,DYNAMICS ( ! ,MIX$ ,ECONOMY 

,PEOPLE 3 

,AU?OR 3 ,PAUL ,MATTICK 

,TEXT 3 

,PUBLI%$3 ,SCI5CE @& ,SOCIETY1 VOL4 #b#h1 NO4 #c4 ,SUMM] #a#i#f#d4 ,PP4 #b#h#f-#c#d4 
,TRANSCRIPTION_/,M>KUP3 ,MICAH ,MU]1 #b#a#h4 

,I 

,! ,!,O,R,Y ( ! 0MIX$0 OR 0DUAL0 ECONOMY IS 
,KEYNESIAN4 ,?IS TYPE ( ECONOMY1 IMPLY+ GOV]NM5T MONET>Y & FISCAL 
9T]V5TION 9 ! M>KET ME*ANISM1 IS /ILL V]Y MU* ) US2 BUT ITS 
!ORY1 OR IDEOLOGY1 IS 9 CRISIS4 ,QUITE FREQU5TLY ! QUE/ION IS RAIS$ 
:E!R OR NOT ,KEYNESIAN ECONOMICS IS 0\TDAT$10 & DEM&S >E 
HE>D = EI!R A 0META-,KEYNESIAN0 APPROA* TO ECONOMIC PROBLEMS 
OR = REPLAC+ ! 0CONS]VATIVE0 ) A MORE 
0RADICAL0 V]SION ( ,KEYNESIANISM4 ,!SE LAM5TS >E NOT ! 
\TCOME ( ANY REC5TLY NOTIC$ 9T]NAL 9CONSI/5CIES 9 ,KEYNES'S 
!ORY BUT ( ! RELATIVE /AGNATION ( ! MIX$ ECONOMY & ITS APP>5T 
9ABILITY TO SOLVE ! PROBLEMS ( ADEQUATE 9VE/M5T & EMPLOYM5T4 ,TO F9D 
AN ANSW] TO ! QUE/ION ( :AT W5T WRONG1 IT WILL BE USEFUL TO DEAL BRIEFLY 
) ! RISE & E>LY SUCCESS ( ! ,KEYNESIAN ECONOMY4 

,KEYNES1 BE+ A K9D ( NEO-M]CANTILI/1 WAS FULLY AW>E ?AT GOV]NM5T 
HAS ALWAYS HAD A H& 9 ! NATIONAL ECONOMY4 ,IT WAS M]ELY A QUE/ION ( MORE 
OR LESS1 & LAISSEZ-FAIRE MEANT LESS4 ,W> & REVOLUTION1 H[EV]1 
BR\<T ) !M 9CREAS+ GOV]NM5T CONTROL4 ,KEYNES'S ,G5]AL 
,!ORY ( ,EMPLOYM5T1 ,9T]E/ & ,MONEY WAS A REACTION TO ! 
0W> SOCIALISM0 PRACTIC$ BY GOV]NM5TS ( ! W>R+ NATIONS 
DUR+ ! ,FIR/ ,WORLD ,W>1 TO ! ,BOL%EVIK 0EXP]IM5T0 9 /ATE 
[N]%IP1 & TO CRISIS CONDITIONS 9 ! WAKE ( ! W> :I* BECAME 
WORLDWIDE ) ! COLLAPSE ( ,AM]ICA'S PROSP]ITY 9 #a#i#b#i4 ,AFT] ?AT1 
UNEMPLOYM5T WAS ! GREAT SOCIAL PROBLEM & ITS IMM$IATE CAUSE WAS 
RECOGNIZ$ 9 A G5]AL DECL9E ( 9VE/M5TS4 ,IT OCCURR$ TO ,KEYNES ?AT ! 
PROBLEM C\LD BE SOLV$ ?R\< APPROPRIATE GOV]NM5T MEASURES4 

,:ATEV] ! EXPLANATION = ! LACK ( 9VE/M5T & 5SU+ 
UNEMPLOYM5T1 IT SEEM$ NECESS>Y TO 9CREASE ! =M] 9 ORD] TO 5D ! 
LATT]4 ,= ,KEYNES1 9VE/M5T WAS AN ACT ( FUTURE CONSUMPTION1 & 
CONSUMPTION ITSELF ! 5D ( ALL ECONOMIC ACTIVITY4 ,HE F\ND ?AT1 DUE TO A 
0PSY*OLOGICAL LAW10 CONSUMPTION AS A P]C5TAGE ( 9COME 
DECREASES ) ECONOMIC EXPANSION1 & ?AT 9 A 0MATURE0 SOCIETY 
! 0PROP5SITY TO CONSUME0 IS TOO WEAK TO BR+ =? AN 
0EFFECTIVE DEM&0 ABLE TO SECURE FULL EMPLOYM5T4 ,BUT WAYS W]E 
/ILL OP5 TO 9CREASE ECONOMIC ACTIVITY ?R\< GOV]NM5T-9DUC$ PRODUCTION 
& CONSUMPTION4 

,TO 9CREASE PRODUCTION ?R\< 9VE/M5T1 ! 9DUCEM5T TO 9VE/ MU/ BE 
/IMULAT$ BY GREAT] PR(ITABILITY ?R\< L[] 9T]E/ RATES &1 P]HAPS1 
MONET>Y 9FLATION4 ,TO RAISE ! PROP5SITY TO CONSUME1 PUBLIC WORKS & 
WELF>E POLICIES >E REQUIR$4 ,IDLE MONEY C\LD BE BORR[$ BY GOV]NM5TS = 
F9ANC+ PUBLIC UND]TAK+S ?AT EXCE$$ !IR TAX+ CAPACITIES4 ,DEFICIT 
F9ANC+ DID NOT REALLY CONTRADICT ! PREVAL5T NOTION ?AT A BALANC$ BUDGET 
WAS NECESS>Y4 ,!RE WAS NO NE$ TO A*IEVE A BALANCE ANNUALLY2 ! SURPLUSES 
( PROSP]\S YE>S C\LD COMP5SATE = DEFICITS ACQUIR$ 9 DEPRESSION YE>S4 
,! !ORY ( ! C5TRALLY & CONSCI\SLY /ABILIZ$ ECONOMY R$UC$ ITSELF1 
F9ALLY1 TO TE*NIQUES ( 9COME DI/RIBUTION-AFFECT+ BO? ! 
PRES5T & ! FUTURE-BY :I* A /ATE ( UNEMPLOYM5T C\LD BE *ANG$ 
9TO ONE ( FULL EMPLOYM5T4 

,9FLATION1 DEFICIT F9ANC+1 & PUBLIC WORKS HAVE1 ( C\RSE1 BE5 APPLI$ 
9 TIMES LONG PA/ BUT )\T ! !ORETICAL EMBROID]Y PROVID$ BY ,KEYNES4 
,!Y W]E NOT ONLY 9DEP5D5T ( ,KEYNES'S P>TICUL> REASON+ BUT !IR 
EFFECTS W]E 0REV]SIBLE0 & !Y C\LD BE EMPLOY$ = 5DS 
DIFF]5T FROM ?OSE SUGGE/$ BY ,KEYNES4 ,9DE$1 ,KEYNES HIMSELF F\ND ?AT 
FISCAL & MONET>Y MANIPULATION C\LD BE US$ = DECREAS+ 9/EAD ( 
9CREAS+ ! 0PROP5SITY TO CONSUME0 & = 9CREAS+ 9/EAD 
( DECREAS+ 0SAV+S0 9 ORD] TO F9ANCE SU* L>GE PUBLIC 
UND]TAK+S AS ! ,SECOND ,WORLD ,W>4 ,9 ?IS 09V]T$0 =M1 
,KEYNESIANISM PROV$ TO BE A FULL 0SUCCESS0 9 CONTRA/ TO ITS 
0FAILURE0 DUR+ ! PREC$+ DEPRESSION YE>S4 

,ASIDE FROM ! FACTOR ( IDEOLOGY1 IT IS N[ G5]ALLY ACKN[L$G$ ?AT IT 
IS A FUNCTION ( GOV]NM5T TO MA9TA9 A SOCIALLY SATISFACTORY LEVEL ( 
ECONOMIC ACTIVITY4 ,LITTLE D\BT IS DISPLAY$ ?AT GOV]NM5T 9T]V5TION 9 
! ,KEYNESIAN S5SE HAS SOLV$ MO/ ( ! ECONOMIC PROBLEMS ?AT BESET ! 
PRE-,KEYNESIAN WORLD4 ,IF !RE HAS BE5 A DECL9E ( NEW 9VE/M5T & A 
CONSEQU5T GR[? ( UNEMPLOYM5T1 ?IS MEANS ONLY ?AT /ILL MORE 
GOV]NM5T-9DUC$ PRODUCTION & CONSUMPTION >E REQUIR$ TO LEAD ! ECONOMY 
TO A FULL] USE ( ITS PRODUCTIVE RES\RCES4 ,BUT !SE PROPOSALS >E MADE 
)\T REG>D TO !IR CONSEQU5CE & )\T CONSID]ATION ( ! REAL 
*>ACT] ( ! MIX$ ECONOMY4 

