Mixed Companies

(1) A form of organization of joint-stock companies, in which the state acts as a partner of private capital. As the owner of a bloc of shares, the state participates in managing the company, in appointing and replacing its directors, and in determining the direction and results of its activity.

During the early and middle 20th century mixed companies were established in sectors of the economy in which the state played the role of a major customer or trading partner (war industries, railroad transport, and finance, for example). In a number of countries, mixed companies were established to avoid the complete nationalization of sectors of the economy. However, in Western Europe after World War II (1939–45), nationalization was carried out in certain sectors of the economy in which mixed companies were functioning (for example, railroad transport, branches of the war industry, and part of the power industry). The increase in mixed companies since the 1950’s and 1960’s, as well as in the spheres in which they are common, is evidence of their transformation into an integral part of the structure of contemporary state-monopoly capitalism. In Italy, for example, the largest industrial associations, such as the National Hydrocarbons Board (ENI; oil refining and petrochemicals), Italsider (metallurgy), and Sidelor (electric power), are headed by companies in which the state owns a controlling bloc of shares and private capital acts as a co-owner. The principal holding companies extend their influence to a wide range of private capitalist companies by means of a holding system: In France, mixed companies have become common in the power and petrochemical industries. In Great Britain and the Federal Republic of Germany (FRG) mixed companies are growing in number and influence. The state’s participation in mixed companies, a form of state regulation in the contemporary stage of the general crisis of capitalism, is directed at realizing the interests of the bourgeoisie.

By acting as private capital’s partner in mixed companies, the state in the developing countries promotes the kind of formation and orientation of capital investments that accelerates economic growth, raises the rate of accumulation in the national income, and helps control prices. In a number of countries, including India and Burma, participation by the state in the ownership of foreign monopolies has become common. In cases where for some reason the state does not undertake direct nationalization of foreign enterprises, its participation as a shareholder, especially if it owns a controlling bloc, permits it to counteract antinational, predatory tendencies in the activity of foreign monopolies.

Some mixed companies, such as Intelsat, an international communications satellite company, are owned jointly by several states.

Mixed companies were permitted in the USSR after the transition to NEP, in order to make possible the use of private capital in restoring the national economy, with the state playing the leading role. Formed primarily in foreign trade, mixed companies facilitated exports to the world market by Soviet foreign trade organizations, such as Amtorg.

Since the late 1960’s and early 1970’s the mixed company has been widely used as an organizational form by the socialist countries, primarily through the participation of state enterprises or associations in private joint-stock companies in the capitalist and developing countries. The purpose of this type of mixed company is the development of economic relations, including trade. The socialist states participate in joint-stock marketing enterprises abroad, as well as in financial organizations that provide credit for foreign trade. Mixed joint-stock marketing companies, with capital investments contributed by appropriate foreign trade associations representing the USSR, have been formed in Finland (Teboil, Suomenpetroli), Belgium (Nafta, Scaldia-Volga), and France (Aktif-Avto), as well as in the FRG, Italy, Sweden, Norway, and a number of other capitalist countries.

In some socialist countries, including Rumania and Yugoslavia, mixed companies are a form of participation in state companies by private capital from capitalist countries. Under this arrangement, the socialist state’s control over the activity of the enterprise is ensured.

(2) A form of joint participation by two or more private companies in the share capital of an enterprise, resulting in a mixed (dual or triple) subordination of the enterprise. During the 1960’s and 1970’s this form was used by international monopolies to penetrate the economies of national states.