2 Theories, Tensions, Controversies

In the face of wide-ranging transformations in the modalities of state intervention (such as those documented in the previous chapter), social scientists, political commentators, and geopolitical analysts have argued that we are currently witnessing a resurgence of state capitalism under a new form. However, despite the widespread mobilization of the concept state capitalism for both categorization and explanation, there is neither consensus about what it exactly means, nor about its implications. Scholars have deployed the concept (and cognates) to designate a national variant of capitalism (Nölke, ten Brink, Claar, and May 2015), a new brand of SOE and/or state-sponsored investment fund (Lyons 2007; Musacchio and Lazzarini 2014), a particular type of state–business relation (Zhang and Whitley 2013; Nölke 2014), a threat or an alternative to (Western-dominated) (neo)liberal capitalism (Bremmer 2010; McNally 2012), a reconfiguration of the global ‘state–capital nexus’ (van Apeldoorn, de Graaff, and Overbeek 2012), the use of market mechanisms for the promotion of geoeconomic and geopolitical goals (e.g., Kurlantzick 2016), and ‘an economic system in which the state uses various tools for proactive intervention in economic production and the functioning of markets’ (Wright, Wood, Musacchio, et al. 2021, 2). Hence, the term not only lacks a unified definition, it refers to an extremely wide array of practices, policy instruments and vehicles, institutional forms, relations, and networks that involve the state to different degrees and at a variety of levels, time frames, and scales. While this proliferation of competing definitions and loose conceptualizations is not necessarily problematic, it nonetheless warrants a heightened level of reflexive scrutiny.

This chapter critically engages with the theories, tensions, and controversies surrounding the study of state capitalism. We frame our analysis around a simple question: how has the new state capitalism been theorized and explained? In exploring this question, we synthesize and critique the key arguments in three bodies of literature: strategic management, comparative capitalism, and global political economy. We focus in particular on the arguments that scholars across these bodies of literature have made concerning the specific properties and novel features of the new state capitalism, its drivers of emergence, its location, its polymorphous character, its outward orientation, and its relation to the Western-dominated liberal capitalist world order.

We note that the loose, if not imprecise, conceptualizations of the category have allowed it to become some sort of ‘banner to unite under’ for a number of commentators with extremely different theoretical outlooks, methods, and objects of inquiry, which we welcome. Indeed, it has opened the possibility for a critical dialogue that could lead to a more holistic account of the changing role of the capitalist state at the current historical juncture. Nevertheless, we raise concerns about the concept’s analytical value. This is an issue we briefly mentioned in the introduction in our comments on the current state of state capitalism studies, but now fully explore in its theoretical and epistemological dimensions. There have been, in particular, difficulties theorizing how state capitalism differs from other forms of capitalism, as well as problematic geographical assumptions concerning the nature and scale of state capitalism. These have significantly hampered efforts at explaining the rise and significance of present-day state capitalism, and in some cases led to analytical impasses as well as surprising silences and omissions.

In the strategic management, international business, and comparative corporate governance literature, state capitalism is seen as a particular organizational and governance form in emerging and transition economies. Hence, it is worth clarifying that debates in this literature are actually not about capitalism (understood as an historically specific mode of production). Rather, they are concerned with firms where the state plays a strategic management role, or put differently, in state ownership or control of capital. Management scholars argue that there has been a transformation of the ‘well-known model of state capitalism’—by which they refer to wholly owned state-owned enterprises (SOEs) ‘as extensions of the public bureaucracy’—into ‘new models’ (Musacchio and Lazzarini 2014).

What is fundamentally new about those models is that ‘since the late 20th century … [state versus private] ownership boundaries are not fixed’ (Peng, Bruton, Stan, and Huang 2016, 298). SOEs have become ‘hybrid organizations’ (Bruton, Peng, Ahlstrom, et al. 2015), where states own majority or minority equity positions in firms, or what has been termed ‘partial state ownership’ (Inoue, Lazzarini, and Musacchio 2013). Moreover, various ‘marketized’ forms of state ownership and control (Li, Cui, and Lu 2017) have gained in importance, such as state-owned holding companies, SWFs, state-controlled pension funds and life insurance funds, national development banks, the provision of strategic support to private firms using subsidized credit and/or other forms of support and protection to stimulate new firm capabilities and upgrading, and the facilitation of merger and acquisitions in strategic sectors. In short, the ‘new form’ of state capitalism is characterized by ‘market orientation’ and by ‘increasing globalization’ (Grosman, Okhmatovskiy, and Wright 2016, 202). Management scholars suggest that those various forms of state-controlled and state-directed capital deserve attention because they are ‘thriving’ not only in their home countries but also in the global economy where they are ‘taking center stage’ (Musacchio, Lazzarini, and Aguilera 2015).

Indeed, one of the main concerns of this literature is to explain ‘the centrality and longevity of SOEs as an organizational form in the global economy’ (Peng, Bruton, Stan, and Huang 2016, 312, emphasis added), as illustrated by the various data points mentioned in the introductory chapter of this book. Management scholars consider this a new research puzzle, insofar as the literature previously assumed SOEs as temporary organizational forms (Grosman, Okhmatovskiy, and Wright 2016). From that conventional perspective, SOEs are relics of central planning destined to be privatized as countries liberalize and transition to modern market economies. Hence, the central research question: ‘what contributes to their ability to survive and, in some cases, prosper?’ (Bruton et al. 2015, 93).

The second main research puzzle is to explain how SOEs are performing at least equal to, if not better, than private companies. Again, what must be emphasized is that the conventional management literature on SOEs predicts that the latter will, as Musacchio, Lazzarini, and Aguilera (2015, 116) remark, ‘underperform their private counterparts under almost any circumstance’. This is due to what the literature calls ‘the liabilities of “stateness”’, which broadly refers to how ‘dysfunctional political interference’ negatively affects firm-level economic performance (Megginson and Netter 2001; Megginson 2017; for surveys on the performance and efficiency costs of state ownership, see Estrin, Hanousek, and Svejnar 2009). The key concern is with the economic performance at the firm level of various types of organizational and governance arrangements involving state ownership or control.

Importantly, this is also what frames the interest of the management literature in diversity/variety. The literature is concerned with three types of diversity: (1) various forms of state ownership/control (or what is sometimes termed ‘organizational diversity’), (2) different outcomes in terms of firm performance, strategy, and organizational effectiveness, and (3) different country-level institutional arrangements. Though it is important to underline that, in contrast with the comparative capitalism literature examined in the next section, country-level institutional diversity is only examined inasmuch as it affects the previous two types of diversity. For instance, Musacchio, Lazzarini, and Aguilera (2015, 116) seek to ‘identify the institutional conditions that will affect the performance of each type of state capitalism’; Bruton et al. (2015) examine how (national) institutions affect the systems of governance, and hence the incentives that board members and executives face; and Meyer and Peng (2016, 6) argue that ‘[w]ith respect to state ownership, differences in political systems translate into substantive differences in the objectives, governance structures, and top management team composition in SOEs’. The cognate field of international business follows a similar approach: it is concerned with ‘how organizational diversity of emerging economy SOEs derived from macro-institutional reforms [encompassing administrative and fiscal decentralization, privatization, market liberalization, and industrial restructuring] can extensively impact their overseas venturing strategies’ (Li, Cui, and Lu 2017, 998).