,I,I 

,9 ORD] TO UND]/& ! DYNAMICS ( ! MIX$ ECONOMY IT IS NECESS>Y TO 
KN[ ITS WORK+ ME*ANISM4 ,! ME*ANISM IS PROVID$ BY GOV]NM5T 
EXP5DITURES :I* C\NT]ACT ! MOVEM5T FROM PROSP]ITY TO DEPRESSION4 ,! 
ECONOMIC ROLE ( GOV]NM5T SEEMS TO DIVIDE ! :OLE ( ! MIX$ ECONOMY 9TO 
A 0PUBLIC SECTOR0 & A 0PRIVATE SECTOR40 ,ACTUALLY1 ( 
C\RSE1 IT IS JU/ ONE ECONOMY 9 :I* GOV]NM5T 9T]V5ES1 = IT IS NOT 
GOV]NM5T [N]%IP BUT GOV]NM5T CONTROL :I* *>ACT]IZES ! MIX$ 
ECONOMY4 ,!RE IS1 ( C\RSE1 9 ADDITION1 A GREAT & GR[+ AM\NT ( DIRECT 
[N]%IP 9 ! MIX$ ECONOMY1 JU/ AS !RE WAS GOV]NM5T [N]%IP 9 
LAISSEZ-FAIRE CAPITALISM4 ,BUT NO MATT] H[ SELF-SUPPORT+1 
SELF-LIQUIDAT+1 OR EV5 PR(ITABLE SOME GOV]NM5T UND]TAK+S >E1 
GOV]NM5T /ILL REQUIRES AN 9CREAS+LY L>G] PORTION ( PRIVATELY PRODUC$ 
NATIONAL WEAL?4 

,! PRIVATE SECTOR ( ! ECONOMY1 TO USE !SE FAMILI> T]MS1 DIFF]S FROM 
! PUBLIC SECTOR 9 ?AT ! LATT] IS BASICALLY NON-PR(ITABLE1 ! =M]1 
PR(ITABLE4 ,! PRIVATE SECTOR EXP&S ( ITS [N ACCORD1 ! PUBLIC SECTOR 
L>GELY AT ! EXP5SE ( ! PRIVATE SECTOR4 ,AS LONG AS ! GR[? ( ! 
PRIVATE SECTOR IS FA/] ?AN ?AT ( ! PUBLIC SECTOR1 ! GR[? ( ! 
LATT] M]ELY REFLECTS ! G5]AL GR[? ( ! ECONOMY4 ,IT IS QUITE O!RWISE 
:5 ! PUBLIC SECTOR DEVELOPS FA/] ?AN ! PRIVATE SECTOR4 

,G5]ALLY1 GOV]NM5T DOES NOT PRODUCE = ! M>KET4 ,IT M]ELY MOBILIZES 
PRIVATE SAV+S 9 ORD] TO UTILIZE PRIVATELY [N$ MEANS ( PRODUCTION :I*1 
9 TURN1 EMPLOY LABOR ?AT W\LD O!RWISE BE IDLE4 ,! GREAT] NATIONAL 
PRODUCT BR\<T =? 9 ?IS MANN] WILL IMPAIR ! PR(ITABILITY ( PRIVATE 
CAPITAL1 NOT ( P>TICUL> CAPITALS1 TO BE SURE1 BUT 9 G5]AL4 ,IT IS PRIVATE 
PRODUCTION :I* MU/ YIELD ! TAXES NECESS>Y TO COV] GOV]NM5T-CREAT$ 
0DEM&0 & TO F9ANCE ITS BORR[+S4 

,IT CAN BE >GU$1 ( C\RSE1 ?AT1 AP>T FROM W>1 GOV]NM5T 9CREASES ITS 
ECONOMIC ACTIVITY ONLY BECAUSE PRIVATE PRODUCTION BEG9S TO SLACK5 & ?AT1 
!RE=E1 ITS PR(ITABILITY REMA9S UNAFFECT$ S9CE BUS9ESS W\LD NOT BE ANY 
BETT] )\T GOV]NM5T 9T]V5TION4 ,?IS MAY WELL BE SO1 BUT NONE!LESS1 
TAXES & ! S]VIC+ ( ! NATIONAL DEBT MU/ COME \T ( ! PRIVATE 
SECTOR ( ! ECONOMY &1 TO ?AT EXT5T1 DEPRIVE ?IS SECTOR ( P>T ( ITS 
PRES5T & FUTURE 9COME4 ,ONLY IF ! PRIVATE SECTOR 9COME RISES 
PROPORTIONALLY FA/] ?AN ! NATIONAL DEBT & TAX BURD51 & ONLY IF IT 
[ES ?IS RISE TO ! 0PUMP-PRIM+0 ACTIVITIES ( GOV]NM5T1 CAN 
IT BE SAID ?AT GOV]NM5T-9DUC$ PRODUCTION S]VES PRIVATE CAPITAL AS 
WELL4 

,AS F> AS ,KEYNES WAS CONC]N$ GOV]NM5T 9T]V5TION 9 ! ECONOMY C\LD 
RANGE FROM MANIPULAT$ 9T]E/ RATES TO ! USURPATION ( 5TREPR5EURIAL 
FUNCTIONS BY GOV]NM5T4 ,TO COMPETE DIRECTLY ) PRIVATE CAPITAL = ! 
AVAILABLE M>KET DEM& W\LD1 H[EV]1 LEAD TO ! GRADUAL DISPLACEM5T ( 
PRIVATE 5T]PRISE BY /ATE 5T]PRISE & ?IS IT CANNOT BE EXPECT$ TO DO 9 
A SOCIETY 9 :I* GOV]NM5T REPRES5TS ! FREE 5T]PRISE SY/EM4 ,L[]+ 
9T]E/ RATES MAY1 OR MAY NOT1 FO/] CAPITAL 9VE/M5T BUT ?IS HAS PROV5 
9SUFFICI5T 9 P]IODS ( /AGNATION4 ,9CREAS+ TAXES = EXP5DITURES ABOVE 
! GIV5 M>KET DEM& M]ELY DI/RIBUTES ! AVAILABLE 9COME & DOES NOT 
GU>ANTEE AN 9CREASE ( EMPLOYM5T & PRODUCTION4 ,IT MAY WELL HAVE ! 
OPPOSITE EFFECT1 EV5 IF 9COME DI/RIBUTION BY WAY ( TAXES %\LD 9CREASE 
! PROP5SITY TO CONSUME4 ,:ILE CONSUMPTION MAY ?US BE 9CREAS$1 ! 
9DUCEM5T TO 9VE/ MAY BE /ILL FUR!R WEAK5$4 

,QUITE G5]ALLY1 !N1 CAPITALI/S PROPOSE EXACTLY ! OPPOSITE 
PROC$URE-A R$UCTION ( TAXES TO 9CREASE ! 9DUCEM5T TO 9VE/4 ,IF 
!IR WI%ES >E GRANT$ !IR 9COMES WILL BE L>G]1 BUT EV5 ?IS MAY LEAD 
NOT TO A FA/] RATE ( CAPITAL =MATION BUT M]ELY TO A GREAT] MASS ( IDLE 
CAPITAL4 ,!RE IS NO C]TA9TY ?AT TAX POLICIES1 AFFECT+ EI!R ! 
PROP5SITY TO CONSUME OR ! 9DUCEM5T TO 9VE/1 WILL ACTUALLY LEAD TO AN 
9CREASE ( NATIONAL PRODUCTION & FULL EMPLOYM5T4 ,!RE IS ! POSSIBILITY1 
H[EV]1 ?AT EMPLOYM5T & PRODUCTION WILL 9CREASE :5 ! GOV]NM5T PAYS 
\T MORE ?AN IT RECEIVES BY WAY ( TAXES1 ?AT IS1 ?R\< DEFICIT 
F9ANC+4 

,MONEY MAY BE SAV$ 9/EAD ( BE+ 9VE/$ OR CONSUM$4 ,A L[ RATE ( 
9VE/M5T MAY 9DICATE ! EXI/5CE ( SU* SAV+S1 A CONDITION ,KEYNES 
CALL$ 0LIQUIDITY PREF]5CE40 ,! GOV]NM5T CAN BORR[ !SE 
SAV+S & 9CREASE ITS EXP5DITURES &1 AS A RESULT1 /EP UP NATIONAL 
PRODUCTION & CONSUMPTION4 ,?IS PROCESS YIELDS PR(ITS TO SOME CAPITALI/S & 
9T]E/ TO O!RS2 ITS F9ANCIAL MANIFE/ATION IS TO BE F\ND 9 ! NATIONAL 
DEBT & 9 AN 9CREAS+ RATIO ( TAXES TO NATIONAL PRODUCT4 

,NOT ONLY GOV]NM5T DEFICIT F9ANC+ BUT A L>GE P>T ( PRIVATE PRODUCTION 
IS BAS$ ON CR$IT1 ON ! EXPECTATION1 ?AT IS1 ?AT FUR!R ECONOMIC GR[? 
WILL BE PR(ITABLE 5\< TO TAKE C>E ( ! 9DEBT$NESS4 ,CORPORATE DEBTS >E 
NOT LIQUIDAT$ 9 ! AGGREGATE BUT >E REFUND$ ) NEW BOND ISSUES ?AT TAKE 
! PLACE ( ?OSE COM+ DUE4 ,CR$IT BE+ CONT9U\S1 EXPANSION CAN ALSO BE 
CONT9U\S4 ,GOV]NM5T DEBTS >E H&L$ 9 ! SAME FA%ION4 ,:ATEV] IT 
BORR[S & SP5DS1 ! GOV]NM5T NE$ NOT DIRECTLY WORRY AB\T REPAYM5TS1 
= IT CAN AGA9 BORR[ AN EQUAL OR GREAT] AM\NT4 

