In brief: No — and the charge can be refuted from the text, not merely disputed. Hegel’s state has a written constitution, separation of powers, independent courts with public hearings, juries, freedom of trade and of occupation, freedom of the press, and civil equality for Jews. What the charge does hit are two other things — and those stand.
Where the charge comes from
Not from the twentieth century. The reading of Hegel as the state philosopher of reaction goes back to Rudolf Haym’s Hegel und seine Zeit of 1857; Karl Popper sharpened it in 1945 and declared Hegel the link between Plato and modern totalitarianism. How Popper’s evidence stands up is treated elsewhere: Was Hegel the Prussian state philosopher?
What the book actually says
The state is expressly not the master of the spheres it comprehends. § 260 demands both at once: that personal singularity have „its complete development and the recognition of its right for itself“ and pass over into the universal:
so that the universal neither holds good nor is accomplished without particular interest, knowledge, and will, nor do individuals live merely for the latter as private persons.
Groundlines, § 260
To this come the institutions: § 211–§ 216 require a code of law and the promulgation of the laws; § 215 declares inaccessible law to be wrong; § 224 demands publicity in the administration of justice, § 228 the participation of juries; § 206 free choice of occupation; § 273 the separation of powers; § 314 f. publicity for the debates of the estates; § 316–§ 319 freedom of the press; § 270 Remark the civil rights of Jews, on the ground „that they are first of all human beings“. A total state looks different, and on every single count.
And the counter-test
Whoever holds Hegel to be a friend of unlimited state power must explain two passages. The first stands in § 270 Remark and is directed against religion where it produces „the harshest bondage under the fetters of superstition“ — against which „a saving power“ is required, one that takes up the rights of reason and of self-consciousness. The second is the footnote to § 258, against Carl Ludwig von Haller:
Hatred of law, of right determined legally, is the shibboleth by which fanaticism, feeble-mindedness, and the hypocrisy of good intentions reveal themselves and unfailingly betray what they are, whatever other garb they may otherwise choose to put on.
Groundlines, § 258 Remark, footnote
And § 5 Remark describes the fanaticism of demolishing every existing order and „the removal of individuals suspected of an order“ — written in 1820, against the Terror of 1793, and uncomfortably exact.
What the charge does hit
Two things, and both are serious.
First, war. § 324 declares the nullity of the individual and of his property in war to be an ethical moment. That Hegel excludes war against private persons and civil life (§ 338 f.) does not make the sentences harmless — see Did Hegel glorify war?
Second, world history. § 347 declares the spirits of other nations „without right“ over against the nation that is world-historical at the time; § 351 justifies treating others „as barbarians, with the consciousness of an unequal right“. Here a limit is crossed that Hegel’s own concept of recognition draws.
Neither is totalitarianism — it is no doctrine of the state’s omnipotence over its citizens. But neither is it anything that can be explained away.
The difference that matters
Hegel’s state is strong because it is supposed to hold out the oppositions that civil society generates — not because it is supposed to remove them. A state that suppresses particularity is, by § 260, not a strong state but none at all in the sense of the concept. Whether the construction holds is another question. That it wants the opposite of what is charged against it is not.
Sources. Groundlines § 5 Remark, § 206, § 211–§ 216, § 224, § 228, § 257–§ 260, § 258 Remark with footnote, § 270 Remark, § 273, § 314–§ 320, § 324, § 347, § 351. – Literature. Karl Popper, The Open Society and Its Enemies, vol. 2, London 1945, ch. 12; against it Walter Kaufmann, „The Hegel Myth and Its Method“, 1959, and Jon Stewart (ed.), The Hegel Myths and Legends, Evanston 1996; Shlomo Avineri, Hegel’s Theory of the Modern State, Cambridge 1972; on the origin of the reading Rudolf Haym, Hegel und seine Zeit, Berlin 1857, and Franz Rosenzweig, Hegel und der Staat, Munich 1920. – In the glossary: the state, the constitution, separation of powers.