Overall, this literature is concerned with how variegated institutional change is ‘a driving component of SOE strategy [encompassing institutional logics and strategic objectives, capabilities and patterns of resource allocation, and internal organizational dynamics] in emerging economies’ (Li, Cui, and Lu 2017, 998). It explains diversity as follows: institutional variety at national and local level leads to organizational diversity of SOEs at field-level, which in turn lead to differing firm-level strategies (for instance in terms of overseas investment). Moreover, while this literature provides excellent ‘thick’ descriptions of the evolution and path-dependency of state control in particular countries, it is little concerned with theorizing the reinvention of state-owned capital, its nature, and the extent of its diversity beyond firm-level and across national contexts.

These debates in the management literature, particularly the most recent, have made important contributions to the study of state capitalism inasmuch as they challenge the stereotypical view (prevalent in the wider management discipline) that the performance of SOEs is tendentially bad; and they draw attention to the role of country-level institutional diversity in the emergence of various forms of state capital and different strategic, performance, and organizational outcomes at the firm-level. Nevertheless, the literature has at least five limitations.

First, it under-theorizes the relationship between the state and SOEs. It tends to take for granted that the influence of state bureaucrats and politicians is a source of ‘dysfunctional political interference’ in state-controlled firms. This ontological view, and the broader normative stance about the public–private divide in which it is grounded (the public as a source of interference, the private as a source of economic efficiency), is problematic, because it leaves little room for scenarios where firms are efficient in economic terms and simultaneously perform functions that further the strategic interests of state actors. It also precludes considerations of (geo)economic and (geo)political strategies that involve both private and public actors.

Second, the literature tends to conceive of the scope and motives for state action in narrow terms. For instance, Musacchio and Lazzarini (2014, chapter 3) explain in their influential account that they firmly ground their arguments about state capitalism in three fundamental logics for state intervention: fixing market failures, providing social goods, and industrial policy. While this is of course a legitimate theoretical decision, this is nonetheless a restricted understanding of state capitalism. Those three logics, as important as they are, only cover a fraction of the multifaceted role of the state in capital accumulation and capitalist society. Reducing the polymorphism of state intervention to those three logics leaves the strategic management literature inadequately equipped to grasp a great deal of phenomena deeply entangled with state capitalism, many of which will be further commented upon throughout this book, and in particular in Chapter 4, such as the role of state capitalism in reconfiguring economic and political sovereignty, in negotiating neoliberalization, financialization, and globalization, in mediating geopolitical competition between different states, or in disciplining labour and containing domestic political antagonism.

The third limitation is that while the literature convincingly shows that new governance and organizational forms have indeed emerged, such as the listing of large SOEs on stock exchanges, the professionalization of their management, the adding of boards of directors with independent members, and a certain budgetary autonomy (Musacchio and Lazzarini 2014, 48); it has been less successful in explaining the emergence of such new organizational forms in the context of wider dynamics of global capital accumulation, notably in the context of a historically unprecedented round of concentration and centralization of capital, much of which is landing in the controlling hands of states. We return to this important topic in Chapter 6.

Fourth, by primarily locating state capitalism in emerging and transition economies phenomenon, the literature paints an incomplete (if not misleading) picture about the geographies of state capitalism: as Babic, Fichtner, and Heemskerk (2017, 35) note, ‘the TSOE [transnational state-owned enterprises] phenomenon clearly goes beyond emerging markets and is prevalent in the industrialized West as well’, such as in France, Germany, Japan, and elsewhere (see also Kim 2022). Similarly, Haberly and Wójcik (2017, 252) argue that the ‘state capitalist [corporate ownership] network sprawl, has increasingly spread beyond commodity exporters and developing countries, to larger developed countries with historically strong interventionist streaks’. According to the OECD own dataset, SOEs in the OECD area are valued at over two trillion USD and employ over six million people. They are also largely concentrated in critical sectors on which large parts of the private economy depend.¹

Finally, there is also a tendency in some (but not all) of this literature to use state capitalism as a self-explanatory category, resulting in circulatory forms of reasoning. For instance, the vast presence of SOEs has been explained by the alleged dominance of the logic of state capitalism in a particular space of accumulation (e.g., ‘there are a lot of SOEs in China because China has a state capitalist system’), while the very presence of these SOEs has been said to signal the prevalence of a state capitalist logic in such space (e.g., ‘there are a lot of SOEs in China, therefore China is a state capitalist economy’). This confusion of state capitalism as explanandum and explanans results in assuming away what needs explaining.

In early variants of Comparative Capitalism (CC) scholarship, the state’s role was given limited analytical treatment and taken for granted, save for some specific variants. For instance, Whitley (1999, 2000) identified a ‘state-organized business system’, while Schmidt (2002, 2003) argued that ‘state capitalism’, epitomized by French dirigisme d’état, is a third European variety of capitalism alongside the coordinated-market economy (CME) and liberal-market economy (LME) ideal-types. While extensions have since been made to the frameworks to better account for the importance of the state (e.g., Hancké, Rhodes, and Thatcher 2007; Schmidt 2009), there is still a widespread sense, including among some of the key proponents of those approaches, that the role and diversity of state intervention are still underplayed in the CC scholarship (e.g., Witt and Redding 2013; Zhang and Whitley 2013; Wilkinson, Wood, and Deeg 2014). This has of course become more obvious given the recently more visible role of the state everywhere, but also because the literature has considerably extended its geographical scope, from a rather narrow focus on Western Europe, North America, and Japan, to Asia, Central and Eastern Europe, and Latin America. What clearly appeared from this ‘globalization’ of the field (and from the inclusion of more countries in its typologies) is that the CC scholarship did not capture well the role of the state and its various forms of intervention in spaces beyond Europe and in national economies that diverged from the two central CME/LME ideal-typical varieties of capitalism (Carney and Witt 2014).

To correct this myopia, a number of CC scholars strive to identify and outline the institutional contours of national varieties of capitalism that are state-led. This has consisted in analytically constructing one or several models of state-led varieties of capitalism (cf. Nölke, ten Brink, May, and Claar 2019; and Petry, Koddenbrock, and Nölke 2023 for some of the finest proposals). ‘Real’ cases (read, national political economies) are then confronted with these analytical constructs, in order to gain a deeper understanding of capitalist diversity. Despite considerable diversity in how the models are constructed (based on inductive or deductive methods), the analytical process remains essentially the same, which is that the models of state capitalism are set in contradistinction to other national varieties of (non ‘state-led’) capitalism.