,PRIVATE EXPANSION BY WAY ( CR$ITS IS B\ND TO AN EXPECT$ PR(ITABILITY 
& ! EXPECT$ PR(ITABILITY1 TO ! ACTUAL PR(ITABILITY ( CAPITAL4 ,IT IS 
! LATT] :I* 5C\RAGES OR DISC\RAGES PRIVATE CR$IT EXPANSION4 ,A /ATIC1 
OR DECL9+1 RATE ( CAPITAL =MATION IMPLIES A CONTRACTION ( ! PRIVATE 
CR$IT /RUCTURE4 ,?IS CAN BE COMP5SAT$ ?R\< GOV]NM5T BORR[+S4 ,9 
?IS WAY ! GOV]NM5T AVAILS ITSELF ( PRIVATELY [N$ PRODUCTIVE RES\RCES4 
,?IS 0TRANSF]0 ( ECONOMIC CONTROL /IMULATES A 
0DEM&0 ( A SPECIFIC K9D1 NAMELY1 A NONM>KET DEM& = PUBLIC 
UND]TAK+S ABOVE ?OSE ?AT 0NORMALLY0 FALL UND] ! CATEGORY ( 
GOV]NM5T EXP5DITURES4 ,! SAME PR9CIPLE :I* MADE ! ACTUAL W> ECONOMY A 
FULL-EMPLOYM5T ECONOMY ALSO 9CREASES ECONOMIC ACTIVITY 9 ! MIX$ ECONOMY1 
OR RA!R1 ! =M] DI/9CTION BETWE5 W>TIME & PEACETIME PRODUCTION HAS 
L>GELY DISAPPE>$ & ! MIX$ ECONOMY OP]ATES1 ?\< TO A LESS] EXT5T1 
AS IF IT W]E A P]MAN5T W> ECONOMY4 ,9 ?IS WAY1 & UNTIL REC5TLY1 ! 
MIX$ ECONOMY HAS BE5 SUFFICI5TLY 0/ABILIZ$0 TO SIDETRACK SU* 
DEPRESSIONS AS ?OSE ?AT OCCURR$ 9 ! P]IOD BETWE5 ! TWO WORLD 
W>S4 

,I,I,I 

,A P]IOD ( ECONOMIC EXPANSION NE$ NOT BE 9FLATION>Y1 EV5 ?\< ! 
MONEY SUPPLY 9CREASES ) ! RIS+ DEBT1 BECAUSE PRODUCTIVITY MAY 9CREASE 
SUFFICI5TLY TO EQUATE ! SOCIAL SUPPLY & DEM&4 ,9 ANY CASE1 IT IS NOT ! 
QUANTITY ( MONEY & ! EFFECT ( ! CR$IT ME*ANISM UPON ! QUANTITY ( 
MONEY :I* DET]M9ES PRICE RELATIONS & ! /ATE ( PRODUCTION4 ,RA!R1 IT 
IS ! O!R WAY >\ND2 ! /ATE ( SOCIAL PRODUCTION DET]M9ES ITS 
PR(ITABILITY &1 !RE)1 PRICE & MONEY RELATIONS4 ,AN EXCESSIVE MONET>Y 
GR[? BY WAY ( CR$IT EXPANSION & DEFICIT F9ANC+ MAY1 H[EV]1 LEAD TO 
9FLATION1 JU/ AS CR$IT CONTRACTION & TOO LITTLE MONEY T5DS TO BE 
DEFLATION>Y4 ,!RE MU/ BE ! 0RI<T0 QUANTITY ( MONEY TO AVOID 
BO? EXCESSIVE 9FLATION & EXCESSIVE DEFLATION &1 ACCORD+ TO ,KEYNES1 IT 
IS ! GOV]NM5T'S FUNCTION TO >RANGE = ?IS 0RI<T 
QUANTITY40 ,FISCAL POLICIES T[>D ?IS 5D >E1 ( C\RSE1 ALSO MONET>Y 
POLICIES AS !Y M]ELY ALLOCATE ! 0RI<T QUANTITY0 ( MONEY 9 
! DIRECTION MO/ CONDUCIVE TO ECONOMIC /ABILITY & GR[?4 

,! ,KEYNESIANS SEE ! ECONOMY AS A MONEY ECONOMY & T5D TO =GET ?AT IT 
IS A MONEY-MAK+ ECONOMY4 ,9 !IR VIEWS MONEY APPE>S AS A M]E 
9/RUM5T ( MANIPULATION = TURN+ 9SUFFICI5T 9TO SUFFICI5T SOCIAL 
PRODUCTION4 ,9 ! PREVAIL+ SOCIETY1 H[EV]1 MONEY IS ! BEG9N+ & ! 
5D ( PRODUCTION2 A GIV5 QUANTITY ( MONEY1 OR CAPITAL1 MU/ BE TURN$ VIA 
! PRODUCTION PROCESS 9TO A GREAT] QUANTITY4 ,CAPITALI/ PRODUCTION & 
CAPITAL ACCUMULATION >E SYNONYM\S4 

,AS 9 E>LY CAPITALISM1 SO 9 ! MIX$ ECONOMY1 CAPITAL IS NOT ACCUMULAT$ 
TO 9CREASE PRODUCTION BUT PRODUCTION IS 9CREAS$ TO ACCUMULATE CAPITAL4 
,NATIONAL PRODUCTION CAN BE 9CREAS$ ?R\< ! ACCUMULATION ( PRIVATE & 
PUBLIC DEBTS1 BUT ! ACCUMULATION ( DEBTS IS NOT ! ACCUMULATION ( CAPITAL4 
,IT IS = ?IS REASON ?AT ! PRIVATE CR$IT /RUCTURE CONTRACTS AS SOON AS 
! EXPANSION ( PRODUCTION IS NOT AN ACCUMULATION ( CAPITAL4 ,IT IS ONLY ! 
ACCUMULATION ( PUBLIC DEBTS :I* CAN 5L>GE SOCIAL PRODUCTION :]E & :5 
IT FAILS TO 9CREASE ( ITS [N ACCORD1 I4E41 ?R\< CAPITAL =MATION 
DET]M9$ BY ! M>KET4 

,! 9CREASE ( SOCIAL DEM& ?R\< GOV]NM5T PUR*ASES ) BORR[$ 
MONEY HAS BE5 AN 9FLATION>Y PROCESS4 ,USUALLY1 9FLATION IS DEF9$ AS A 
SITUATION :]E9 ! NATIONAL MONEY 9COME IS RIS+ FA/] ?AN ! NATIONAL 
REAL 9COME1 I4E41 :]E !RE IS TOO MU* MONEY 9 RELATION TO ! AVAILABLE 
GOODS4 ,IF IT W]E TRUE ?AT GOV]NM5T F9ANC+ 9CREASES PRODUCTION 
G5]ALLY1 AS ITS ADVOCATES CLAIM1 ?IS RIS+ PRODUCTION %\LD CLOSE ! GAP 
BETWE5 MONEY 9COME & REAL 9COME &1 ?US1 5D ! 9ITIAL 9FLATION>Y 
PRESSURE4 ,BUT 9FLATION1 H[EV] CREEP+1 IS CONT9U\S4 ,APP>5TLY1 !RE IS 
ALWAYS TOO MU* MONEY 9 RELATION TO AVAILABLE SUPPLIES4 ,9 FACT1 H[EV]1 
!RE IS AN ABUNDANCE ( GOODS & NOT 5\< PUR*AS+ P[]4 ,! 9FLATION 
IS1 ?US1 NOT EXPLA9ABLE AS A SITUATION 9 :I* TOO MU* MONEY *ASES AN 
9SUFFICI5T QUANTITY ( GOODS4 ,IT IS RA!R A ME*ANISM :I* CURTAILS 
CONSUMPTION REG>DLESS ( ! SUPPLY SO AS TO MITIGATE ! LOSS ( 
PR(ITABILITY CAUS$ BY GOV]NM5T-9DUC$ PRODUCTION4 

,I,V 

,ECONOMI/S >E NOT 9 ! HABIT ( DI/+UI%+ BETWE5 GOV]NM5T-9DUC$ 
PRODUCTION & PRIVATE CAPITAL =MATION1 BETWE5 GOV]NM5T-CREAT$ DEM& & 
M>KET DEM&4 ,!Y ?9K ( CAPITAL =MATION AS A M]E ADDITION ( TOOLS TO 
TURN \T MORE PRODUCTS NO MATT] :AT !SE PRODUCTS MAY BE4 ,SO LONG AS TOTAL 
NATIONAL PRODUCTION 9 T]MS ( MONEY IS GR[+ & UNEMPLOYM5T IS HELD 9 
*ECK !Y >E SATISFI$4 ,ONLY :5 /AGNATION DISPLACES EXPANSION DO !Y 
/>T LOOK+ = MORE 0P]MAN5T0 S\RCES ( DEM&4 

,:AT C\LD !SE S\RCES BE8 ,PRIVATE CAPITAL =MATION BY WAY ( ! 
PRODUCTION ( M>KETABLE GOODS F9DS ITS OBS]VABLE LIMITS 9 A 
DIM9I%+ M>KET DEM&4 ,9 ORD] NOT TO R$UCE ! M>KETABILITY ( 
PRIVATELY PRODUC$ COMMODITIES /ILL FUR!R1 GOV]NM5T-9DUC$ PRODUCTION 
MU/ BE *ANNEL$ 9TO NONM>KET FIELDS-PUBLIC WORKS1 >MAM5TS1 
SUP]FLUITIES & WA/E4 ,= ! SAME REASON1 & CONTR>Y TO ,KEYNES'S 
SUGGE/IONS1 PRODUCTION CANNOT BE 9CREAS$ BY WAY ( 9COME DI/RIBUTION ?AT 
FAVORS ! POOR4 

,AL?\< IT IS TRUE ?AT ! ECONOMY'S ACTUAL1 OR POT5TIAL1 
PRODUCTIVE CAPACITY W\LD ALL[ = A PRODUCTION ( 0ABUNDANCE10 IT 
REMA9S1 AS REG>DS ITS PR(IT REQUIREM5TS1 A 0SC>CITY ECONOMY40 
,BECAUSE ! PRODUCTION ( COMMODITIES IS M]ELY A NECESS>Y ME*ANISM = ! 
PRODUCTION ( PR(ITS & ! AUGM5TATION ( CAPITAL1 ! SY/EM'S 
SUCCESS OR FAILURE CANNOT BE MEASUR$ BY ! ABUNDANCE OR %ORTAGES ( 
COMMODITIES BUT ONLY BY ! RATE ( PR(IT & ACCUMULATION4 ,DESPITE A GREAT 
AM\NT ( UNSALABLE SURPLUS PRODUCTION1 ?IS SY/EM MU/ FIR/ RAISE ! 
PR(ITABILITY ( CAPITAL BE=E IT CAN 5L>GE SOCIAL CONSUM+ P[] ?R\< 
HI<] WAGES & GREAT] SOCIAL WELF>E4 

