beyond the past few decades and avoiding latent liberal assumptions of the proper role of the state in capitalism against which all other social forms are judged (Whiteside, 2022). The need for more adequate historicization and localization are also themes highlighted in Weber (2023). Hobsbawm's (1965) Pre-Capitalist Economic Formations indicates that in order to know capitalism one must understand its predecessors, and so goes for any new version of state capitalism (whether antecedent, uneven or hybrid).

Second, learning from the debate surrounding AMP: NSC could better grapple with the capitalist state but avoid reinventing the wheel (a well-established literature already exists on state theory) (Whiteside et al., 2023). Everyone loves a good comeback story, and the rejuvenation of debate on the state as an economic actor plays powerfully in both AMP and NSC literatures. Across the twentieth century, AMP experienced equal parts interest and obscurity, ranging from frenzied exegesis (stemming from differences in the Grundrisse on Asiatic property forms, an article Marx wrote for the New York Daily Tribune on China and the 1859 Preface to A Contribution to the Critique of Political Economy), to high-stakes politics (AMP was removed from the Soviet-Marxist theoretical cannon between 1929 and 1934) (Dunn, 1982). A more sustained resurgence occurred in the 1960s with more concrete historical evidence, and AMP was reanimated once more by Third World anti-imperialist movements and debates around AMP in China in the 1970s (Brook, 1989).

Within these flurries and debates, the role of the state in the economy is a notable area of overlap with NSC, specifically the debate over which entity controls economic surplus through land and infrastructure ownership. There is a basic difference between the role of the state in Marx's model of Western capitalism and in his model of Asiatic society: whereas private owners of the means of production control social surplus in capitalism, control over social surplus was said to be monopolized by the ancient Asian state (Sawyer, 1977). NSC flirts with the latter in its focus on state-owned enterprises, public finance and sovereign wealth funds in global capitalism, but the focus on state ownership of land, finance and enterprise must also be joined with an enhanced treatment of state theory and capital accumulation by drawing on well-established extant literature to avoid boasting of novelty while trodding a well-worn path. As Werner (2023) indicates, the role of the state in (re)distributing agrarian surplus remains a key question for state capitalist studies to grapple with.

Third, learning from the best of AMP: NSC should acknowledge its latent politics (whether liberal or Orientalist), and enrich its analysis of why novelty matters for the conditions of work, the extraction of surplus and the contours of democratic decision-making. As an analytical device and political tool, the dual purpose of AMP can be a helpful guide in propelling the relevance of NSC beyond academy. Despite its flaws, AMP clinches a Marxian understanding of social evolution – capitalism is neither transhistorical nor ahistorical, and each mode of production contains elements of previous orders together with opportunities for new social configurations. For the capitalist mode of production, a central bulwark against systemic transformation is the power of the capitalist state to support accumulation, legitimize the system and apply extra-economic coercion when needed to enforce compliance. The issue of what exactly is happening with the capitalist state today is therefore of utmost importance politically.

Alami (2021) argues that some forms of state property may now be driving global capital accumulation and anticipates an intensified state capitalism in the future (Alami, 2023). If AMP is to offer any insights here, it is in its assessment that ancient Asia was stagnant because of the state's stranglehold on society and that the state can act as a central figure in labour exploitation (Sawyer, 1977: 55). For Marx, the state is not an engine of human progress. With NSC literature often located in managerial studies, radical understandings of the state are largely absent – but NSC itself suggests a capitalist state thoroughly marketized and financialized. ‘More state’ in both liberal and illiberal forms does not inherently dull exploitation, reroute profits or enhance enfranchisement. NSC literature on the business of government could be joined to projects for political reform such as those that resist imperialism and ecological destruction.