Mainly three factors linked to the form and role of the state are included as institutional dimensions in the process of categorization of state capitalist diversity: (1) the nature and extent of state intervention (from direct involvement in production and investment to the less direct promotion of specific sectors); (2) the nature of state–business relations (particularly the network of governance arrangements that link the state to private sectors actors, such as policy networks, business associations, deliberation councils and interpersonal relationships); (3) the type of state (i.e., is the state considered characterized by more ‘developmental’, ‘predatory’, ‘regulatory’, or ‘welfare’ elements?).

For instance, Walter and Zhang (2012) identify a state-led variety of capitalism in Asia, in which they include China and Malaysia, featuring strong state intervention (large industrial output produced by SOEs, large government investment) and tight state control of business and labour organizations. The typology of Asian business systems proposed by Witt and Redding (2013), though ultimately rejecting the validity of a state-led capitalist variety (more on this below), also includes a categorization of the state in the countries studied (following the four ideal types previously mentioned). Carney and Witt (2014) offer yet another typology of Asian business systems, in which a state-led variant of capitalism mixes both predatory and developmental state elements, and includes countries such as Malaysia, Thailand, China, India (the more developmental ones), and Vietnam, the Philippines, Laos, Indonesia (the more predatory ones). Using a similar typology, Fainshmidt, Judge, Aguilera, and Smith (2018, 316) claim to have identified a variant of capitalism where ‘the state takes an active and direct role in the economic ordering of society. In these systems, political networks often serve as the mechanism through which economic activity is coordinated. These networks tend to monopolize and sustain power, introducing predatory elements to the state.’ They find that countries as diverse as Pakistan, Russia, Venezuela, China, Vietnam, Indonesia, Malaysia, India, Argentina, Mongolia, Belarus, Sri Lanka, Thailand, Philippines, and Bangladesh belong to this state-capitalism variant. For those authors, state-led capitalism exists beyond Asia. Nevertheless, other CC studies challenge the argument that economies across geographical regions belong to the same state-led variety of capitalism (e.g., Witt and Redding 2013; Witt, Kabbach de Castro, Amaeshi, et al. 2018).

While many of the above-mentioned studies (and much of the CC literature) are mostly concerned with comparing country-level institutional diversity in a static manner (often using modelling and cluster analysis), a number of studies consider how various institutional forms of strong state intervention have changed over time. For example, Zhang and Whitley (2013) look at how patterns of institutional change and economic governance arrangements have evolved in varieties of East Asian capitalism between the 1980s and the 1990s–2000s. They argue that Japan, Taiwan, Thailand, and Malaysia faced common ‘external pressures’ (growing global capital and product market integration and intensifying political pressures from Western governments and multinational institutions) which contributed to ‘[eroding] direct state intervention in the economy and weakened state-controlled institutions through which economic activity was governed’ (Zhang and Whitley 2013, 322). Nevertheless, those common pressures did not shape institutional change evenly across East Asian economies. This is because those pressures were mediated by ‘the interest and power configuration of dominant coalitions, particularly the number and variety of different socio-economic actors represented in the coalition, such as big business in different sectors, SMEs, landlords, farmers and labor’ (2013, 323). According to Zhang and Whitley, of the two East Asian economies considered state-led in the 1980s (Malaysia and Taiwan), only Malaysia remained so in the 2000s (Taiwan became a ‘co-governed’ variety of capitalism, characterized by reduced state intervention). This is an important argument to explain the uneven persistence of the state-led variety of capitalism over time.

Finally, an influential strand of CC research, that draws upon international political economy and international business, proposes to characterize state capitalism explicitly in terms of its form of external integration in the global political economy, or what is referred to as the ‘transnational embeddedness’ of state capitalism (Nölke, ten Brink, Claar, and May 2015, 542). For the key proponents of this argument, the ‘state-permeated’ variety of capitalism—which is ‘typical for large emerging markets’ such as Brazil, India, and China—is not only defined by ‘dense informal relationships between public authorities and major domestic corporations, which function as the central coordination mechanism of the economic system’ (Nölke 2014, 79–80), as much of the CC literature argues. State-permeated capitalism is also characterized by both a ‘deep immersion’ in international trade and global production networks and by a ‘policy of selective and phased integration into the global economy’ (Ten Brink 2013; Nölke, ten Brink, Claar, and May 2015, 542), including the strategic use of inward and outward foreign investment, and various forms of support to ‘their’ emerging transnational corporations. Importantly, the strong role of the state in those economies is seen as an attempt at orchestrating ‘catch-up’ development. Indeed, it is intimately linked to their timing of insertion into the global economy. In other words, these authors ground their analysis of state-permeated capitalism in (neo-)Listian theories of the developmental state and in Gershenkron’s theory of late development (McNally 2012; Nölke 2014, 4).

What distinguishes ‘state capitalism 3.0’ from ‘previous waves of state capitalism’ is that ‘third-generation late developers’ are not coherently directed by a central planning body, and they use sophisticated policies not simply to shield themselves from global competition in a protectionist fashion but to improve their relative position in the world economy (McNally 2012, 755; Nölke 2014, 89).

The renewal of interest within the CC scholarship in the role of the state in (re)producing capitalist institutional diversity is welcome. This literature has contributed significantly to the study of state capitalism in three ways. First, it demonstrates that various state institutions and modalities of intervention shape and are shaped by national variants of capitalism. Second, it highlights the importance of examining state–business relations and (formal and informal) networks in the study of state capitalism and has provided a more nuanced and sophisticated picture in that regard than the strategic management literature discussed earlier. Third, it shows the crucial role that ideas and conflicts between various interests play in the persistence of strong state intervention (albeit in changing forms) in relation with globalization pressures. This is an important argument to understand the diversity of state capitalism, and its reproduction (or not) over time. Nonetheless, this literature has several shortcomings.

As previously discussed, the CC field has reacted to its previous lack of attention to the state in two ways, and reached diametrically opposite conclusions, both of which are problematic in our view. On the one hand, commentators have upheld the validity of the category state(-led, -permeated) capitalism, and have fleshed out what are deemed to be its key institutional features. However, this has proved to be a particularly thorny exercise, and commentators tend to disagree over the specific institutional contours of state capitalism. The issue is not so much the dissensus. Although, the debates about what institutions and forms of intervention to include (or not) and about how to measure/quantify features such as ‘strong state intervention’ are potentially endless (the proliferation of typologies attests to that). Consequently, one wonders about the potential of this analytical strategy in yielding fresh insights into the nature of state capitalism. Moreover, a relatively small methodological difference in the institutional characterization of state capitalism as an ideal type (or in the institutional variables used to perform a cluster analysis) may result in significant changes in the categorization of national economies as state capitalist. This may depict very different pictures of where actually existing state capitalism is located in the world economy, from an exclusively Chinese or East Asian phenomenon, to a state-led variety distributed across emerging economies, or across entire regions and continents. In short, a small change in what CC scholars look at might lead to a dramatic shift in the geographies of state capitalism. This has major implications for how we understand state capitalism, its nature, and drivers.