,WAGES >E 0CO/S ( PRODUCTION0 &1 IF 9CREAS$ )\T A 
CORRESPOND+ L>G] 9CREASE ( LABOR PRODUCTIVITY1 WILL R$UCE ! 
PR(ITABILITY ( CAPITAL4 ,WAGES DO RISE UND] CAPITALISM1 BUT ONLY UND] 
CONDITIONS ( RAPID CAPITAL ACCUMULATION4 ,CAPITAL =MATION REPRES5TS ! 
EXCESS ( PRODUCTION OV] :AT SOCIETY CONSUMES4 ,IT MAY1 & G5]ALLY DOES1 
LEAD TO 9CREAS$ CONSUMPTION1 BUT CONSUMPTION ITSELF CANNOT LEAD TO CAPITAL 
=MATION4 

,EA* CAPITAL 5TITY1 :E!R L>GE OR SMALL1 MU/ TRY TO KEEP ITS PRODUCTION 
CO/S AT A M9IMUM 9 ORD] TO REA* ! PR(IT MAXIMUM4 ,EXTRA PR(ITS ?R\< 
MONOPOLIZATION & PRICE MANIPULATION 9CREASE COMPETITION BETWE5 ! LESS 
PRIVILEG$ CAPITAL 5TITIES & TRANSF] PR(ITS FROM ! WEAK] TO ! 
/RONG] 5T]PRISES4 ,AL?\< A P>TIAL ESCAPE FROM COMPETITION FREES SOME 
5T]PRISES FROM A /EADY & PRESS+ CONC]N ) PRODUCTION CO/S1 IT 
MAGNIFIES ?IS CONC]N = O!R 5T]PRISES4 ,9 ! LONG RUN1 ( C\RSE1 ! 
RESULT+ DECREASE ( PR(ITABILITY ( ! MORE COMPETITIVE 5T]PRISES WILL 
ALSO DECREASE ! AM\NT ( PR(ITS ?AT CAN BE TRANSF]R$ TO ! LESS 
COMPETITIVE CAPITALS4 ,AL?\<1 ACTUALLY1 ! :OLE PROCESS IS PLAY$ \T 9 
! M>KET SPH]E1 IT HAS ITS S\RCE1 & F9DS ITS LIMITS1 9 ! SPH]E ( 
PRODUCTION4 

,AS LONG AS COMPETITION PREVAILS IT WILL C5T] ON ! CO/S ( PRODUCTION 
& WILL1 ?US1 DET]M9E WAGES TO ! EXT5T ?AT !Y CANNOT BE L>G] ?AN 
IS COMPATIBLE ) AN 5T]PRISE'S PR(ITABILITY4 ,TO ! EXT5T ?AT 
GREAT] PR(ITABILITY IS REA*$ ?R\< PR(IT TRANSF]S VIA ! M>KET+ & 
PRICE ME*ANISM1 HI<] WAGES 9 SOME 5T]PRISES >E BAS$ ON CORRESPOND+LY 
L[] WAGES 9 O!RS4 ,JU/ AS ! TOTAL SOCIAL PR(IT CANNOT BE 9CREAS$ BY 
! 09EQUALITY0 ( PR(IT DI/RIBUTION1 SO TOTAL WAGES AT ANY ONE 
TIME REMA9 :AT !Y >E NO MATT] H[ !Y MAY BE DI/RIBUT$ AMONG DIFF]5T 
LABOR+ GR\PS4 

,GOV]NM5T DET]M9ATION ( WAGES PRESUPPOSES GOV]NM5T DET]M9ATION ( 
PR(ITS & VICE V]SA1 & EA* IS EQUALLY IMPOSSIBLE )9 ! M>KET 
ECONOMY :E!R MIX$ OR NOT4 ,! DEM& = A HI<] PROP5SITY TO CONSUME BY 
WAY ( HI<] WAGES AM\NTS TO A REQUE/ = 5D+ ! M>KET ECONOMY &1 IF 
TAK5 S]I\SLY1 W\LD REQUIRE C5TRALIZ$ CONTROL ( ! :OLE ( ! ECONOMY 
& A PLANN$ DET]M9ATION ( ITS PRODUCTION1 CONSUMPTION1 & EXPANSION4 
,%ORT ( ?IS1 ! PROP5SITY TO CONSUME WILL V>Y ) ! ABILITY TO 
ACCUMULATE CAPITAL4 ,IT IS = ?IS REASON ?AT GOV]NM5T-MANIPULAT$ WAGE 
9CREASES >E NOT AMONG ! V>I\S 0BUILT-9 /ABILIZ]S0 ( ! 
MIX$ ECONOMY1 & ?AT IT IS ALWAYS ! L[E/ WAGE :I* SETS ! /&>D 
= GOV]NM5T M9IMUM WAGE LEGISLATION4 

,9CREAS+ ! PROP5SITY TO CONSUME ?R\< ! R$I/RIBUTION ( 9COME 9 
FAVOR ( ! POOR] CLASSES %\LD %[ UP 9 9COME /ATI/ICS4 ,:]E IT DOES1 
IT DOES SO ONLY ?R\< 09T]PRETATION10 NOT AS AN UNDISPUTABLE 
FACT4 ,REC5T /UDIES ( 9COME DI/RIBUTION HAVE REVEAL$ ?AT1 AL?\< WAGES 
HAVE 9CREAS$1 ! DI/RIBUTION ( NATIONAL 9COME AMONG ! DIFF]5T CLASSES 
HAS H>DLY *ANG$4 ,!RE HAVE BE5 %IFTS )9 ! HI<-9COME BRACKETS & 
SOME ( !SE %IFTS UND\BT$LY REFLECT ! EXPANSION ( ! ECONOMY'S 
PUBLIC SECTOR AT ! EXP5SE ( ! PRIVATE SECTOR4 ,DESPITE !SE %IFTS1 
H[EV]1 & ) REG>D TO TOTAL SOCIAL PRODUCTION-PRIVATE & 
PUBLIC-! GAP BETWE5 PRODUCTION & CONSUMPTION GETS WID]1 NOT 
N>R[]4 ,BECAUSE AN 9CREAS+ P>T ( SOCIAL PRODUCTION IS ( A NONPR(ITABLE 
NATURE1 ! DECL9E ( PRIVATE CAPITAL PRODUCTION APPE>S AS AN APP>5T 
R$I/RIBUTION ( 9COME )\T 9CREAS+ ! PROP5SITY TO CONSUME1 LEA/ ( 
ALL BY WAY ( HI<] WAGES4 

,V 

,IT IS NOT BY 9CREAS+ ! PROP5SITY TO CONSUME1 9 ! PROP] S5SE ( 
! T]M1 ?AT ! MIX$ ECONOMY SOLVES ! PROBLEM ( 9SUFFICI5T EFFECTIVE 
DEM&4 ,YET1 IT DOES 9CREASE EMPLOYM5T & PRODUCTION BY WAY ( 
0CONSUMPTION02 BUT ?IS 0CONSUMPTION0 TAKES ON ! =M 
( PUBLIC WORKS & ! PRODUCTION ( WA/E1 PR$OM9ANTLY 9 ! =M ( 
>MAM5TS4 ,AS F> AS PRIVATE CAPITAL 0AS A :OLE' IS CONC]N$1 ! 
GOV]NM5T-9DUC$ P>T ( TOTAL PRODUCTION FALLS \T ( ! M>KET SY/EM & 
?US \T ( ! PRIVATE ACCUMULATION PROCESS4 ,IT FALLS 9 ! SPH]E ( 
CONSUMPTION :]E IT IS IRRETRIEVABLY LO/4 

,?IS REV]SES ! TRADITIONAL PROC$URE ( CAPITAL =MATION4 ,9/EAD ( 
EXP&+ CAPITAL AT ! EXP5SE ( CONSUMPTION ?R\< 0SAV+S10 
IT EXP&S PRODUCTION BY EXP&+ GOV]NM5T EXP5DITURES ?AT LIE 9 ! 
SPH]E ( CONSUMPTION4 ,NONE!LESS1 REC5T HI/ORY HAS DEMON/RAT$ ?AT IT IS 
POSSIBLE TO HAVE A 0PROSP]\S0 DEVELOPM5T UND] CONDITIONS ( 
RELATIVELY %R9K+ M>KETS & GOV]NM5T-9DUC$ PRODUCTION BECAUSE ( ! 
HI< LEVEL ( PRODUCTIVITY4 ,:5 KEPT )9 DEF9ITE B\NDS RELATIVE TO ! 
TOTAL PR(ITABILITY ( ! NATIONAL ECONOMY1 GOV]NM5T-9DUC$ PRODUCTION MAY 
JU/ COMP5SATE = ! DECL9+ M>KET DEM& )\T S]I\SLY IMPAIR+ 
EI!R ! PR(ITABILITY ( CAPITAL OR ! PROP5SITY TO CONSUME4 ,! CO/S ( 
GOV]NM5T-9DUC$ PRODUCTION MAY BE TOL]ABLE BECAUSE !Y >E DI/RIBUT$ 
OV] ! :OLE ( SOCIETY1 & OV] A LONG P]IOD ( TIME1 BY WAY ( 9FLATION 
& DEFICIT F9ANC+4 ,H[EV]1 IF TOO MU* ( SOCIAL PRODUCTION IS CONSUM$ 9 
:ATEV] =M1 !RE IS NOT ONLY A SMALL] SUPPLY ( CAPITAL = 9VE/M5T 
PURPOSES BUT ALSO A L[] RATE ( PR(IT = ! EXI/+ CAPITAL &1 
CONSEQU5TLY1 A DIM9I%+ 9C5TIVE TO 9VE/4 ,:5 ! 9CREASE 9 
GOV]NM5T-9DUC$ PRODUCTION IS 5\< TO R$UCE PRIVATE CAPITAL =MATION 
ABSOLUTELY1 ! GA9 9 PRODUCTION BY WAY ( ?IS TYPE ( PRODUCTION WILL ONCE 
MORE BE LO/ ?R\< ! LOSS ( PRODUCTION VIA PRIVATE CAPITAL EXPANSION4 ,A 
FUR!R 9CREASE 9 GOV]NM5T-9DUC$ PRODUCTION W\LD !N BE POSSIBLE ONLY 
AT ! EXP5SE ( CONSUMPTION 9 ?AT T]M'S TRUE S5SE4 

