Mixed Economy, Theory of the

a bourgeois reformist concept, according to which the increase in the scope of the state’s economic activity has resulted in the transformation of the economy of the developed capitalist countries from a private enterprise system into a “mixed economy” consisting of complementary private and state sectors.

Certain principles of the theory of the mixed economy were stated at the end of the 19th century by A. Schäffle and A. Wagner (Germany), but the integrated theory was elaborated during the 1920’s by W. Sombart (Germany). Among the proponents of the theory of the mixed economy during World War II (1939–45) and the postwar period were the bourgeois economists S. Chase, A. Hansen, J. M. Clark, and P. Samuelson (USA), who assert that control over the economy is exercised not only by private institutions but by society, to improve the “social welfare” of the people. Moreover, they assert that because of the “revolution” in its functions, the bourgeois state is capable of economic and social activity to eliminate the contradictions of capitalism, ensuring the development of the economy without crisis, as well as high and constant growth rates.

A well-developed form of a reformist variant of the theory of the mixed economy has been elaborated by C. A. R. Crosland and J. Strachey, right-wing ideologists of the British Labour Party. In their opinion, after World War II capitalism was transformed into an entirely different system, the economic characteristics of which were the transfer of the directorial role from the capitalists to the managers, an increasing economic role for the bourgeois state, full employment, and the continuous growth of production. These views were reflected in a declaration by the leaders of the Labour Party in 1957. In the opinion of Labour Party theoreticians, elements of socialism, represented by the nationalized sector, are associated with the bourgeois state’s performance of economic and social functions and with a more equitable distribution of “wealth and income.” From their point of view a mixed economy is no longer capitalist but not quite socialist.

The objective basis for the theory of the mixed economy was the development of state-monopoly capitalism, which led to an increase in intervention in the economy by the bourgeois state, in order to serve the interests of monopoly capital, and to a significant growth of the state sector in the capitalist economy. However, the theory of the mixed economy is methodologically defective because it takes an empirical and formal legalistic approach to the new economic phenomena. Although in the capitalist countries the state influences the economy, which includes a state sector of fairly substantial proportions in many countries, this is not sufficient grounds for regarding the contemporary capitalist economy as a mixed economy. From a socioeconomic point of view, both the private and the state sector in the capitalist formation represent a single type of economy, a capitalist economy, because the production relations of persons employed at enterprises owned by the bourgeois state are capitalist relations based on exploitation. Moreover, it is not significant that the bourgeois state, rather than individual entrepreneurs, acts as the exploiter of hired workers and office employees at state enterprises, for the bourgeois state represents the interests of the entire class of capitalists.

In addition to its above-mentioned shortcomings, the theory of the mixed economy distorts the economic role of the bourgeois state, ascribing to it the power to direct the development of the capitalist economy. Although the economic functions of the bourgeois state have increased under the conditions of contemporary capitalism, the state does not and cannot play the deciding role in the development of a capitalist economy. Under the conditions of state-monopoly capitalism, the giant monopolies, which are served by the state, determine the development of a capitalist economy. Moreover, the theory of the mixed economy exaggerates the role of state social measures, forgetting that these measures are promulgated under the pressure of the class struggle of the working people and that the bourgeois state conducts an antilabor legislative policy in the interests of the monopolies. The theory is also unsound in its assertions regarding the equalization of the distribution of national wealth and national income among capitalists and workers. In striving to present state-monopoly capitalism as a new social system that will develop into socialism, under which the workers and the capitalists will cooperate harmoniously in the interests of society, proponents of the theory of the mixed economy are, in fact, defending contemporary capitalism and trying to distract the working people from the class struggle.