The rationale there is that you’re still using capitalist mechanics, but instead of the capital being owned by private individuals, it’s in the hands of the state. However, the key difference in my view is with the respective incentives created by both approaches.

When the capital is in the hands of private individuals then they’re able to use this capital for direct personal benefit. This creates incentives for exploitation of the workers by capitalists in order to get the best return on their labour. The primary goal of labour becomes producing value for capitalists with any other benefits being strictly incidental.

On the other hand, when the capital is owned by the state then nobody is directly profiting from the labour, and the only incentive is to reinvest the capital back into developing the productive forces of the country.

The one valid criticism we can make of state owned industry is in terms of labour organization where it often follows top down corporate structure. However, that is obviously not an inherent problem associated with having state run industry.