This leads us to the second claim by some CC scholars, which has been to reject altogether the categorical validity of state capitalism on the basis that the state plays a pervasive role in most, if not all, of the national economies investigated. This position can be summed up as strong  capitalist  states everywhere, state capitalism nowhere, as Witt, Kabbach de Castro, Amaeshi, et al. (2018) argue. This conclusion is equally problematic for at least two reasons. First, it does not allow moving beyond the (somewhat trivial) statement that ‘the state matters’, and it does not say much if anything about the recently more visible role of the state. Second, it eludes the question of explaining why the role of the state is so variegated across the world capitalist economy. Indeed, and perhaps ironically given the focus of the CC field on institutional diversity, by emphasizing commonality (the strong role of the state), this conclusion dilutes diversity. Overall, both conclusions remain wanting, and arguably reflect the analytical impasse that the field has reached in the study of state capitalism.

Furthermore, if the CC literature has done a good job at explaining the maintenance or persistence of state capitalism in the face of pressures emanating from globalization, it does not say much about its resurgence, renewal, and reinvention. In particular, and with some important exceptions (e.g., Nölke, ten Brink, Claar, and May 2015; Nölke, ten Brink, May, and Claar 2019), it has done little to explain the transnational dimensions of state capitalism, or how state capitalism itself has been a driving force of globalizing capital (via foreign investment, cross-listing of shares, M&A, transnational networks of elites, etc.). This is highly unfortunate, given that those transnationalizing tendencies are identified across the social sciences as the single most important features about the new form of state capitalism, that is, what makes it distinctively different from previous forms, or periods, of state capitalism.

There are additional ways in which the analytical outlook of the CC literature is problematic in state capitalism studies. Not only is it inadequately equipped to capture the various forms of interconnections, inter-referentiality, and combination between repertoires of state intervention across the territorial borders of nation-states (as discussed later on in this chapter), it also almost invariably leads to rigid analytical constructs. There is of course room for debates surrounding the exact institutional contours of state capitalism(s), just like there is scope for considering hybridity (i.e., real cases exhibiting features of both state-led and other variants of capitalism). Nonetheless, this approach is largely a double exercise in boundary-making, consisting in drawing lines of distinction between types of capitalisms, and in placing real cases within the confines of thereby established ideal-types. Setting aside for now the question of the frame of reference used for the construction of varieties of state capitalism (or what is considered the norm against which such varieties are derived), our point here is that such an approach necessarily relies upon rigid and static analytical constructs of state capitalism as a set of specific institutions, modalities of state intervention, governance arrangements, or combination thereof. This restricts discussions of state capitalism in two ways: what to include (or not) in this list, and the extent to which nation-states fit ideal-type varieties of state capitalism (or not). As we argue below, it is virtually impossible to answer such questions without fetishizing some specific institutions and forms of intervention at the expense of others that might be less visible but equally important. This also forecloses the possibility that the manifest institutional and political forms of state capitalism in one place could be significantly different than in another.

The contribution of global political economy (GPE) (or international political economy, IPE) research on state capitalism is somewhat heterogeneous. While it is clear that management scholars are mostly interested in state-owned or state-controlled capital, and that the CC literature is concerned with (national) state-led varieties of capitalism, state capitalism in GPE covers a highly diverse range of research topics and objects of inquiry. We identify four (overlapping) themes that cover the main contributions of the field.

First, GPE scholars have discussed the implications of state capitalism as a source of cross-border finance, and particularly, a source of patient capital. For instance, Kaplan (2021) argues that the longer-term horizons of Chinese state-to-state lending provides more fiscal space to Latin American debtors than when they borrow from financial markets, thereby affecting their policy choices. For Kaplan, this has the potential to trigger a move away from the more traditional (Western) market-centric governance of sovereign borrowing. Critical scholars are more sceptical: for Gonzalez-Vicente (2017), state capitalism as a source of finance and investment is unlikely to significantly alter South-South relations. Taylor (2014, 354) argues similarly that ‘state capitalism as exported to Africa serves the class interests of externally oriented fractions with aspirations to become internationally competitive, accumulate mega-profits and entrench their domestic positions’. The question of state capitalism as a source of finance is not reserved to the developing world. Thatcher and Vlandas (2022, 2016) show how both state and private actors in Germany and France have actively sought to attract investment from SWFs. Indeed, Asian and Middle Eastern SWFs helped recapitalize distressed banks and automotive firms in the West in the post-2008 crisis environment (Haberly 2014, 2011). This also increased the participation of state-controlled capital in the global network of corporate ownership and control (Haberly and Wójcik 2017).

Second, GPE scholars have studied state capitalism in light of the reconfiguration of the state under conditions of globalization and financialization in order to achieve developmental objectives, maintain state sovereignty, and preserve existing domestic political orders. For instance, Nem Singh and Chen (2018) show how the internationalization and upgrading of SOEs allowed designing new developmental policies across the developing world. SWFs can play a developmental role (when used to invest in ‘strategic’ sectors, firms, or projects) but can also be used as state instruments to retain sovereignty at home, or extend it abroad (Dixon and Monk 2012). For Carney (2015, 2018) and Huat (2016), the rise and persistence of state capitalism (under the shape of SOEs) can be explained by its ‘stabilizing role’ in the face of financial globalization. By addressing macroeconomic and financial volatility and protecting from ‘political challengers’ who may benefit from financial globalization, state capitalism contributes to regime maintenance and the preservation of domestic political orders. Haberly and Wójcik (2017, 258) suggest interpreting the new state capitalism as ‘politically-mediated Polanyian double-movements of marketization and societal-protection, surrounding the advance of neoliberalism and globalization’. This has given rise to what Haberly and Wójcik call ‘a market-conforming, financial-return oriented state capitalist paradigm […] not as a reaction to neoliberalism and globalization, but rather as a means for sustaining them’ (2017, 251).

The Amsterdam School of critical IPE argues similarly that the current crisis of global capitalism has triggered a ‘reconfiguration of the global state-capital nexus’, marked by ‘the combination of a “return of the state” with a continued deepening of the process of capitalist transnationalization and globalization’ (van Apeldoorn, de Graaff, and Overbeek 2012, 472–473). In the West, the crisis has forced the state to take on an extraordinary role in order to protect the interests of capital in general, though this has so far not led ‘to any durable statist direction of the market’ but rather to an instrumentalization of the crisis to promote further neoliberalization (2012, 478–479). Across the Global South, the particular configuration of the state–capital nexus corresponds to a statist version of capitalism (involving both rentier and developmentalist strategies) in which the state plays a particularly important role in directing capital accumulation. In both the West and the Global South, they argue, the reconfiguration of the state–capital nexus is geared towards deepening commodification of labour and nature.

