Why is State Capitalism called Socialism? | LinkedIn Answers | LinkedIn
Why is State Capitalism called Socialism?
When the State controls the factors of production, the state entities are called Public Sector. This has to be one of the greatest misnomers ever invented. It is the state acting, thinking and exploiting like a greedy capitalist pure and simple.
Let me illustrate.
The state decides that Electricity is to be produced and distributed by the "Public Sector". Like a capitalist monopolist it prevents any one else competing by making it "illegal" to do so. It then loots poor farmers by confiscating their land for building power plants and other infrastructure. Where a private power plant buying land at market rates would have managed with 50 acres, the "Public Sector commandeers 1000s of acres as the land is getting "acquired" virtually free.
Then the state takes tax payer money and invests in plant and equipment with all purchases accompanied by hefty kick backs. This is exactly like over invoicing and kick backs that many unscrupulous private sector managements indulge in to steal money from shareholders of widely held companies.
The state then gives various tax reliefs and monetary concessions to its new baby at the tax payers' cost of course. It is like a capitalist giving advantages to a closely held group company at the cost of other group companies which are widely held.
The state however does not really understand the art of running a tight commercial enterprise...so the Power plant runs into losses perpetually. The state simply funds the losses from the tax payer's consolidated collections. When these run out the state simply prints more money which is inflation tax on everyone and bites the poor the most.
Capitalism without market competition is usurious exploitation and State Capitalism with the backing of State arms is all that and evil too.
Was Socialism invented by the Devil?