Global Capitalism and the Transformation of State Socialism

The article outlines the footprint of international economic interests under state socialism, and considers in more detail the economic integration of the postcommunist countries into the world system in the post-1989 period of the building of capitalism. The focus of the article is on the extent of economic globalization of countries and their economic corporations. It is contended that the globalization of capitalist companies and the direct role of global economic forces had little importance under state socialism. Since 1989, policy in the former state socialist countries has been geared to “joining” the world system, optimistically its core. Important differences have developed between the postsocialist states with respect to economic penetration and exposure to the world market. The outcomes have not fulfilled the expectations of early advocates of transformation and entry to the world economy. Although the new member states of the European Union have entered the world economy as formal members of the “core,” they are not economically equal to the dominant “old” members of the EU. In all the postcommunist countries, there is an absence of large scale global companies, of comparable levels of innovation, research and development. Russia is a resources rich country, a “hybrid” social formation containing elements of state economic control, national capitalism, and global capitalism. I conclude that the semi periphery is not a transient category in the world economy; it has potential for persistence and renewal.