Third, GPE commentators have explored the interplay of statist and commercial strategies in the internationalization (or transnationalization) of state capitalism, via SWFs and state asset management bodies, SOEs’ outward FDI, M&A, and equity investment, and the creation of ‘national champions’. The key issue here is the following: are the going-abroad strategies of state capitalism more driven by state (geo)political interests, such as the acquisition of key resources and the expansion of statecraft, or by profit-maximization? Empirically, contributors have sought to answer this question by focusing on state-owned capital invested overseas in a number of strategic sectors such as natural resources and energy. A much-debated case is that of the oil industry. Meckling, Kong, and Madan (2015, 1161) identify three types of perspective on the matter. Scholars often close to Western corporate and policy-making circles have articulated the first type of perspective. It contends from a realist standpoint that the going-abroad strategies of state capitalism (largely seen as an emerging market phenomenon) are ‘a product of statecraft’ (e.g., Bremmer 2010; Kurlantzick 2016). National oil companies are typically seen as ‘arms of state power’. This is generally perceived as a threat (for a number of reasons detailed below), and those accounts are often characterized by an alarmist and anxiogenic tone.

The second type of approach claims, on the contrary, that when going abroad, national oil companies are ‘commercially minded’, and that ‘governments follow firms more than they lead their internationalization’ (Meckling, Kong, and Madan 2015, 1162; e.g., Steinfeld 2010; Victor, Hults, and Thurber 2012). The third type of perspective provides a more nuanced account. For example, Meckling, Kong, and Madan (2015) argue that the internationalization of Indian and Chinese national oil companies is neither primarily state-driven nor market-driven; rather, it follows a ‘hybrid’ pattern characterized by ‘the co-existence of cooperation and conflict between increasingly entrepreneurial, profit-driven national oil companies pulling to global markets and partially supportive and interventionist home governments’ (2015, 1160).

Similarly, for de Graaff and van Apeldoorn (2018, 121), Chinese energy SOEs perform a ‘dual role, adhering to commercial principles abroad (e.g., prioritizing profit-making) but retaining the responsibilities of a state-owned company at home (e.g., prioritizing energy security and social stability)’ (see also de Graaff 2012). This constitutes ‘the essentially contradictory nature of Chinese transnationalizing state-directed capital’ (de Graaff and van Apeldoorn 2018, 121). Jones and Zou (2017) explore the case study of a Chinese SOE investing in hydropower energy in Myanmar. For them, the analytical distinction between state-driven or market-driven internationalization is problematic, both empirically (they find evidence for both theses), and theoretically, because it relies on a poor conceptualization of the relationship between the state and SOEs. Their key argument is that Chinese SOEs have ‘considerable power and autonomy to pursue profit-making activities and are very weakly regulated’, due to the dispersal of power and authority to diverse, cross-cutting state apparatuses that are unevenly fragmented, decentralized, and internationalized (Jones and Zou 2017, 755). Nevertheless, parts of the state also ‘strive to control SOE activities where their interests are at stake. Thus, party-state/SOE relations are best understood in terms of an evolving struggle within a transformed, multilevel governance structure’ (2017, 755; see also Jones and Hameiri 2021).

Fourth, GPE scholars have debated the relation between the rise of state capitalism and the future of the (Western-dominated) liberal economic order and the global hegemony of neoliberalism. The Chinese model is often the key concern here. Here again, a number of general perspectives can be identified. The first one sees the resurgence of state capitalism, and especially its Chinese instantiation, as a threat to the ‘free market’ and liberal democracy. For instance, Bremmer (2010) contends that state capitalism is quite simply antithetical to Western liberal capitalism and seriously risks impairing the smooth functioning of markets. In an influential book on contemporary state capitalism, Kurlantzick (2016) provides a slightly more nuanced account and makes a distinction between authoritarian ‘types’ of state capitalism (China, Russia, Egypt, Vietnam) and more democratic ones (Brazil, Indonesia, etc.). In his view, the former ‘could undermine the best aspects of free-market capitalism—innovation, entrepreneurship, individualism, and democracy’, while the latter ‘could coexist with individuals’ economic and political freedoms’ (2016, 11–12). Furthermore, while acknowledging that ‘some of the modern state capitalists […]—Singapore and Malaysia come to mind—are important pillars of the world trading system, generally follow its rules, and—in the case of Singapore—have been leading advocates for expanding free trade globally and in Asia’ (2016, 11–12), Kurlantzick still argues that overall state capitalism ‘presents a real potential alternative to the free-market model, and as an alternative it presents serious threats to political and economic stability around the world’, inasmuch as ‘these countries will provide much of the world’s growth over the coming decades, and so will command ever-larger power in international institutions’ (2016, 23).

Another set of GPE scholars also emphasize the potential of state capitalism in reshaping the liberal order, though importantly, this is not necessarily perceived as a threat. For example, for Nölke, ten Brink, Claar, and May (2015), the liberal order is unlikely to deepen—rather, it will be increasingly influenced by the state-permeated model prevalent in large emerging economies (see previous section on CC). The ‘common economic institutions shared by this group’ have the potential to become a ‘State Capitalist Consensus’, which could replace the ‘Post-Washington Consensus’ (2015, 540–541). Besides, the ‘foreign economic strategies’ of state-permeated economies are already ‘facilitating such a process’ (2015, 541). McNally (2013) makes a similar argument: ‘the refurbished state capitalisms of emerging market economies, especially from China … seems to be producing a truly monumental alternate model of [neoliberal market] capitalism’ (2013, 37). In contrast with Nölke and co-writers, the primary distinction with neoliberal market capitalism does not reside so much in a set of common economic institutions than in their ‘considerable distrust of markets and full-out economic liberalization’, their ‘pragmatic use of markets’, and in their shared ‘strong belief in the potential benefits of state power, a belief that undergirds their economic management philosophies’ (McNally 2013, 38–39). For McNally (2013, 43–44), ‘the possibility of a struggle between the established Washington Consensus and refurbished state capitalisms has become quite prominent’, though he emphasizes that ‘refurbished state capitalisms are deeply enmeshed in the global political economy and their practitioners own immense amounts of global financial assets, most significantly U.S. treasury debt. Both models of capitalism are thus simultaneously co-dependent and in competition.’

The possibility that co-dependence and competition will lead to a scenario of ‘co-existence’ of the Western liberal capitalist model and the Chinese state capitalist model is envisaged by de Graaff and van Apeldoorn (2018), who argue that each could ‘maintain their own distinct political and economic system, both systems being—in different ways—part of and compatible with a capitalist and globally interlinked world economy. In this hybrid scenario China retains a relatively autonomous trajectory, partially adapting to the rules of the game of the liberal order, but at the same time holding on to distinctive aspects of its state–society model and foreign policy orientation’ (2018, 115). In another article, they further contend that the rise of state capitalism outside the Western core is leading towards ‘an increasingly multipolar order’ and might ‘force a more active role of the state in the West’ (van Apeldoorn, de Graaff, and Overbeek 2012, 482). More recently, they argued that we are witnessing ‘a relative convergence’ between the roles that the Chinese and US state play ‘inasmuch as the still strongly market-directing Chinese state also has at the same time come to embrace a global market-creating role, while the US is now also showing signs of a stronger emphasis on market-direction’ (van Apeldoorn and de Graaff 2022, 306). Table 2.1 summarizes the key insights of our analysis thus far.