,?IS PROCESS MAY BE UND]/OOD BY ANALOGY ) ! W> ECONOMY 9 :I* ! 
9CREAS+ AM\NT ( WA/E PRODUCTION IS REALIZ$ BY WAY ( CONSUMPTION 
RE/RICTIONS AS WELL AS AT ! EXP5SE ( NEW CAPITAL 9VE/M5TS4 ,EV5TUALLY1 
H[EV]1 IT IS ONLY AT ! EXP5SE ( CONSUMPTION1 = ! CONT9UATION & 
5L>GEM5T ( WA/E PRODUCTION REQUIRES ! REPLACEM5T & EXT5SION ( ! 
PRODUCTIVE APP>ATUS4 ,UND] ACTUAL W> CONDITIONS WA/E PRODUCTION 9CREASES AT 
AN EV] FA/] RATE1 :ILE WA/E PRODUCTION 9 ANTICIPATION ( W>1 OR AS A 
MEANS TO FULL EMPLOYM5T1 CAN BE KEPT UND] CONTROL4 ,NONE!LESS1 A /EADY1 IF 
SL[1 9CREASE ( WA/E PRODUCTION 9 ! MIX$ ECONOMY REQUIRES ! 
MA9T5ANCE ( A C]TA9 RATE ( CAPITAL =MATION1 & ! NE$ = BO? ?IS 
DEF9ITE RATE ( CAPITAL =MATION & ! NECESS>Y AM\NT ( WA/E PRODUCTION 
WILL EV5TUALLY HAVE TO BE SECUR$ AT ! EXP5SE ( CONSUMPTION4 

,V,I 

,:AT IS H]E CALL$ WA/E PRODUCTION1 I4E41 ?AT AM\NT ( SOCIAL PRODUCTION 
C>RI$ ON TO COMP5SATE = ! RELATIVE /AGNATION ( PRIVATE CAPITAL 
PRODUCTION1 APPE>S TO ! CAPITALI/S AS AN UNAVOIDABLE1 IF EV51 AT TIMES1 
REGRETTABLE NECESSITY4 ,IT APPE>S AS NECESS>Y NOT ONLY TO ?OSE :OSE PR(ITS1 
OR LIVELIHOOD1 DEP5D ON IT1 BUT QUITE G5]ALLY4 ,UNABLE1 OR AT ANY RATE 
UNWILL+1 TO ADMIT TO ANY 9H]5T CONTRADICTIONS 9 ! PREVAIL+ MODE ( 
PRODUCTION1 OR TO ITS LONG-RUN 9COMPATIBILITY ) SOCIAL PROGRESS1 ECONOMIC 
DIFFICULTIES >E LAID AT ! DOOR ( EXT]NAL 5EMIES :O PROVIDE ! RATIONALE 
= ! GR[+ WA/E PRODUCTION4 

,9DE$1 A CONT9U\S CAPITAL ACCUMULATION APPE>S !ORETICALLY CONCEIVABLE 
AS LONG AS ! GR[+ PRODUCTIVITY ( LABOR PROVIDES ! PR(ITS NECESS>Y TO 
?IS 5D4 ,!RE WILL BE A CONT9U\S DISPLACEM5T ( LABOR BY MA*9]Y 
RELATIVE TO GR[+ CAPITAL1 BUT ?IS DOES NOT EXCLUDE AN ABSOLUTELY GR[+ 
LABOR =CE4 ,LIKEWISE1 ! 9CREASE ( EXPLOITATION CAN BE ACCOMPANI$ BY A 
CONT9U\S BETT]M5T ( LIV+ CONDITIONS4 ,H[EV]1 PR(ITS MU/ BE NOT ONLY 
PRODUC$ BUT ALSO REALIZ$ BY WAY ( SALES4 ,! EXPANSION ( CAPITAL MU/ BE 
! EXPANSION ( ! CAPITALI/ M>KET4 

,TAK+ ! M>KET 9TO CONSID]ATION1 A GIV5 MASS ( CAPITAL MAY BE 
SIMULTANE\SLY TOO L>GE & TOO SMALL1 ?AT IS1 IT MAY BE TOO L>GE ) 
REG>D TO ! REALIZATION ( PR(ITS BY WAY ( SALES &1 AT ! SAME TIME1 TOO 
SMALL TO BE ABLE TO 5L>GE ! M>KET BY WAY ( AN 5HANC$ PRODUCTIVITY4 ,! 
,AM]ICAN ECONOMY1 = 9/ANCE1 PRODUC$ 9 #aifb AB\T TW5TY P] C5T BEL[ 
ITS CAPACITY1 & ?IS 9 SPITE ( ! GREAT AM\NT ( GOV]NM5T-9DUC$ 
PRODUCTION4 ,IT C\LD 9CREASE PRODUCTION BY ALMO/ ONE-FIF? ( ! PRES5T 
NATIONAL PRODUCT )\T ADDITIONAL CAPITAL EQUIPM5T & )\T EXHAU/+ 
! LABOR SUPPLY4 ,YET1 IT C\LD NOT PR(ITABLY SELL ! 9CREAS$ \TPUT1 & 
IT C\LD NOT GIVE IT AWAY1 EI!R1 )\T CUTT+ D[N ON SALES ?AT >E /ILL 
PR(ITABLE4 ,9 VIEW ( ! PRES5T M>KETS1 ! PRODUCTION ( ! ,AM]ICAN 
ECONOMY IS OBVI\SLY TOO L>GE2 NOR DOES !RE SEEM TO BE ANY WAY ( REALIZ+ 
PR(ITS FROM A /ILL L>G] PRODUCTION4 

,NEV]!LESS1 TO ALL B\RGEOIS ECONOMI/S EXI/+ CAPITAL APPE>S TOO 
SMALL2 ALL ( !M CLAMOR = A FA/] RATE ( CAPITAL =MATION4 ,?IS W\LD1 
( C\RSE1 9CREASE PRODUCTION & REQUIRE CORRESPOND+LY L>G] M>KETS1 
AL?\< EV5 ! EXI/+ CAPITAL EQUIPM5T IS NOT FULLY UTILIZ$4 ,= ! 
0RADICAL0 ,KEYNESIANS ?IS PRES5TS NO PROBLEM4 ,9 !IR REASON+1 
EXTRA M>KET DEM& CAN BE CREAT$ AT WILL ?R\< ADDITIONAL GOV]NM5T 
SP5D+ & A FUR!R DI/RIBUTION ( 9COME TO /IMULATE ! PROP5SITY TO 
CONSUME4 ,BUT GOV]NM5TS ( MIX$ ECONOMIES REPRES5T ! 9T]E/S ( PRIVATE 
CAPITAL4 ,ECONOMIC EXPANSION BY WAY ( DEFICIT SP5D+ IS A SL[ =M ( 
PR(IT EXPROPRIATION & IS RESORT$ TO BECAUSE GOV]NM5TS DO NOT WANT TO 
EXPROPRIATE CAPITAL4 ,TOO MU* DEFICIT F9ANC+1 H[EV]1 IS A SL[ =M ( 
CAPITAL EXPROPRIATION & IT IS ONLY ! =CE ( CIRCUM/ANCES1 NOT ! IDEAS 
( ! ,KEYNESIANS1 :I* WILL 9DUCE GOV]NM5TS TO 9CREASE PRODUCTION BY A 
CONT9U\S 9CREASE ( ! NATIONAL DEBT4 

,ASIDE FROM ALL !ORY1 CAPITALI/S1 TOO1 SEE A L>G] CAPITAL AS A SOLUTION 
TO ! ECONOMIC PROBLEM4 ,ONLY UND] CONDITIONS ( RAPID CAPITAL =MATION WILL 
! SOCIAL DEM& BE L>GE 5\< TO EMPLOY ALL1 OR NE>LY ALL1 PRODUCTIVE 
RES\RCES4 ,UND] LAISSEZ-FAIRE CONDITIONS ! OV]PRODUCTION ( 
CAPITAL1 & ! OV]PRODUCTION ( COMMODITIES AS ITS M>KET EXPRESSION1 WAS 
ALWAYS OV]COME1 AFT] A P]IOD ( DEPRESSION1 BY AN 5HANC$ CAPITAL 
ACCUMULATION4 ,PR(ITS :I* C\LD NOT BE REALIZ$ ON A SMALL] SCALE ( 
PRODUCTION C\LD BE REALIZ$ ON A L>G] SCALE ( PRODUCTION4 ,:]EAS ! 
SMALL] CAPITAL HAD BE5 UNPR(ITABLE1 ! L>G] CAPITAL WAS ONCE AGA9 
PR(ITABLE4 ,! REASON = ?IS WAS TO BE F\ND 9 ! /RUCTURAL *ANGES :I* 
CAPITAL UND]W5T DUR+ ! DEPRESSION P]IOD4 ,A L>G] SCALE ( PRODUCTION 
= RELATIVELY FEW] 5T]PRISES & A MORE FAVORABLE RELATION%IP BETWE5 
WAGES & PR(ITS RE/OR$ A PREVI\SLY LO/ 0BALANCE0 BETWE5 
CAPITAL ACCUMULATION & ITS PR(ITABILITY4 

