In this paper, I outline what I take to be the most important theoretical claims and innovations of ‘twenty-first century socialism’ in Venezuela. These, I argue, consist of an emphasis on human development through popular-economy initiatives, and the importance of building popular power through the state, rather than by ignoring or fighting against it. I then present evidence on Venezuela’s Socialist Production Units, one of Venezuela’s newest state-supported popular-economy organisations. I argue that, consistent with the twenty-first-century socialism approach, SPUs are (...) sites of human development in which participants are learning to challenge capitalist social relations, while establishing new values and practices. Therefore, we can think of Venezuela’s popular economy as expressing a sharpened class contradiction.However, my case study also shows that holding hands with human development is class struggle directed against the state. This reveals a central theoretical and practical paradox in twenty-first century socialism, namely that, while nurturing initiatives that challenge capital, the Venezuelan state also emerges as an important barrier to overcoming the class relation. This, I argue, is not wholly consistent with the views of theorists of twenty-first century socialism that understand Venezuela’s popular economy as forming a new form of dual power or a parallel state, and who therefore downplay the importance of struggles against the state within the popular economy. The strategic implication is that struggles between popular-economy participants and the state cannot be avoided, and indeed will need to be fostered if the project for twenty-first century socialism is to continue. (shrink)