In this section we look further into three critical issues: (1) the ‘missing link’ of a theory of the capitalist state, (2) the time horizons of state capitalism, or the question of ‘periodization’, (3) spatial-territorial considerations, or the question of ‘locating’ state capitalism. Our argument is that many of the analytical limitations and shortcomings previously discussed actually result from an incomplete or unsatisfactory engagement with these three deeply entangled issues. This has hampered the ability of the field of state capitalism studies to substantiate some of its core claims concerning the emergence of new global landscapes of state intervention. Tackling these three critical issues head on is key to unleashing the general potential of state capitalism as both a social scientific category and a lens for analysis, and this will be the explicit objective of the conceptual framework we develop in Chapter 3 and deploy in the remainder of the book.

As we have seen, much of the literature uses state capitalism as a heuristic device to broadly refer to configurations of capitalism where the state plays a particularly strong role in organizing the economy and society, in supervising and administering capital accumulation, or in directly owning and controlling capital. If this conceptualization appears to be clear and straightforward, it pivots on a particularly thorny issue: what does strong actually mean? What is the backdrop against which the strong role is assessed (whether quantitatively or qualitatively) and following what criteria or standard of comparison? With some creative exceptions (e.g., Kim 2022), it is fair to say that state capitalism studies as a whole have lacked a thorough and self-reflexive engagement with these fundamental questions.

We contend that there is quite simply no way of rigorously defining what is meant by a strong role of the state without establishing in the first place what is the general role of the state in capitalist society. In other words, what are the essential features and basic functions that all states  must  perform? Only on this basis can there be a reflection on the specific conditions, characteristics, and implications of an extraordinarily strong role of the state. Hence, we argue that if state capitalism is to be useful as a representational category, it must be clear from the outset that state capitalism is not synonymous with the capitalist state. This simple distinction may sound trivial. Yet, it is a crucial theoretical question, which may well be at the core of many analytical challenges, difficulties, and impasses that the field of state capitalism studies has experienced so far, and which requires engagement with theories of the socially necessary role of the state in capitalist society. Nevertheless, with very few exceptions (e.g., van Apeldoorn, de Graaff, and Overbeek 2012; van Apeldoorn and de Graaff 2022), the field has suffered from a lack of robust engagement with state theory, perhaps ironically, given its self-defined object of study. In the next chapter, we will firmly ground our conceptualization of state capitalism in state theory. For now, let us substantiate our claim about the need for a robust theory of the capitalist state by highlighting some of the issues the absence of such a theory might raise.

It has become commonplace in state capitalism studies to label particular institutions (e.g., strong ties between states and capital markets) (Petry 2020), modalities of state intervention (e.g., direct state support to ‘national champions’) (Lin and Milhaupt 2013), and organizational forms (e.g., state-owned enterprises or sovereign wealth funds) (Clark, Dixon, and Monk 2013) as state capitalist. This is not to say that these things do not deserve to be categorized as state capitalist (in fact, as argued in the introductory chapter, our concern in this book is precisely with the joint and concurrent expansion of many of these political and organizational forms at the current historical juncture). Rather, we want to point to the need for deeper reflection as to why certain repertoires of state intervention are unproblematically accepted as state capitalist, while others (perhaps equally significant) are rarely characterized as such.

Relatedly, state capitalism research has tended to exhibit a bias for the study of particular forms of intervention (such as SOEs, SWFs, and development banks) at the expense of others. The American military-industrial complex, for example, is rarely referred to as an instantiation of state capitalism, despite its extraordinary significance for both the trajectories of American capitalism and global political economy. Quantitative easing and other central bank interventions are another case in point. These forms of state action have recently been instrumental in maintaining global capitalism on life support. Yet quantitative easing and other central bank interventions rarely seem to qualify as state capitalist. Our point is not necessarily that phenomena like quantitative easing or military-industrial complexes would necessarily deserve to be labelled as such. Rather, it is that the field of state capitalism studies would benefit from greater self-reflexivity with respect to such methodological and theoretical choices. Assuming that the presence of particular institutions or forms of intervention attests to a strong role of the state, if not grounded in an overall theory of the state, constantly run the risk of fetishizing such institutions and forms of intervention at the expense of others that might be less visible but equally important (for instance, the ‘hidden’ industrial policy in the United States, Block 2008; Wade 2012; Baltz 2022). Moreover, fetishizing specific institutions or governance arrangements might be particularly problematic inasmuch as the function of institutions does not necessarily follow from their form. In fact, institutional function is often variable and context dependent (Dixon 2014; Ho 2018). This results in difficulties identifying the specific features and unique elements of state capitalism, in contrast with other forms of capitalism.

Other students of state capitalism have attempted to define the strong role of the state by quantifying it. For instance, Kurlantzick identifies

state capitalists as countries whose government has an ownership stake in or significant influence over more than one-third of the five hundred largest companies, by revenue, in that country…. Below this one-third level of government ownership of companies by revenue, the economy is still determined primarily by the market, even though the state may play a significant role.

(2016, 9)

Here we are not opposed to the attempt at quantification per se; rather, we are sceptical of the ad hoc construction of indicators to measure and quantify the role of the state in the economy without grounding in any theoretical basis. The choice of the above threshold, for instance, seems arbitrary (see also Peck 2021). Another problem stemming from this lack of theoretical grounding is that there has been a tendency in the field to construct (discursively and analytically) state capitalism as an abnormal form of capitalism, which somehow suggests that the state is relatively absent or passive in normal configurations of capitalism. Needless to say, this position is untenable.

By contrast, van Apeldoorn, de Graaff, and Overbeek (2012) and van Apeldoorn and De Graaff (2022) examine the recent resurgence of state activism in light of a historical materialist theory of the state. This theoretical grounding emphasizes that that political and economic power are always entangled and affords nuance to the claim that the state is ‘returning’. Indeed, the state has never left, even in the spaces of the world economy that have experienced the deepest rounds of neoliberalization and apparent state rollback, and even in spaces often labelled as liberal market economies. Thus, the lesson, or challenge, for state capitalism studies is to account for both the permanent and pervasive role and functions of the state in capitalist society (in enforcing the rule of law and property rights, managing labour and land-nature, regulating money and finance, etc.) and for the recent historic arc in the trajectories of state intervention. This leads us to the essential—and intimately related—issue of periodization.

Looking at the state in capitalism from an historical perspective, we are faced with two outstanding facts: first, the remarkable historical continuity of its pervasive role; second, its conspicuously changing character, in terms of the scope and depth of state intervention, but also, more broadly speaking, in terms of the shifting boundary between public and private spheres and the breadth of the tasks it has performed throughout the historical development of capitalism. This underlines the importance of clearly delineating the time horizons of state capitalism. In short, what exactly is new about the new state capitalism? This is particularly important given how much the literature relies on notions of ‘novelty’, ‘return’, and ‘reinvention’. Our contention is that a thoroughly defined periodization is necessary to substantiate the claim of historical novelty, and to clearly identify the specific properties and drivers of emergence of present-day state capitalism.