,UNUS$ CAPACITY IS HELD TO BE ONE MORE REASON = A*IEV+ A L>G] 
CAPITAL4 ,! UNUS$ EQUIPM5T IS CONSID]$ 0OBSOLETE0 BECAUSE IT 
IS NOT COMPETITIVE &1 !RE=E1 NOT PR(ITABLE4 ,9 FACT1 A FULL USE ( 
CAPACITY W\LD BE LESS PR(ITABLE ?AN ITS P>TIAL USE1 NOT ONLY BECAUSE !RE 
IS NO CORRESPOND+ DEM& = A L>G] PRODUCTION BUT BECAUSE MANY FIRMS & 
CORPORATIONS >E COMPETITIVE 7NATIONALLY AS WELL AS 9T]NATIONALLY7 ONLY 9 SO 
F> AS !Y OP]ATE )1 & LIMIT !MSELVES TO1 ! MO/ UP-TO-DATE 
TE*NICAL EQUIPM5T & ! L[E/ LABOR CO/S4 ,9 ORD] TO 9CREASE !IR 
M>KETS !Y MU/ BECOME /ILL MORE COMPETITIVE1 I4E41 9CREASE ! 
0OBSOLESC5CE0 ( !IR CAPITAL EQUIPM5T BY AN 5HANC$ CAPITAL 
=MATION4 

,A L>G] CAPITAL REPRES5TS A MORE EFFICI5T PRODUCTIVE APP>ATUS ABLE TO 
\TPRODUCE LESS EFFICI5T CAPITALS1 ?US CAPTUR+ !IR M>KETS AS WELL AS 
5L>G+ ! M>KET G5]ALLY4 ,DESIGN$ & BUILT UP1 9 ! FIR/ PLACE1 ) 
A VIEW T[>DS AN EXP&+ WORLD M>KET1 ! PRODUCTIVE APP>ATUS ( 
CAPITALI/ICALLY ADVANC$ C\NTRIES EXCE$S ! SCOPE ( !IR NATIONAL 
M>KETS4 ,! COMB9$ PRODUCTION ( ! 9DU/RIAL NATIONS EXCE$S ! SCOPE ( 
! WORLD M>KET1 UNLESS A G5]AL1 RAPID CAPITAL =MATION EXP&S ! WORLD 
M>KET AS FA/ AS 9T]NATIONAL PRODUCTION4 ,:ILE ?IS IS NOT IMPOSSIBLE1 IT IS 
SELDOM ! CASE4 ,SOME NATIONS ACCUMULATE FA/]1 OR SUFF] MORE SEV]E 
DEPRESSIONS1 ?AN O!RS4 ,! RESULT+ *ANGES 9 ECONOMIC P[] RELATIONS >E 
ALSO EXP]I5C$ AS %IFTS 9 POLITICAL P[] RELATIONS1 & NATIONAL ECONOMIC 
COMPETITION TURNS 9TO IMP]IALI/IC COMPETITION & W>4 

,UND] N9ETE5?-C5TURY CONDITIONS IT WAS EASI] TO OV]COME A TEMPOR>Y 
OV]ACCUMULATION ( CAPITAL BY MEANS ( DEPRESSIONS1 :I* MORE OR LESS 
AFFECT$ CAPITAL ON AN 9T]NATIONAL SCALE4 ,AT ! TURN ( ! C5TURY IT WAS 
NO LONG] POSSIBLE TO *ANGE ! 9T]NATIONAL CAPITAL /RUCTURE BY WAY ( 
DEPRESSION & TO REA*1 !REBY1 A NEW BASIS = ! RESUMPTION ( ! 
ACCUMULATION PROCESS4 ,:AT WAS /ILL POSSIBLE NATIONALLY WAS NO LONG] 
EFFECTIVE 9T]NATIONALLY BECAUSE1 MORE ?AN BE=E1 ECONOMIC COMPETITION WAS 
N[ SUPPLEM5T$ ) POLITICAL-MILIT>Y COMPETITION4 ,! 9T]NATIONAL 
CONC5TRATION ( CAPITAL1 NECESS>Y = ! RESUMPTION ( ! CAPITAL 
ACCUMULATION PROCESS1 WAS NO LONG] AN 0AUTOMATIC0 RESULT ( 
ECONOMIC CRISIS BUT C\LD ONLY BE BR\<T AB\T DIRECTLY1 ?R\< GOV]NM5T 
09T]V5TIONS0 BY WAY ( W>4 

,! RESUMPTION ( ! ACCUMULATION PROCESS 9 ! WAKE ( A 
0/RICTLY0 ECONOMIC CRISIS 9CREAS$ ! G5]AL SCALE ( 
PRODUCTION4 ,W>1 TOO1 RESULT$ 9 9CREAS$ ECONOMIC ACTIVITY4 ,9 EI!R CASE1 
CAPITAL EM]G$ MORE CONC5TRAT$ & C5TRALIZ$ BO? 9 SPITE ( & BECAUSE 
( ! ACCOMPLI%$ DE/RUCTION ( CAPITAL4 ,DESPITE ! LOSSES ( SOME NATIONS1 
! GA9S ( O!RS W]E L>GE 5\< TO 9ITIATE AN APP>5TLY NEW P]IOD ( 
G5]AL CAPITAL EXPANSION SOON TO EXCE$1 9 T]MS ( WORLD PRODUCTION1 PREW> 
LEVELS ( PRODUCTION4 ,9 ITS EFFECT1 !N1 W> PRODUCTION WAS NOT REALLY WA/E 
PRODUCTION BUT A M$IUM = ! RESUMPTION ( ! CAPITAL =MATION PROCESS4 ,9 
?IS S5SE1 WA/E PRODUCTION WAS NOT ONLY A SUBSIDY TO >MAM5TS PRODUC]S BUT 
A PRECONDITION = ! PR(ITABILITY ( PO/W> CAPITALISM4 ,?IS IS AN 
ADDITIONAL REASON :Y1 G5]ALLY1 CAPITALI/S OBJECT TO USEFUL PUBLIC WORKS & 
WELF>E SP5D+ BUT NOT TO AN 9CREASE 9 0DEF5SE0 EXP5DITURES4 
,ASIDE FROM IDEOLOGICAL CONSID]ATIONS1 EXP]I5CE %[S ?AT ECONOMIC 
DIFFICULTIES CAN BE RESOLV$ BY =CE1 OR ?AT ! RETA9M5T ( ECONOMIC 
PRIVILEGES MAY REQUIRE MILIT>Y 9T]V5TION4 

,!SE NOTIONS >E NO D\BT 9SANE 9 VIEW ( ! DE/RUCTIV5ESS ( ATOMIC 
W>F>E4 ,IT IS1 H[EV]1 IMPOSSIBLE TO PROCE$ RATIONALLY 9 AN IRRATIONAL 
SOCIETY4 ,! RECOGNITION ?AT W> CAN NO LONG] SOLVE ! PROBLEMS ?AT BESET 
! CAPITALI/ WORLD DOES NOT PREV5T A =M ( BEHAVIOR :I* MAY LEAD TO W>4 
,NO CAPITALI/ DESIR$ ! LOSSES ( DEPRESSION1 YET ! REL5TLESS COMPETITION 
= CAPITAL NONE!LESS L$ 9TO CRISIS & DEPRESSION2 9 O!R WORDS1 IT WAS 
! 0NORMAL0 BEHAVIOR :I* CAUS$ ! 0ABNORMALITY0 ( 
! CRISIS4 ,IT IS NOT DIFF]5T ) REG>D TO W>4 ,! REL5TLESS DRIVE = 
POLITICAL & ECONOMIC DOM9ANCE1 EI!R TO GA9 OR TO RETA9 IT1 IS ! 
\TCOME & SUM TOTAL ( ALL ! ASOCIAL BEHAVIOR ?AT COMPRISES SOCIAL LIFE 
UND] CAPITALISM4 

,! RECOGNITION ?AT W> WILL BE SUICIDE DOES NOT AFFECT ! DRIFT T[>DS 
W> & ?OSE :O MAKE POLITICAL DECISIONS >E NO LESS TRAPP$ 9 ?IS 
CUL-DE-SAC ?AN ! EMASCULAT$ & 9DIFF]5T MASSES4 ,SIMPLY BY MAK+ ! 
0RI<T0 DECISIONS1 AS DET]M9$ BY ! SPECIFIC NE$S ( !IR 
NATIONS & ! SECURITY ( !IR SOCIAL /RUCTURES1 !Y MAY DE/ROY 
!MSELVES & A L>GE P>T ( ! WORLD4 ,!Y MAY REALIZE ! 
0OBSOLESC5CE0 ( W>1 YET !Y CANNOT HELP PREP>+ = IT 
BECAUSE A DIS>M$ CAPITALISM W\LD SOON CEASE TO EXI/4 ,!Y PREP>E = W> 
NOT ONLY BECAUSE ! PRODUCTION ( WA/E PROVIDES SOME K9D ( ECONOMIC 
/ABILITY1 BUT EV5 MORE SO BECAUSE ( AN UNSPOK5 SUSPICION1 IF NOT AW>5ESS1 
?AT NO?+ REALLY GU>ANTEES ! FUTURE ( CAPITALISM EXCEPT T]RORIZATION ( 
! WORLD4 ,BECAUSE ( ! 5ORMITY ( NUCLE> W> ! HOPE IS (T5 EXPRESS$ 
?AT SU* A W> WILL BE AV]T$1 AL?\< IT IS GRANT$ ?AT IT MAY BREAK \T 
0ACCID5TALLY40 ,)\T DECISIVE SOCIAL *ANGES1 H[EV]1 IT WILL 
BE ! AVOIDANCE ( W> :I* WILL BE ! 0ACCID5T0 RA!R ?AN 
ITS OCCURR5CE4 

