,*APT] #d 
,SPL5DOR & ,MIS]Y ( ! ,MIX$ ,ECONOMY 

,PEOPLE 3 

,AU?OR 3 ,PAUL ,MATTICK 

,TEXT 3 

,! SECOND GLOBAL ECONOMIC CRISIS ( ?IS C5TURY WAS TRANS=M$ DUE TO ! 
PROVOCATION ( IMP]IALI/ COMPETITION1 9TO ! ,FIR/ ,WORLD ,W>4 ,TO ! USUAL 
DEVALUATION ( CAPITAL BY CRISIS1 COMB9$ ) ITS CONC5TRATION & 
C5TRALIZATION1 WAS N[ ADD$ ! PHYSICAL DE/RUCTION ( MEANS ( PRODUCTION 
& LABOR P[]4 ,CONNECT$ TO ?IS WAS A %IFT 9 ! BALANCE ( ECONOMIC P[] 
FROM ! ,EUROPEAN NATIONS TO ! ,UNIT$ ,/ATES4 ,AM]ICA BECAME ! GREATE/ 
EXPORT+ & CR$ITOR NATION 9 ! WORLD4 ,! T]RITORIAL *ANGES BR\<T 
AB\T BY ! W>1 ! REMOVAL ( ,RUSSIA FROM ! WORLD ECONOMY1 ! CAPITALI/ 
REP>ATIONS POLICY1 ! BREAKD[N ( CURR5CIES & ! WORLD M>KET-ALL ?IS 
MADE ! RECON/RUCTION MU* MORE DIFFICULT ?AN IT W\LD HAVE BE5 9 ! CASE 
( A 0PURELY ECONOMIC0 CRISIS4 ,! REVIVAL ( ! ,EUROPEAN 
ECONOMIES PROCE$$ SO SL[LY ?AT ) ! EXCEPTION ( ,AM]ICA1 ! ,CRISIS 
?AT HAD TURN$ 9TO ! ,FIR/ ,WORLD ,W> EXT5D$ ?R\< IT 9TO ! ,SECOND 
,WORLD ,W>4 ,AM]ICA'S SPECIAL SITUATION WAS ?US A LIMIT$ PRIVILEGE1 
:I* CAME TO AN 5D 9 #a#i#b#i4 ,! ,AM]ICAN ECONOMIC COLLAPSE DROVE ! WORLD 
ECONOMY 9TO A G5]AL DECL9E4 ,CAPITAL HAD 9DE$ MADE AN EF=T1 9 ! =M 
( ,AM]ICAN LOANS1 L>GE-SCALE C>TELLIZATION1 RATIONALIZATION ( PRODUCTION1 
& 9FLATION1 TO ESCAPE ! CRISIS1 BUT )\T SUCCESS4 ,TO LOOK ONLY AT ! 
POORE/ & ! RI*E/ CAPITALI/ C\NTRIES ( ?AT TIME1 WE NOTE ?AT BETWE5 
#aibi & #aicb 9DU/RIAL PRODUCTION 9 ,G]MANY FELL BY >\ND #e P]C5T1 :ILE 
! UNEMPLOY$ NUMB]$ SEV5 MILLION1 & ! NATIONAL 9COME FELL FROM #g#c4#d 
TO #d#b4#e BILLION M>KS4 ,9 ,AM]ICA >\ND #aicb ! NATIONAL 9COME HAD ALSO 
FALL5 BY AB\T HALF1 FROM @s#h#g4#e TO @s#d#a4#g BILLION1 & ! SIXTE5 MILLION 
UNEMPLOY$ REFLECT$ ! #e P]C5T CONTRACTION ( 9DU/RIAL PRODUCTION4 ,A 
WORLD ECONOMIC CRISIS ( ?IS EXT5T W5T BEYOND ALL PREVI\S EXP]I5CE & 
C\LD NOT1 LIKE ! FIR/ PO/W> CRISIS1 BE ASCRIB$ TO ! CIRCUM/ANCE ( 
! W>4 

,! P>TIZANS ( ,M>X'S CRISIS !ORY1 ( ALL %ADES1 SAW 9 ! 
P]SI/5T CRISIS ! CONFIRMATION ( !IR CRITIQUE ( CAPITAL1 & !Y 
LOOK$ = AN OV]COM+ ( ! CRISIS EI!R 9 RE=M ( ! SY/EM OR 9 ITS 
OV]?R[4 ,! /ATIC !ORY ( G5]AL EQUILIBRIUM WAS UNABLE TO EXPLA9 ! 
CRISIS1 AS ! PO/ULAT$ EQUILIBRAT+ T5D5CIES REFUS$ TO WORK4 ,& BECAUSE 
! V>I\S GOV]NM5TS ( ! CAPITALI/ NATIONS RELI$1 AT FIR/1 ON ! 
DEFLATION>Y CRISIS ME*ANISM TO SOLVE ! PROBLEM & DID NOT 9T]F]E 9 ! 
ECONOMIC PROCESS1 ! DEEP5+ ( ! DEPRESSION C\LD NOT BE BLAM$ ON 
]RONE\S GOV]NM5T POLICIES4 ,!RE WAS NO?+ LEFT TO BLAME = ! CRISIS 
BUT ! WORK]S' UNWILL+NESS TO ACCEPT L[] WAGES4 ,! P]SI/5CE ( 
! CRISIS & ! CON/ANTLY 9CREAS+ UNEMPLOYM5T1 H[EV]1 F9ALLY 
IMPELL$ ! B\RGEOIS ECONOMI/S TO A REVISION ( !IR !ORY1 :I* HAS 
TAK5 ITS PLACE 9 HI/ORY AS ! 0,KEYNESIAN ,REVOLUTION40 

