Essay: State-capitalism and the idea of freedom

September 13, 2022

From the September-October 2022 issue of News & Letters

by Urszula Wislanka

Lea Ypi, in her new book, Free (W. W. Norton & Co., 2021), asks a most pertinent question for today. Ypi grew up in the 1980s and 1990s in “socialist” Albania, with its worship of Stalin and Enver Hoxha. She then experienced its 1997 transition to Western-style private capitalism, which called itself freedom. Living through both systems compelled her to ask, “What is freedom?” To work out the answer, she chose to study philosophy, specifically Kant and Hegel—and, through them, Marx.

From her experience, it was clear to her that freedom was not a “socialist” Albania; but neither did she find it in private capitalism. Her book sets out to explain the inadequacies, the lack of freedom, in both systems in terms of the lives of people she knew. She presents ideas in the way they are manifested in real human beings who were the products of social relations for which they were not responsible. Yet they still tried to rise above the limitations they encountered.

In a rich narrative she makes many points as she recounts her childhood. I will take up just one: the availability of consumer goods. In both Albania and Poland, as I know from my own experience, whenever anything was delivered, or even expected to be delivered to a store, long queues formed. Whatever it was, you would surely need it and you queued up. Ypi describes an elaborate set of rules for keeping your place in the queues and the form of solidarity that developed as a result of meeting people there, who often became lasting friends.

During the ongoing pandemic in the U.S., much ado was made out of panic hoarding and the lines that formed to get toilet paper. In the early 1960s, when I was maybe 10 years old, I remember lining up in a queue as I was coming home from school. The queue turned out to be for toilet paper. I had no means to carry the 10 or so individual rolls home. Another person in the queue gave me a string, so I could hang the toilet paper as a necklace to take home. By and large, people felt that we—normal people, not high party members—were all in the same boat and helped each other.

We were constantly fed propaganda that we were building socialism and that sacrifices were necessary. The differences between the “degenerate West” and “socialist” countries were continuously pointed out. “Socialism” prided itself on having no unemployment. Everyone was assigned a job, everyone experienced the same lack of goods to buy with their wages.

As you are growing up, you accept that this is how things are. The rhetoric of “building socialism,” as a society where everyone is equal, has some appeal. The vaunted equality was experienced as the same shortages for almost everyone, though not for the party functionaries who had their own access to necessities as well as luxury goods.


The availability of consumer goods in the West as shown on TV, etc., was a dream, but did not have much bearing on the reality of life. Neither Ypi nor I felt that goods were the important aspect of life that was missing. But it was really obvious to everyone that the Plan, planned production, was decided by the state, a body above “normal” people.

What was the actual nature of society in East Europe? In 1964 Jacek Kuron and Karol Modzelewski wrote an “Open Letter to the Party.” They were firm in their opposition to Western capitalism, yet they did not shrink from calling the party bureaucracy in Poland “the red bourgeoisie.” They were promptly arrested and imprisoned, their letter confiscated. But the truth cannot be so easily silenced.

Decades earlier, in 1941, Raya Dunayevskaya wrote, “The determining factor in analyzing the class nature of society is not whether the means of production are the private property of the capitalist class or are state-owned, but whether the means of production are capital…”[1]

Marx makes abundantly clear that neither money nor machinery is in and of itself capital. Capital is a specific social relation. The specific nature of capitalist relations is that workers are “free” in a double sense: freed from their previous social relations—of bondage, serfdom, etc.—and freed of any material means of making a living. Workers have to sell their abilities—expressed in their life activity, their labor—as a commodity in order to purchase the necessaries of life, which are also produced as commodities.

In Vol. I of Capital, Marx warned that the ultimate capitalist accumulation and concentration would be reached when all capital in a given society was in the hands of one capitalist or one capitalist entity, but that concentration would not alter the specific nature of capitalism. Capitalism itself changes: from competition between various capitalists evolve monopolies. The “ideal” for capitalism is to have a single, planned production. The difference is not between “market anarchy” and “planned production.” The difference is between the despotic plan of capital—whose only window on reality is abstract, alienated labor—vs. the plan of freely associated people, whose life activity, their labor, is inseparable from their genuine participation in, their contribution to the recognized creation of themselves and society.


In Vol. II of Capital, Marx takes up the perspective on capitalist society visible to economists, i.e., circulation. He reiterates over and over that all phenomena observed in circulation have their roots in production. But to make the specific working of capitalist circulation very clear, he divides production into Department I: production of the means of production, and Department II: production of the means of consumption. He makes the point that production of the means of consumption cannot be greater than the means of subsistence for labor plus the luxuries for the ruling class, such as party apparatchiks.

Toilet paper necklace

He shows in great detail, and with many examples, that the way capitalist production grows, once it takes over all previous forms, is by expanding production of the means of production at the cost of investment in producing the means of consumption. Thus the queues.

Raya Dunayevskaya in the 1940s used official Russian statistics in their published production plans to prove the specifically capitalist nature of production in “socialist” Russia. For people living in Albania or Poland, this fact was directly observable in the perennial shortages of the most basic consumer goods.