,V,I,I 

,! ,SECOND ,WORLD ,W> FAIL$ TO PROVIDE ! IMPETUS = A PRIVATE CAPITAL 
EXPANSION1 DET]M9$ BY ! M>KET1 ON A SCALE SUFFICI5T TO DIM9I% 
GOV]NM5T-9DUC$ DEM&4 ,ANY SIGNIFICANT DECREASE ( GOV]NM5T SP5D+ 9 
! PO/W> WORLD L$ TO ECONOMIC CONTRACTIONS :I* C\LD BE ALT]$ ONLY 
?R\< ! RESUMPTION ( L>GE-SCALE GOV]NM5T SP5D+4 ,! BE/ ?AT C\LD 
BE EXPECT$ WAS ! /ABILIZATION ( ! RELATION%IP BETWE5 PRIVATE 
PRODUCTION & GOV]NM5T SP5D+ AS IT EM]G$ 9 ! PO/W> WORLD4 ,BUT EV5 
?IS REQUIR$ A DEF9ITE RATE ( ECONOMIC GR[? 9 ORD] TO KEEP ! ECONOMY 
COMPETITIVE & TO PREV5T ! RISE ( UNEMPLOYM5T4 ,:ILE GOV]NM5TS TRI$ TO 
FO/] CAPITAL =MATION1 !IR LACK ( SUCCESS 9 ?IS RESPECT REQUIR$ AN 
9CREASE 9 GOV]NM5T-9DUC$ PRODUCTION :I* PUT NEW OB/ACLES 9 ! WAY ( 
PRIVATE CAPITAL EXPANSION4 ,AT TIMES BO? POLICIES W]E TRI$ ! IMPROVEM5T ( 
CAPITALI/ E>N+S BY WAY ( TAX R$UCTIONS & ! 9CREASE ( WA/E 
PRODUCTION ?R\< MORE DEFICIT F9ANC+4 ,BUT AS ! DEFICIT MU/ BE F9ANC$ 
\T ( PRIVATE PRODUCTION1 ?IS M]ELY AM\NTS TO GIV+ ) ! ONE H& :AT 
! O!R TAKES AWAY1 EV5 ?\< ! PROCESS IS !REBY /RET*$ \T OV] A 
LONG] P]IOD ( TIME4 

,H[ LONG A TIME8 ,?IS IS AN UNANSW]ABLE QUE/ION & JU/ BECAUSE IT CANNOT 
BE ANSW]$ ! >GUM5T 9 FAVOR ( L>G] GOV]NM5T DEFICITS APPE>S 
CONV9C+4 ,P]HAPS1 !RE WILL COME A TIME1 ALL[+ = PRIVATE CAPITAL 
=MATION RAPID & L>GE 5\< TO CAT* UP ) ! RIS+ NATIONAL DEBT & 
KEEP IT )9 MANAGEABLE PROPORTIONS4 ,P]HAPS NOT1 BUT EV5 ?IS CAN BE 
JU/IFI$ ON ! PR9CIPLE3 0AFT] US1 ! DELUGE40 

,H[ MU* CAN A GOV]NM5T TAX & BORR[8 ,OBVI\SLY NOT ! :OLE ( ! 
NATIONAL PRODUCT4 ,P]HAPS FIFTY P] C5T8 ,?IS W\LD COME CLOSE TO W>TIME 
CONDITIONS DUR+ :I* ! ,AM]ICAN ,GOV]NM5T PUR*AS$ R\<LY HALF ( ! 
NATIONAL PRODUCT4 ,UND] !SE CONDITIONS1 H[EV]1 ! RATE ( 9VE/M5T WAS 
#b4#i P] C5T ( GROSS NATIONAL PRODUCT-A RATE BEL[ ?AT ( ! 
DEPRESSION YE>S1 ) ! SOLE EXCEPTION ( #a#i#c#b1 :5 ! RATE DROPP$ TO #a4#e 
P] C5T4 ,A W> ECONOMY1 H[EV]1 IF 9DEF9ITELY CONT9U$1 WILL DE/ROY ! 
CAPITALI/ SY/EM4 ,AN 9CREASE ( WA/E PRODUCTION UP TO FIFTY P]C5T 9 ! 
PEACETIME MIX$ ECONOMY W\LD BE EQUIVAL5T TO ! CONDITIONS ( ! W> 
ECONOMY1 EXCEPT ?AT WA/E PRODUCTS DET]IORATE SL[LY 9/EAD ( BE+ 
DE/ROY$ \TRI<T4 ,H[EV]1 ACTUAL WA/E PRODUCTION 9 ! ,UNIT$ ,/ATES1 
I4E41 ! MILIT>Y BUDGET1 COMPRISES R\<LY T5 P] C5T ( GROSS NATIONAL 
PRODUCT1 :ILE TOTAL GOV]NM5T EXP5DITURES ACC\NT = AB\T ONE-F\R? ( 
GROSS NATIONAL PRODUCT4 ,!RE IS /ILL CONSID]ABLE LEEWAY BE=E ! 
CONDITIONS ( ! PEACETIME ECONOMY APPROA* ?OSE ( ! W>TIME ECONOMY4 

,PRIVATE CAPITAL CAN EXI/ & EV5 FL\RI% DESPITE A HI< RATIO ( 
GOV]NM5T SP5D+ TO NATIONAL PRODUCT4 ,!RE IS1 ( C\RSE1 AN ABSOLUTE 
CEIL+ :]E TAXATION WILL R$UCE RA!R ?AN 9CREASE SOCIAL PRODUCTION VIA 
! PUBLIC SECTOR4 ,BUT :AT ?IS CEIL+ IS PRECISELY1 OR :5 IT WILL BE 
REA*$1 IS NOT PR$ICTABLE4 ,! RATIO ( TAXES TO NATIONAL 9COME 9 ! MIX$ 
ECONOMIES V>IES BETWE5 ONE-F\R? & ONE-?IRD1 ,5GL& HAS ! HI<E/ & 
! ,UNIT$ ,/ATES ! L[E/ RATIO4 ,GOV]NM5T 9T]V5TION 9 ! ,WE/ 
,EUROPEAN NATIONS1 H[EV]1 DID NOT IMPLY ! GR[? ( WA/E-PRODUCTION BUT ! 
REVIVAL ( RECAPITALIZATION ( ! M>KET ECONOMY4 ,GOV]NM5TS >RANG$ = 
COMPULSORY1 OR NE>-COMPULSORY1 9/ITUTIONAL SAV+S1 & = ! RET5TION ( 
A L>GE %>E ( CORPORATE PR(ITS = RE9VE/M5T PURPOSES4 ,EXPANSION WAS 
A*IEV$ BY WAY ( DEFICIT F9ANC+ & 9FLATION4 

,?IS =C$ RECAPITALIZATION ( ,WE/]N ,EUROPE WAS NOT ! RESULT ( ! 
APPLICATION ( ! 0NEW ECONOMICS02 RA!R1 ! 
0APPLICATION0 WORK$ 9 ?IS P>TICUL> WAY BECAUSE ( ! 
CONDITIONS 9 :I* ,EUROPE F\ND ITSELF AFT] ! W>4 ,! 5ORM\S DE/RUCTION 
( CAPITAL1 BO? 9 VALUE & 9 PHYSICAL T]MS1 & ! OBSOLESC5CE ( A 
L>GE P>T ( ! SURVIV+ PRODUCTIVE APP>ATUS ALL[$ =1 & DEM&$1 A 
RAPID CAPITAL =MATION TO AVOID A TOTAL COLLAPSE ( ! PRIVATE PROP]TY 
SY/EM4 ,BO? CAPITAL & LABOR ACCEPT$ ! DEM&S ( GOV]NM5T TO WORK NOT 
= MORE CONSUMPTION BUT = CAPITAL ACCUMULATION4 ,&1 AS 9 TIMES PA/1 MORE 
CONSUMPTION BECAME A BYPRODUCT ( ! ACCEL]AT$ EXPANSION PROCESS4 

,! SAME 0ECONOMICS0 DID NOT HAVE SIMIL> RESULTS 9 ! ,UNIT$ 
,/ATES BECAUSE !RE WAS NO DE/RUCTION ( CAPITAL 9 EI!R VALUE OR PHYSICAL 
T]MS4 ,TO MA9TA9 ! GREATLY AUGM5T$ PRODUCTION AFT] ! W>1 & TO 
5L>GE IT1 REQUIR$ A F> GREAT] CONTROL ( WORLD ECONOMY ?AN WAS ACTUALLY 
A*IEVABLE4 ,SU* CONTROL C\LD NOT BE REALIZ$ AT ! EXP5SE ( ,EUROPEAN 
CAPITALISM2 ON ! CONTR>Y1 IT REQUIR$ ,EUROPE'S RECOV]Y4 ,PRIVATE 
PROP]TY CAPITALISM SIMPLY CANNOT BECOME A WORLD ECONOMY CONTROLL$ FROM A 
P>TICUL> C5T]1 SU* AS ! ,UNIT$ ,/ATES4 ,JU/ AS 9 EA* CAPITALI/ NATION 
! CAPITAL CONC5TRATION PROCESS CANNOT COMPLETE ITSELF )\T DE/ROY+ ! 
COMPETITIVE M>KET ECONOMY1 SO1 9T]NATIONALLY1 CAPITALISM CANNOT 9TEGRATE 
UND] ! DOM9ANCE ( A P>TICUL> NATION4 ,ECONOMIC 9TEGRATION ( WORLD 
ECONOMY PRESUPPOSES POLITICAL 9TEGRATION1 & ?IS IS AN IMPOSSIBILITY BECAUSE 
( ! COMPETITIVE NATURE ( CAPITAL PRODUCTION 9 A M>KET ECONOMY4 ,:AT WAS 
POSSIBLE AFT] ! W> WAS A RETURN TO PREW> CONDITIONS MODIFI$ BY ! 
POLITICAL *ANGES RESULT+ FROM ! W>1 ?AT IS1 ! RE/ORATION ( A 
TRUNCAT$ ,EUROPEAN ECONOMY TO A WORLD M>KET MADE SMALL] BY ! FUR!R SPREAD 
( AUT>*ISM 9 V>I\S NATIONS1 & ! EM]G5CE ( A COMPETITIVE 
0SECOND0 WORLD M>KET ?R\< ! CONSOLIDATION ( ! ,EA/]N 
P[] BLOC4 

