For each of these three ideal types one can imagine an extreme form, in which only one sort of power is involved in controlling economic resources. In these terms, totalitarianism can be viewed as a form of hyper-statism in which state power is not simply the primary form of power over economic processes, but in which economic power and associational power largely disappear. In a pure libertarian capitalism the state atrophies to a mere ‘night watchman’, serving only to enforce property rights, and commercial activities penetrate into all areas of civil society, commodifying everything. The exercise of economic power would almost fully explain the allocation and use of resources; citizens are atomized consumers who make individual choices in a market but exercise no collective power over the economy through association in civil society. Communism, as classically understood in Marxism, is a form of society in which the state has withered away and the economy is absorbed into civil society as the free, cooperative activity of associated individuals.
None of these extreme forms could exist as a stable, reproducible form of social organization. Totalitarianism never completely eliminated informal social networks as a basis for cooperative social interaction beyond the direct control of the state, and the practical functioning of economic institutions was never fully subordinated to centralized command-and-control planning. Capitalism would be an unreproducible and chaotic social order if the state played the minimalist role specified in the libertarian fantasy, but it would also, as Polanyi argued, function much more erratically if civil society was absorbed into the economy as a fully commodified and atomized arena of social life. Pure communism is also a utopian fantasy, since it is hard to imagine a complex society without some sort of authoritative means of making and enforcing rules (a ‘state’). Feasible, sustainable forms of large-scale social organization, therefore, always involve some kind of reciprocal relations among these three forms of power.
Within this general conceptualization, capitalism, statism and socialism should be thought of not simply as discrete ideal types but also as variables. The more the decisions made by actors exercising economic power based on private ownership determine the allocation and use of productive resources, the more capitalist the economic structure. The more that power exercised through the state determines the allocation and use of resources, the more the society is statist. And the more power rooted in civil society determines such allocations and use, the more the society is socialist. There are thus all sorts of complex mixed cases and hybrids—in which, for example, a society is capitalist in certain respects and statist or socialist in others.