Creating the theory of state-capitalism allowed Dunayevskaya to not only describe the objective class analysis in “socialist” countries, but to point to the specific nature of workers’ revolt: “the low labor productivity of the Russian worker[s] is not a sign of [their] backwardness but a sign of [their] continuous revolt against the conditions of production…” (Marxism and Freedom, p. 234.)

This, too, was obvious to ordinary people. A popular quip in Poland was “they pretend to pay us, we pretend to work.” (Pay, of course, was not only the amount of money, but the inability to purchase basic necessities.)

The theory of state-capitalism was necessary to make sense of the post-1930s world. It allowed Dunayevskaya to see it not only as a Russian phenomenon, but as a new world stage of capitalism. World War II revealed state intervention as indispensable in all capitalist countries. The economy has never been separate from politics. But with the Great Depression, it became obvious that capitalism cannot function without both state support and state terror culminating in permanent war.

The collapse of capitalist production, manifested in the decline in the rate of profit and economic crises, resulted in the rise of fascism and led to World War II. We are again witnessing such a collapse. Capital goes on strike and politically this appears as a new rise of fascism from Trumpism in the U.S. to Putin’s invasion of Ukraine.


Just as in the 1940s, capitalist response to economic crisis is permanent war. Everyone knows that the current reality is unsustainable. What is in doubt, what needs an answer urgently, is the question Lea Ypi asks: What is freedom? She doesn’t provide an answer.

Social solidarity, such as what she saw among the people in the queues, can be the beginning of freedom. The very name of Polish opposition to state-capitalism in 1980-81 was “Solidarity.” But it can get fixed and then transformed into its opposite. When Solidarity came to power in 1989, it was just an echo of 1980, and by now it is a complete travesty of that original impulse.

A different way to organize society appears spontaneously in many forms. Right now we are witnessing pretty fundamental, and totally unexpected, new social relations in Ukraine. The whole population—Ukrainians, Russians, Jews, men and women—rose up against Putin’s invasion and his attempted genocidal erasure of their national identity. National consciousness, that is not nationalism (as Frantz Fanon pointed out), can be a manifestation of the idea of freedom in the form of a new humanism.

The social solidarity we witness in Ukraine can become full freedom if it goes beyond its opposition to the immediate conditions, the Russian invasion, and derives its meaning from its own free association, its own social solidarity capable of challenging the internal barrier within capitalism: the abstraction of socially necessary labor time in things as the only objective window on reality and social existence.

This abstraction, which mediates our human relations and perception of reality, cannot be overcome by even the most profound economic analysis (like the theory of state-capitalism). Discovering that labor is the source of value could not get us out of capitalism, because for the economists who discovered it the only labor that “counts” is abstract labor measured in time attached to things humans create (the definition of fetishism).


“Abstract labor” is a total fiction. For Marx, objectivity is not this religious fetishistic belief. Objectivity emerges from human activity itself as humans engage an “external” nature, their “inorganic self.” Marx saw possibilities for such a new sense of objectivity to arise in multiple movements of his day: the Parisian workers in 1844, the slave revolts in America as well as the rising of serfs within Russia, and the self-organization of the 1871 Paris Commune. Every one of those movements clarified for him that a new social reality can emerge only when: 1) the masses create those new moments of social solidarity and 2) that they are recognized as a moment in the process of our development, the self-realization of the idea of freedom.[2] Freedom is not a goal, in the sense of something fixed, but the self-recognition of positive humanism, forever changing, unleashing human capacities in ourselves and in nature.

At every point in human history, freedom demands we face the power of the abstractions that mediate our reality and overcome their fixity. Today humanity is facing an absolute abyss.

As the recent News & Letters essay cited above puts it:

“Ours is a time of extremes, a time of multiple total crises—ecological, economic, political, including a genocidal scapegoating of minorities, and multitudes crossing borders everywhere, searching for freedom and survival. Ours is also a time of widespread despair and hopelessness about the future in the face of a 1930s-style, globally stalled capital accumulation with its political devolution into other-hating fascism, fomenting new forms of genocide and ever new realignments for another round of total war…

“Dunayevskaya, who had long called ours an ‘age of absolutes,’ posed… a task for each generation to recreate the revolutionary dialectic anew and meet the challenge not only from practice but from the self-development of the Idea.”

The Marxist-Humanist theory of state-capitalism is no mere objective analysis of a new stage of capitalism. It is a return to the idea of freedom that shaped all of Marx’s work. Ypi’s turn to philosophy to reinvestigate freedom as a universal is another sign that realizing the idea of freedom, and recognizing its self-development, is the most concrete pathway to meeting the challenge of our time.

[1] “The Union of Soviet Socialist Republics Is a Capitalist Society” by Freddie James (Raya Dunayevskaya), Feb. 20, 1941

[2] “Marx’s Demystified Dialectic and the ‘New Society’” by Ron Kelch, News & Letters, Jan.-Feb. 2022.

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