A system in which many profit-seeking enterprises are largely owned, or managed, or supported by the State. Nations as diverse as present-day China, the old USSR, and even the United States (with its military-industrial complex and certain enterprises deemed “too-big-to-fail”) have been called “state capitalist”.
China is perhaps most often held up as an example of successful state capitalism. China has grown at almost 10% for the past 30 years. State-capitalist companies such as China Telecom have come from nowhere to become mighty global companies.
State capitalism's libertarian critics, on the other hand, argue that the system (in China and elsewhere) is riven with problems. State-capitalist companies are not only less efficient than their private competitors, they are also using cheap capital and political favouritism to crowd out the entrepreneurs that are the real drivers of growth. State capitalism inevitably degenerates into crony capitalism as powerful politicians extend their control over the economy.
The criticism of State Capitalism from the socialist and Marxist left is that State Capitalist nations such as the USSR and China have claimed to represent “socialism” or “communism”, while leaving out the essential goal of socialism and communism (as defined by Marxists), namely, real and effective democratization of the society. Instead, these critics on the left argue, these state capitalist societies have functioned essentially as “a single huge corporation, extracting the surplus value from the workforce in order to invest it in further production” (ref: wikipedia), and providing as little real democracy for the citizens as is provided in any other capitalist enterprise.