Here our argument is not that the state capitalism literature does not provide any periodization—several contributors actually provide very comprehensive ones. Let us consider two examples. The historically attuned account offered by Musacchio and Lazzarini (2014, chapter 2) is useful in showing how state ownership has changed since the late nineteenth century. Their periodization covers almost all the historical geographies of capitalism, from state ownership of infrastructure in the colonies, to the planned economy of the Soviet Union, large-scale nationalizations in the West after the Second World War, and so on. Nölke (2014, introductory chapter) suggests a periodization underpinned by a different principle. He identifies three waves of ‘successful’ catch-up capitalist development, each corresponding to a period of state capitalism: (1) Germany and Japan (in late nineteenth century); (2) the New Deal in the United States, German and Italian Fascism, Stalinism, the Swedish Model, and East Asian developmentalism (from the 1930s to the rise of neoliberalism in the 1980s); (3) state capitalism 3.0 in emerging economies in the contemporary period.

The historical depth of these two accounts at periodization is admirable, yet they also point to significant difficulties and limitations in how the field of state capitalism studies has attempted to delineate the time horizons of state capitalism. Here we identify a clear paradox. On the one hand, the literature as a whole tends to treat state capitalism as a sort of extraordinary, exceptional, if not abnormal phenomenon. On the other, the more historically attuned studies such as the ones just discussed cover extremely large chunks of history and point at the many historical antecedents of the organizational and political forms considered new in much of the literature. This strongly suggests that state capitalism may actually be the historical norm more than an exception. If that is the case, what does this mean for theorizing state capitalism in its current modalities? If state capitalism is a permanent feature of capitalism, how analytically useful is the concept in making sense of current trajectories of state intervention? Indeed, wide-ranging periodizations, while providing historical depth to the concept, stretch its boundaries so much that it risks diluting its analytical purchase (‘everything becomes an instantiation of state capitalism’). An added difficulty in attempts at periodizing state capitalism is that what may be considered state capitalism in one historical-geographical context may pass as ordinary and inconspicuous in another.

To move past these impasses, we reframe the problem of the periodization of state capitalism. In the remainder of this book, we aim to periodize not on the basis of specific organizational forms (e.g., economic entities, institutions, governance, legal arrangements, etc.) or the specific objectives they aim to achieve (e.g., catch-up development, fixing market failures, delivering public goods), but on the basis of their embedding in planetary dynamics of capitalist restructuring. What this means is that we are not interested in identifying the historical antecedents of, say, sovereign wealth funds or development banks, the large presence of which would indicate the existence of previous ‘waves’ or ‘brands’ of state capitalism. This has been comprehensively done already by some of the studies earlier mentioned, inviting interesting reflections on the ways in which past instantiations of state capitalism materially and ideologically inhabit the present. Rather, we propose to firmly situate what we call contemporary state capitalist impulses (notably the combined expansion of state-capital hybrids and of muscular forms of statism) within the historical development and geographical remaking of global capitalism.

The added value of this approach, we show in the remainder of the book, is that it allows developing a more nuanced understanding of the temporalities of present-day state capitalism, one that is attentive to both contingent and structural factors. The literature has shed light on the role of the 2008 global financial crisis in sparking a strong (conjunctural) response from the state. Some commentators have also considered this renewal of state activism against the backdrop of more long-term tendencies, in Polanyian fashion. For instance, Dolfsma and Grosman (2019) interpret contemporary state capitalism as a Polanyian countermovement against ‘too much’ neoliberal globalization and its crises. Boyer (2020) sees the current rise of what he calls capitalisme à impulsion étatique (capitalism with a state impulse) as a state-led attempt at reasserting national sovereignty against the forces of transnational capitalist globalization. Without discounting these arguments, our point here is that their emphasis on a particular type of cyclical temporality (i.e., a counter-movement of the state somehow automatically following a period of market expansion) is not particularly well suited to capture long-term, secular capitalist tendencies—including trends of economic stagnation, the centralization and concentration of capital, the internationalization of production—which have profoundly altered the scope and modalities of state intervention over the past twenty years or so. Paying careful attention to these historical transformations in global capitalism is essential to better understanding the temporalities of present-day state capitalism, as well as its spatialities. Which leads us to our third critical issue.

Our critical survey of the literature shows the importance of geographical considerations in making sense of state capitalism in at least two respects. First, there are different views on where state capitalism is geographically located: in China, Asia, emerging and transition economies, and Middle Eastern oil-exporting countries. Others argue that varieties exist across regions. Second, many contributors emphasize the transnationalizing dimensions of state capitalism. Nevertheless, we note that the field of state capitalism studies as a whole has tended, at least until recently, to exhibit an underdeveloped sense of space, and some of its core geographical assumptions concerning the nature, scale, and spatial organization of state capitalism have led to restricted and potentially misleading reading of its contemporary advent.

We have seen that much of the literature consists in outlining the institutional contours of state capitalism. Entire nation-states or blocs of nation-states are then positioned in this category. Here the framework of assumptions concerning spatial organization is that state capitalism is primarily contained within neatly demarcated national territories. State capitalism exists, including in the geographical sense, alongside other varieties of (non-state) capitalism (e.g., Fainshmidt, Judge, Aguilera, and Smith 2018; Nölke, ten Brink, May, and Claar 2019). It may make incursions in other territories, such as when it exports state-owned capital or competes abroad over access to markets or sources of raw materials, but it is primarily a national creature and a product of domestic social forces. For example, Kurlantzick contends that ‘the most autocratic and powerful state capitalists will use their state companies as de facto weapons of war, creating serious conflict in some of the most strategically important places on earth’ (2016, 25). When the focus is not on entire nation-states but on specific organizational forms, such as SWFs and SOEs, these are nonetheless seen as the causal result of domestic structures and conflicts (e.g., Nölke 2014; Li, Cui, and Lu 2017; Braunstein 2019). State-owned firms may well be taking centre stage in global markets, but they remain creatures of their ‘home countries’.

Thus, there is a strong bias in the literature towards methodological nationalism, where state capitalism is seen as primarily determined at the national level. This has profound implications, including a tendency to see geographic space as a mere container of relatively coherent models of state capitalism, or as a passive terrain of competition between such models and other forms of state capitalism. This geographic ‘anaemia’ (a term we further discuss below) can take different forms. Spechler et al. (2017, 2), for example, contend that ‘the obvious contrast to state-capitalism is free-market capitalism’, with either of these models prevailing in discrete geographic spaces. Approaches to state capitalism inspired by the developmental state literature tend to fall in a similar ‘territorial trap’ (Agnew 1994), whereby the national territory is reified as a container of state capitalist models and construed as the main unit of analysis. For instance, in their study of emerging markets state enterprises, Nem Singh and Chen (2018, 1091) argue that the decision to retain them and support their developmental roles is influenced by ‘a country’s model of development based on state capitalism’. The approaches to state capitalism prevalent in international business and strategic management likewise exhibit an underdeveloped sense of space. According to prominent contributors to this literature, the geographic nature and spatial variegation of SOEs have been systematically understudied, leading to a neglect of place-based contextual elements and spatial relations in structuring strategic decisions and firm operations across territorial borders (Deng, Delios, and Peng 2020).