,)\T OPPOS+ NEO-CLASSICAL !ORY 9 G5]AL1 ,KEYNES RECOGNIZ$ ! 
EVID5T FACT ?AT ! TRADITIONAL !ORY WAS NOT 9 ACCORD ) ! ACTUAL 
SITUATION4 ,! FULL EMPLOYM5T ASSUM$ BY ! !ORY APPE>$ TO HIM N[ AS A 
POSSIBLE BUT NOT NECESS>Y ,PRESUPPOSITION ( ECONOMIC EQUILIBRIUM4 ,SAY'S 
!SIS1 ?AT SUPPLY & DEM& MU/ ALWAYS CO9CIDE1 WAS N[1 A HUNDR$ YE>S 
LAT] RECOGNIZ$ AS ]RONE\S1 S9CE 0SAV+S0 DO NOT NECESS>ILY 
LEAD TO NEW 9VE/M5TS4 ,9 ,KEYNES'S VIEW1 :ILE PRODUCTION MU/ S]VE 
CONSUMPTION1 ! LATT] DECREASES ) ! 9CREAS+ SATISFACTION ( NE$S1 SO 
?AT ! EXT5SION ( PRODUCTION MU/ DECREASE & ) IT ! LABOR M>KET4 
,?US 9 MATURE CAPITALI/ SOCIETY NEW 9VE/M5TS W\LD BE ALWAYS LESS & LESS 
PR(ITABLE1 EV5 9 ! CASE ( A RADICAL R$UCTION ( WAGES4 ,& :ILE IT IS 
TRUE ?AT L[ WAGES YIELD HI< PR(ITS1 SO 9DUC+ NEW 9VE/M5TS1 IT IS 
NEV]!LESS NOT ONLY WRONG BUT DANG]\S TO LEAVE ! ECONOMY AT ! M]CY ( 
! ECONOMIC C\RSE ( EV5TS1 9 VIEW ( ! DIFFICULTIES ?AT /& 9 ! 
WAY ( SU* WAGE DECREASES & ( ! 9EVITABLE LONG-RUN DECL9E ( ! RATE 
( ACCUMULATION4 ,! DEPRESSION !RE=E MU/1 ACCORD+ TO ,KEYNES1 BE 
COMBAT$ ) A POLICY ( /ATE /IMULATION ( EXPANSION1 BAS$ AT ONCE OIL AN 
9FLATION>Y MONET>Y POLICY & ON PUBLIC WORKS PAID = BY ! PUBLIC 
DEBT4 

,AL?\< ,KEYNES TRI$ TO EXPLA9 ! CYCLICAL MOVEM5T ( CAPITAL AS DUE TO 
! *ANG+ PR(ITABILITY ( CAPITAL1 HE REALLY DEVELOP$ NO !ORY ( CRISIS4 
,ACCORD+ TO HIM IT WAS ! DECL9+ PROP5SITY TO CONSUME ?AT R$UC$ ! 
RATE ( ACCUMULATION & 9DUC$ ! CAPITALI/S TO /OP TRANS=M+ !IR 
MONEY 9TO CAPITAL4 ,W]E !Y TO CONT9UE TO 9VE/1 IT W\LD BE ONLY TO E>N A 
DECL9+ RATE ( PR(IT1 :I* W\LD F9D ITS L[] LIMIT 9 ! GIV5 RATE ( 
9T]E/4 ,9 ORD] TO ESCAPE ! DEPRESSION1 IT W\LD BE NECESS>Y TO ADD NEW 
ANTI-CRISIS MEASURES TO ! FAMILI> ONES4 ,WAGES W\LD HAVE TO BE CUT BY MEANS 
( 9FLATION1 ! PR(IT RATE SUPPORT$ BY L[]+ ! 9T]E/ RATE1 & ! 
REMA9+ UNEMPLOYM5T ABSORB$ BY PUBLIC WORKS1 UNTIL !SE MEASURES PRODUC$ 
! BEG9N+ ( A NEW PROSP]ITY1 AT :I* PO9T ! ECONOMY C\LD BE LEFT 
ONCE AGA9 TO ! AUTOMATIC ME*ANISM ( ! M>KET4 ,S9CE ,KEYNES WAS 
ESS5TIALLY CONC]N$ ) ! OV]COM+ ( ! CRISIS ( HIS DAY1 ! 
LONG-T]M DEVELOPM5TAL T5D5CY DESCRIB$ BY HIS !ORY REMA9$ ONLY A 
PHILOSOPHICAL ORNAM5T1 :I* DREW NO GREAT 9T]E/ AT ! TIME4 ,?IS !ORY 
REMA9$ ON ! T]RA9 ( /ATIC EQUILIBRIUM & WAS !RE=E UNABLE TO COME 
TO T]MS ) ! DYNAMIC ( ! SY/EM4 

