OVER the course of 2007 and 2008, two things happened that were supposed to be impossible.

First, the financial systems of the most advanced capitalist states went into meltdown as the big banks stopped lending to each other, each one panicking that they were all holding worthless assets.

Far from boom and bust being a thing of the past, as Gordon Brown and others had claimed, the global economy was thrown into a massive recession.

The second thing that happened was that the state re-emerged to save the day. Governments injected eye-watering sums of public money into the banks to restore their liquidity and handed them fantasy sums of money in guarantees, while central banks passed on a huge subsidy in the form of zero-interest rates.
 
None of this was supposed to happen. The state was supposed to have been swept away on the wave of globalisation. And yet here it was, pumping money into failed banking sectors which it would then remove from nationally organised groups of working people.

Having made its reappearance on the world stage, the state  promptly became an object of political struggles again.

Both right-wing populists and the re-emerging left forces began to talk about active government again — a government that would seize control of borders, prioritise domestic job protection, invest to create growth or take back control of strategic public services.
 
In Britain, we have the prospect of a Jeremy Corbyn-led government coming to power with a manifesto that aims to place government at the service of working people and which poses a genuine threat to the big business interests that have dominated policy-making in Britain in the neoliberal era.

If it does so, it will immediately face a massive reaction from the transnationals and finance capitalists who dominate the British state.
 
This makes it vitally important for the left and the working class movement to discuss, debate and understand the nature of the state.

What is the relationship between elected governments and the wider organs of the state? How does the state serve big capital and the wider capitalist class and to what extent does it offer levers for building social control of capital and socialist economic relationships?

It is as a contribution to this vital debate that Manifesto Press has published a new book called State Monopoly Capitalism.

Written by three German Marxists with an introduction for a British audience by myself, this book aims to contribute to the debate on the state by re-examining a tradition of Marxist theory, which developed a distinctive and sophisticated analysis of the development of capitalism and the state in the 20th century.
 
Too briefly, the story went like this. As the accumulation of capital drove the formation of big monopolies dominating entire industries, assisted by the growth of finance capital, so conflicts within capitalism grew in scale.

The anarchic competition within capitalism saw big companies drive smaller capitals to the wall, small producers were hit by monopolistic pricing practices, class struggles were aggravated and workers were thrown into bigger and more complex workplace organisations, forming stronger defensive trade unions and their own political parties. Crises, when they broke, were bigger in scale and aggravated by finance capital’s speculation.
 
The revolutionary upsurge that accompanied the First World War and the formation of the first socialist state in Russia, followed by further years of crisis and turbulence in the 1920s, ushered in a period when the dominant fractions of the capitalist class called in the state for help.

In one sense there was nothing new here. Since the crushing of the Paris Commune, the nature of the state as a guarantor of class rule had been brutally apparent.

Yet there was a new element. The state was called in not simply to guarantee order through the use of force or ideological hegemony, but to exercise economic force. The state was now tasked with guaranteeing capitalist accumulation, tempering class struggles and forestalling the socialist alternative.
 
In this period of the 20th century, the state became involved in direct ownership and rationalisation of industries and with creating a macroeconomic policy environment aimed at providing stable, planned accumulation, as well as providing health, education and social security.
 
To Keynesians, this was the “Golden Age” of capitalism. But for the Marxists who theorised this as “state monopoly capitalism,” these developments were the consequence of class struggles and created new zones of class struggle.

State ownership of industries, for example, could be used to achieve rationalisation and centralisation of capital in an orderly way to provide a basis for other capitalists to continue accumulating, as in the case of the railways or the coal industry.

Alternatively, they represented a new measure of social ownership and democratic control over the market and had the potential to be developed into elements of a new socialist order. The balance of class struggles would decide which way they went.
 
So it proved. With the collapse of the USSR and the 30-year neoliberal offensive, supposedly aimed at rolling back the state, it’s perhaps not surprising that this theory fell into disuse.

But the truth is that the state never went away. As this book shows, it just changed the way that it worked. With 2008 and the re-emergence into plain sight of the national state as a machinery and a zone of class struggle, it’s vital to reappraise and update our theory.
 
State Monopoly Capitalism is not simply an exercise in theoretical recovery. It also attempts to set out the areas where Marxists and the working-class movement need to do some new thinking and study. What is the relationship between the growth of finance capital and the “neoliberal” state? How have the objects of class struggle changed?

As we’ve seen, these are not obscure questions but very real, very immediate ones.

Understanding how to mobilise and build alliances against this, the big transnationals and finance capitalists who dominate the state will be vital preconditions for the survival of any left governments.

Similarly, the question of whether any reforms won can be made to act as levers for a revolutionary transformation or will merely serve the purposes of continued capitalist accumulation will be determined by the consciousness of the working class and its understanding of the nature of the state in our current period.

The question of the state and its role in the economy is being raised by reality. The task of theory is to comprehend this and provide a guide to action. State Monopoly Capitalism aims to be a contribution to this work.

State Monopoly Capitalism by Gretchen Binus, Beate Landefeld and Andreas Wehr, with an Introduction by Jonathan White is available from Manifesto Press manifestopress.org.uk.