At the draw of the 21st century, capitalism as the dominant model of development which has successfully overcome challenges posed by socialism as an alternative strategy of development. The industrialization of England was the first successful model of capitalist development.

This was accomplished between 1760 and 1820. It was based on free enterprise within and monopoly trade in the colonies, often accompanied by direct plunder of the colonial resources.

The other countries, which followed this model with some local variations, were France, Holland, and the United States: Germany, Italy aid later Japan. The political history of capitalist systems has followed neither a simple nor a linear path of development. Capitalist development reflects a contradiction between the requirements of capital accumulation and the needs of political legitimating. This contradiction was sought to be resolved through six different stages of capitalist growth requiring six successive state formations. According to Alan Wolfe,

Accumulative State corresponded to the first wave of capitalism industrialization. It had accumulation its own mechanism of legitimating. Since any means needed to achieve the accumulation of wealth was justified: the Accumulative State was not committed to laissez faire ideologically.


It promoted government intervention to define the parameters of the emerging system of production, to preserve discipline among the workers, to adjust macro economic conditions, to fight colonial wars, to pursue capitalist interests, to provide subsidies to capitalists, and to support miscellaneous eclectic activities.

When the crisis of accumulation, Smith and Ricardo talked of the Harmonious State and harmony as the essential elements of capitalist production. Freedom of the market, they said, reconciled the interests of the producers with those of the consumers and the interests of the capitalists with those of the workers. This assumption was internally inconsistent, led to Social Darwinism and failed as a legitimation mechanism.

Expansionist State characterized the third phase of capitalist development. Although an imperialist policy of expansion carried out in the interest of finance capital sensed to relieve domestic pressures from the working class: expansionism meant the erosion of classical liberalism. The end of free trade, unrestricted immigration aid export of capital to colonies and semi colonies were accompanied by indoctrination and control of workers through education and mass culture. The World War I put an end to this phase of capitalist imperialism.

Franchise State characterized the fourth phase of capitalist development. It tried to regularize conflicts between classes and strata by delegating public power to private bodies. This reflected a pluralist dispersal of power. The capitalist state of ‘pluralist democracy’ was supposed to give away power, not to exercise it. This was mystification. The franchise state declined by the end of World War.


Dual State called into existence during the fifth stage of capitalist development. This state created two parallel structures, one charged with keeping order through repression and the other with presenting a democratic facade. Capitalism at this stage function led through a diarchy-one arm being the military bureaucratic apparatus aid the other arm more visible to the public etc., constituting the electoral parliament mechanism.