,UND] C]TA9 CONDITIONS1 !N1 A MIX$ ECONOMY MAY EXP& ITS M>KET DEM& 
& PRIVATE CAPITAL =MATION 9 SPITE ( A HI< RATIO ( TAXES TO NATIONAL 
9COME1 :]EAS ANO!R MIX$ ECONOMY1 UND] DIFF]5T CONDITIONS1 MAY NOT BE 
ABLE TO 9CREASE ! M>KET DEM& & PRIVATE CAPITAL =MATION DESPITE A 
L[] RATIO ( TAXES TO NATIONAL PRODUCT4 ,WE/]N ,EUROPE'S 
0PROSP]\S0 RATE ( CAPITAL =MATION HAS ITS S\RCE 9 CONDITIONS 
RESULT+ FROM ! ,SECOND ,WORLD ,W>4 ,) ! 5D+ ( ! SPECIAL 9FLU5CES 
DUE TO !SE CONDITIONS1 ,WE/]N ,EUROPE1 LIKE ! ,UNIT$ ,/ATES1 WILL MO/ 
PROBABLY HAVE TO RESORT TO MORE WA/E PRODUCTION TO AVOID A NEW ECONOMIC 
DECL9E4 

,V,I,I,I 

,:ATEV] ! RATIO ( TAXES TO NATIONAL 9COME1 GOV]NM5T 9DUC$ 
PRODUCTION COMES UP AGA9/ ! LIMITATIONS ( PR(ITABLE M>KET PRODUCTION4 ,SO 
LONG AS ! 0PRIVATE SECTOR' DOM9ATES1 !RE IS NO WAY ( 9DULG+ 
9 PRODUCTION FREE ( PR(IT CONSID]ATIONS EXCEPT VIA ! PR(IT PRODUCTION ( 
PRIVATE CAPITAL4 ,! LIMITS ( PRIVATE PR(IT PRODUCTION >E1 F9ALLY1 ALSO 
! LIMITS ( GOV]NM5T-9DUC$ MAT]IAL PRODUCTION4 ,:]E PRIVATE CAPITAL 
DOM9ATES1 /ATE 9T]V5TION 9 ! ECONOMY CANNOT GO BEYOND ! PO9T :]E 
IT W\LD S]I\SLY ?REAT5 PRIVATE CAPITAL PRODUCTION4 ,IF ! ECONOMY CANNOT 
0PROSP]0 AT ?IS PO9T IT WILL NOT 0PROSP]40 ,TO *ANGE 
?IS SITUATION ?R\< F>!R-REA*+ 9T]V5TIONS W\LD N[ REQUIRE ! 
EXI/5CE ( GOV]NM5TS ABLE & WILL+ TO DE/ROY ! SOCIAL DOM9ANCE ( 
PRIVATE CAPITAL & TO PROCE$ FROM GOV]NM5T CONTROL TO GOV]NM5T 
[N]%IP4 

,BECAUSE GOV]NM5T CONTROL 9 ! MIX$ ECONOMY SUBORD9ATES ITSELF TO 
EXI/+ PROP]TY RELATIONS1 IT S]VES1 AT ?IS /AGE ( ! GAME1 ! 
9T]E/S ( BIG BUS9ESS4 ,:AT R$I/RIBUTION ( 9COME !RE IS CONSI/S1 TO 
A L>GE EXT5T1 ( A %IFT+ ( TAX MONEY FROM NON-SUBSIDIZ$ TO SUBSIDIZ$ 
SECTIONS ( ! ECONOMY4 ,IT AIDS ! CONC5TRATION ( CAPITAL ?R\< ! 
SUBSIDIZATION ( BIG BUS9ESS1 ! MA9 SUPPLI] ( GOV]NM5T-CREAT$ 
DEM&4 

,AL?\< PRODUCTION BY SUBSIDIZATION HELPS TO SECURE ! PR(ITABILITY ( 
DURABLE1 SU* AS DEF5SE1 9DU/RIES1 IT L[]S ! PR(ITABILITY ( 
NON-SUBSIDIZ$ 9DU/RIES4 ,! 9CREASE ( PRODUCTION L[]S ! SOCIAL AV]AGE 
RATE ( PR(IT1 D]IV$1 AS IT IS1 FROM ! PR(ITABILITY ( ! TOTAL SOCIAL 
CAPITAL & IMPAIRS ! G5]AL ABILITY TO 9CREASE PR(ITABILITY BY WAY ( NEW 
9VE/M5TS4 ,! M>KET = DURABLE GOODS %R9KS1 SO TO SPEAK1 
DESPITE ! CONT9U$ GR[? ( ! DURABLE GOODS PRODUC+ 9DU/RIES4 
,MOREOV]1 UNLESS SUBSIDIZ$ BY GOV]NM5T1 !RE IS NO REAL 9C5TIVE TO 9VE/ 
BECAUSE ( ! BLEAK M>KET \TLOOK4 ,COMPETITION C\LD =CE EXPANSION JU/ ! 
SAME1 BUT 9 A HI<LY-CONC5TRAT$ CAPITAL /RUCTURE1 PRICE AGREEM5TS RA!R 
?AN COMPETITION APPE> PREF]ABLE4 ,9 KEY 9DU/RIES1 PRICES >E FRE$ ( ALL 
M>KET PRESSURES & >E PU%$ UP AS UNUS$ CAPACITY 9CREASES1 ?US =C+ 
PRICE 9CREASES UPON ALL DEP5D5T 9DU/RIES4 ,PRICES RISE DESPITE ! 
/ILL-9CREAS+ PRODUCTIVITY ( LABOR :I* N[ FAILS TO OP]ATE AS ( OLD1 
NAMELY1 AS A WAY TO L>G] M>KETS4 

,9 ?REE DIFF]5T WAYS1 !N1 BIG BUS9ESS SECURES ITS PR(ITABILITY EV5 
UND] CONDITIONS ( A L[ RATE ( CAPITAL =MATION4 ,FIR/1 ?R\< ! 
EXPLOITATION ( ITS [N WORK]S2 SECOND1 ?R\< P>TAK+ 9 ! RESULTS ( 
EXPLOITATION ( O!R CAPITALI/S1 &1 F9ALLY1 ?R\< GOV]NM5T SUBSIDIES 
:I* TRANSF] TAX MONEY EXTRACT$ FROM ALL LAY]S ( SOCIETY TO BIG BUS9ESS4 
,:AT PR(IT IT APPROPRIATES MU/ COME FROM O!R SECTORS ( ! ECONOMY1 
!REBY L[]+ !IR [N ABILITY TO EXP&4 ,ONCE WA/E PRODUCTION BECOMES A 
P]MAN5T & 9/ITUTIONALIZ$ FACTOR 9 SOCIAL PRODUCTION1 A VICI\S CIRCLE 
BEG9S TO OP]ATE4 ,BY 9CREAS+ GOV]NM5T-9DUC$ PRODUCTION1 PRIVATE CAPITAL 
ACCUMULATION DIM9I%ES2 ! DIM9UTION ( PRIVATE CAPITAL =MATION 9CREASES 
GOV]NM5T-9DUC$ PRODUCTION2 ?IS1 9 TURN1 DIM9I%ES PRIVATE CAPITAL 
EXPANSION1 & SO ON4 

,H[ TO BREAK \T ( ?IS VICI\S CIRCLE8 0,!ORETICALLY10 !RE 
>E TWO POSSIBILITIES1 BO? EQUALLY IMPOSSIBLE 9 PRACTICE4 ,BO? HAVE TO DO 
) ! 0UNMIX+0 ( ! MIX$ ECONOMY1 EI!R BY A RETURN TO A 
0FREE0 M>KET ECONOMY SU* AS PREVAIL$ 9 ! PA/1 OR BY 5D+ 
! M>KET ECONOMY AS A MIX$ ECONOMY ALTOGE!R4 ,UNABLE TO RETURN TO ! 
CONDITIONS ( ! PA/ & UNABLE TO TRANS=M ITSELF 9TO A /ATE CAPITALI/ 
SY/EM1 ! MIX$ ECONOMY ALT]NATES BETWE5 /AGNATION & DE/RUCTION1 
BETWE5 9SUFFICI5T CAPITAL EXPANSION & 9CREAS$ WA/E PRODUCTION4 ,IT IS1 
!N1 NOT A MANIFE/ATION ( CAPITALISM'S ABILITY TO 0RE=M0 
ITSELF BY REALIZ+ ! GOLD5 MEAN ( JU/ ! RI<T AM\NT ( GOV]NM5T 
CONTROL & JU/ ! RI<T AM\NT ( PRIVATE 9ITIATIVE = ! 
0OPTIMUM0 A*IEVEM5T ( 0ECONOMIC EFFICI5CY10 BUT A 
MANIFE/ATION ( ! RA!R 0P]MAN5T0 CRISIS CONDITION 9 :I* 
CAPITALISM HAS F\ND ITSELF S9CE ! BEG9N+ ( ?IS C5TURY4 

,FROM 3 ,M>XI/S4ORG4 

,*RONOLOGY 3 
,M>* #b1 #bba 3 ,DYNAMICS ( ! ,MIX$ ,ECONOMY -- ,ADD$4 
,JANU>Y #h1 #bbb 3 ,DYNAMICS ( ! ,MIX$ ,ECONOMY -- ,UPDAT$4 

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