As a result of these geographical assumptions concerning the nature and scale of state capitalism, the extant literature offers a restricted and potentially misleading reading of its contemporary advent. To be clear, this is not to say that national-domestic factors do not matter in the rise of state capitalism. They obviously do. This is also not to say that the field has been entirely unable to look at scales beyond the national. Our argument is rather that most approaches in state capitalism studies are ‘geographically anaemic’, meaning ‘firstly, that they are framed at an inappropriate geographical scale; and secondly, that in conjunction with this framing, they conspicuously disregard certain vital geographical trends in recent capitalist history’ (Christophers 2012, 272).²

Consider for instance the question why does state capitalism ascend? Due to their core geographical assumptions, state capitalism studies have provided restricted responses to this question: the development of state capitalism has been largely interpreted as the rise of a nationally scaled and a relatively coherent variant of capitalism. As it grows in significance on the international stage (via the internationalization of its firms, extending loans and investing abroad, etc.), it increasingly competes with other varieties of capitalism, both for access to global markets and as a model, distinct from (neo)liberal capitalism, for other countries to emulate. Politically, what is at stake is the sustainability of the new models of state capitalism (Nölke et al. 2019), or the extent to which these constitute a threat for the smooth functioning of markets and the liberal world order (Bremmer 2010). Anaemic geographical imaginaries are evident in the narratives of a confrontation between rival political-economic models which pervade the literature. For example, Kurlantzick (2016, 23) argues that ‘state capitalism usually offers a vision of the future that is more protectionist, more dangerous to global security and global prosperity, and more threatening to political freedom than the alternative of free-market capitalism’ (see also Bremmer 2010). The problem with such geographical imaginaries is not only that they locate the abnormality or exceptionalism of state capitalism outside of the Western core of the world economy, thereby reproducing orientalist tropes, and misleadingly reduce the question of contemporary state capitalism to a geopolitical clash between two easily identifiable protagonists—(Western) democratic free-market capitalism and its deviant state capitalist (eastern) ‘other’ (a warlike discursive frame which we already mentioned in the introductory chapter, and will scrutinize at length in Chapter 7). They are also poorly equipped to grasp the extent of current state transformations unfolding across the spaces of the world capitalist economy, including in states which assume liberal forms (Babic 2021; Kim 2022). This contributes to the relative incapacity in the study of state capitalism to even see state capitalism in advanced capitalist economies, which is a major hurdle to elucidating the phenomenon in both its globality and its totality.

Consider also the question of the polymorphism of the new state capitalism. The remarkable diversity in the institutional landscapes of state capitalism is of course acknowledged in the literature, but as a result of its methodological nationalism, is largely seen as a product of national-domestic political economic contingent factors. As previously mentioned, this leaves little appreciation for the various forms of interconnections, inter-referentiality, and combination that may exist between repertoires of state intervention across the territorial borders of nation-states. Yet there is ample evidence that these relations are fundamental to the recent upward trajectories of state intervention and their institutional diversity, as we will see in detail in Chapters 4 and 5. Let us take two examples to illustrate this argument. The first one is that of the recent creation of state investment funds in Western economies such as Ireland, France, and Italy (and see Dixon 2017; Mertens and Thiemann 2018). This development is directly related to the growing volumes of state-controlled investments from the Middle East and China invested in those economies, insofar as the Irish, French, and Italian state investment funds aim at channelling these investments to key sectors. Similarly, the renewal of state activism in Brazil during the rule of the Workers’ Party was intimately connected to state-led capital accumulation, rapid industrialization, and sprawling urbanization in China, and the boom in primary commodity prices that this generated from the early 2000s to the mid-2010. Indeed, the extraordinary large rents from commodity exports flowing into Brazil provided the material basis for renewal of state activism in the economy.

State capitalism studies have also experienced difficulties grasping spatial practices and strategies at a variety of scales that cut across the national, as well as their interconnection. For instance, the relation between the regional and the transnational remains underexplored, although there are clear signs that it can be highly significant. Indeed, much of the state support to the internationalization of Chinese SOEs is provided by municipal and provincial states, often in partial autonomy from the central government (see Gu et al. 2016). The national state remains of course a key site in the political geographies of state capitalism, but the literature can benefit from a deeper sensitivity to the multi-scalar relations that contribute to the reconfiguration of economic territory and sovereignty via diverse state-capitalist strategies and practices. A number of GPE contributors have gone some way in this direction when considering the fragmentation of the state and the question of multi-level governance (e.g., Gu et al. 2016; Jones and Zou 2017).

Finally, the anaemic geographies of state capitalism studies have precluded a reflection on the historic development and self-transformation of global capitalism, such as planetary mutations in the spheres of production, circulation, distribution of value, the continuation of accumulation in the face of market saturation and overproduction, and geographical trends such as the unfolding of a new international division of labour and the historically unprecedented centralization and concentration of capital. As we show in this book, these questions are fundamental for understanding contemporary state capitalism. This points to the need for an explicitly geographical approach, one that allows probing into the multiple spatialities (beyond nation-state centric territoriality) and temporalities (beyond that of catch-up development and crises) at the core of contemporary state capitalism.

Debating state capitalism is not new. There have been previous rounds of academic debates about state capitalism, each at historical junctures characterized by deep capitalist crises and renewed state activism from the end of the nineteenth century to the 1970s and 1980s (see Sperber 2019 for an excellent intellectual-historical overview), not unlike the contemporary conjuncture. State capitalism as a research agenda and field of study in its current form has provided valuable insights into an extremely wide array of spatially diverse practices, policy instruments and vehicles, institutional forms, governance arrangements, and networks that involve the state to different degrees and at a variety of levels, time frames, and geographical scales. As such, it has contributed to our understanding of the present polymorphism of state intervention across the world capitalist economy. Furthermore, the term’s capaciousness and its wide circulation have allowed state capitalism to become some sort of ‘banner to unite under’ for a number of commentators with extremely different theoretical outlooks, methods, and—perhaps more importantly—objects of inquiry.

Nevertheless, this emerging field of research has experienced conceptual difficulties, which have significantly hampered efforts at explaining the rise and significance of present-day state capitalism. We argued in this chapter that this is due to an incomplete or unsatisfactory engagement with three deeply entangled issues: (1) the ‘missing link’ of a theory of the capitalist state, (2) the time horizons of state capitalism, or the question of ‘periodization’, (3) spatial-territorial considerations, or the question of ‘locating’ state capitalism. In the next chapter, we develop a conceptual framework and associated programmatic reorientation of state capitalism studies, with the explicit aim of tackling head on these critical issues.