Genuine question
Edit: change the title from “Why can Socialist Market Economy be categorized as socialism, and why is NEP categorized as state capitalism?” to “Why can Socialist Market Economy be categorized as socialism meanwhile NEP is categorized as state capitalism?”
The answer is simple, state capitalism isnt a thing, the term mean literally nothing. NEP was just socialism in a particular place at a particular time doing what needed to be done to develop the productive forces, if something like it existed today it would probably be called market socialism the term just wasnt in use then if it even existed, and also market socialism probably doesnt sound as bad as state capitalism and the whole state capitalism is something “left “communist”” came up with to insult the USSR.
Seriously state capitalism is a completely useless term, its so poorly defined it describes nothing and people should really stop using it.
It does have a meaning but yeah its kinda missleading, most people just assume is “state doing capitalism” when it just means that the state holds all the political power under a DotP not the capitalist class.
lets take the example of france and china, under the first definition, “state doing capitalism”, both France and China could fall into that category since both have important SOEs and operate under a market economy.
But under the second definition, only China can be categorized as a state capitalist since even though capitalists exist in China, they hold no political power.
Correct me if i am wrong but im pretty sure Lenin originally said that in defense of the USSR and it policies in the face of criticism by left communist, he didnt originate the term nor the criticisms associated with it.
My point is state capitalism is not necessarily useless term exclusive to left {anti-communists} like you indicate it is. It’s also a matter of life description.
Seriously state capitalism is a completely useless term, its so poorly defined it describes nothing and people should really stop using it.
That being said, fine, market socialist
These are not mutually exclusive and could be used interchangeably.
“State capitalism” means that the state, under a dictatorship of the proletariat, holds all the political power not the capitalist class. Both the USSR during the NEP, and China now, can be called state capitalism. Both can also be called socialist because the state directs the economy towards the development of production through a market system.
Personally, I would say state capitalism, in the NEP/Lenin usage, and socialism, are different.
The proletariat seizes power by expropriating the largest enterprises which already have socialized production to use as the basis of socialist society. However, it logically follows that in order for this to lead to the proletariat having a dominant position in the economy, for public enterprises that operate for the interests all people to be the principal aspect of the society, then those large enterprises must have already dominated society prior to their expropriation.
If you nationalize the biggest enterprises in a country where there really are no big enterprises and so industrial big bourgeois capital does not actually dominate society, then you will not end up in a dominate economic position after nationalizing them. You would be nationalizing what is ultimately a secondary, subordinate set of enterprises which play limited role in the economy as a whole.
When Lenin talked about the NEP being capitalist, he said that Russia at the time was overwhelmingly dominated by “petty-bourgeois production.” That means even if he nationalized the biggest enterprises, the dominant aspect of the economy will still be the small enterprises and not the big enterprises, and even those “big” enterprises, he said many were not even currently operational due to the war.
The socialist market economy exists in a country where big enterprise does dominate society so there is actually a material foundations for building a socialist society, but small enterprise still exists in a significant degree, just in a secondary, subordinate position.
Because socialism is based on big industry and big industry did not even predominate yet in 1921 Russia. There could hardly even be said to be “commanding heights of the economy” because even the biggest enterprises played a minor role in the economy. It was a largely peasant country overwhelmingly dominated by small commodity producers and petty-bourgeois enterprises.
The question arises: What elements predominate? Clearly, in a small-peasant country, the petty-bourgeois element predominates and it must predominate, for the great majority—those working the land—are small commodity producers.
It took time for the size of the proletariat to grow and the size of public enterprise to grow enough so that the public sector could actually be meaningfully said to be the mainstay of the economy. Even the little bit of big industry they had, some of it was stalled due to the war.
The NEP was characterized as state capitalist to differentiate it against the lower stage communist stage that was supposed to come afterwards. Lower stage communism was a particular definition for socialism used by Lenin.
Lenin would not consider the “Socialist Market Economy” to not be “socialism proper” i.e, not lower stage communist. However, he may consider the SME to be socialist in the same way that the Union of Soviet Socialist Republics was during the NEP… that is, aspirationally socialist (willingness to realize Communism) or a proletarian dictatorship.
Reading: https://www.marxists.org/reference/archive/stalin/works/1928/12/28.htm
Because Socialist Market Economy refers to the whole economy, in all its working organizations and policies.
And NEP is a specific policy of market liberalization, which, with resources, investment, and productive forces of industry and agriculture, help develop and keep up to speed the USSR’s socialist economy, during such period where it was left with semi feudal economy and the Civil War ruins