,! ,KEYNESIAN !ORY WAS NECESS>ILY RE/RICT$ TO ! NATIONAL ECONOMY 
RA!R ?AN TO ! CAPITALI/ WORLD ECONOMY1 AS ! /ATE 9T]V5TIONS IT 
CALL$ = C\LD BE APPLI$ ONLY 9 A NATIONAL FRAMEWORK4 ,( C\RSE1 IT 
9CLUD$ ! HOPE ?AT ! 9CREASE 9 PRODUCTION 9 9DIVIDUAL C\NTRIES W\LD 
FAVORABLY 9FLU5CE WORLD TRADE1 SO ?AT 9T]NATIONAL COMPETITION W\LD BECOME 
LESS FI]CE4 ,! MEASURES REQUIR$ TO C\NT] UNEMPLOYM5T COMPELL$ A RETURN 
TO CLASSICAL MACROECONOMICS1 :I* 9VE/IGAT$ SOCIETY AS A :OLE 9 ITS 
ECONOMIC AGGREGATES1 9 CONTRA/ TO MICRO-ECONOMICS- !N ALMO/ ! ONLY K9D 
( ECONOMICS CULTIVAT$ :I* CONC]N$ ITSELF ONLY ) ! FRAGM5T>Y 
ANALYSIS ( ISOLAT$ ECONOMIC PROCESSES4 ,:ATEV] PRACTICAL PROPOSALS W]E 
MADE1 ( C\RSE1 H>DLY REPRES5T$ NEW DISCOV]IES BUT RA!R ! 
REEMPLOYM5T ( EXP$I5TS ?AT HAD BE5 RELEGAT$ TO ! BACKGR\ND DUR+ 
! FL[]+ ( LAISSEZ FAIRE4 ,DESPITE AN 5ORM\S FL[ ( TE*NICAL ECONOMIC 
NEOLOGISMS1 ! PRET5SIONS ( ! 0NEW ECONOMICS0 CLO!D ONLY ! 
ORD9>Y CAPITALI/IC PR9CIPLE ( 9CREAS+ PR(ITS BY MEANS ( GOV]NM5TAL 
9T]V5TIONS 9 M>KET RELATIONS4 

,! NE$ = /ATE 9T]V5TION DICTAT$ BY ! CRISIS SOON BECAME1 9 ! 
H&S ( ! ECONOMIC !ORI/S1 A VIRTUAL PR9CIPLE ( ECONOMIC MANAGEM5T4 
,! TRADITIONALLY DOM9ANT VIEW ?AT ALL PUBLIC EXP5DITURES HAVE AN 
UNPRODUCTIVE *>ACT] WAS N[ SE5 AS AN ]ROR1 & IT WAS ASS]T$ ?AT 
PUBLIC SP5D+ HAS ! SAME B5EFICIAL EFFECT ON PRODUCTION & 9COME AS 
PRIVATE 9VE/M5TS4 ,ACCORD+ TO ,ALV9 ,HANS51 

,! DEVELOPM5T ( A PUBLIC P>K1 SWIMM+ POOL1 PLAYGR\ND1 
OR CONC]T HALL MAKES POSSIBLE A FL[ ( REAL 9COME NO LESS ?AN ! ]ECTION 
( A RADIO FACTORY444 4 .<,P.>UBLIC EXP5DITURES MAY ALSO BE444 9COME-CREAT+ 9 
! S5SE ?AT !Y T5D CURR5TLY TO EXP& 9COME & EMPLOYM5T4444 .<,W.>>S 
NOT ONLY PROMOTE EMPLOYM5T DUR+ ! EM]G5CY1 BUT MAY /IMULATE PO/W> 
PRIVATE 9VE/M5T BY CREAT+ ACCUMULAT$ %ORTAGES 9 H\S+ & O!R 
9VE/M5T >EAS444 4 ,9DE$1 :5 PRIVATE BUS9ESS \TLAYS DECL9E1 ! 
GOV]NM5T ALONE IS 9 A POSITION TO GO =W>D & SU/A9 ! 9COME ?R\< 
9CREAS$ EXP5DITURES4 

,S9CE ! ECONOMI/S DO NOT DI/+UI% BETWE5 ECONOMY 9 G5]AL & ! 
CAPITALI/ ECONOMY1 IT IS IMPOSSIBLE = !M TO SEE ?AT 
0PRODUCTIVE0 & 0CAPITALI/ICALLY PRODUCTIVE0 MEANS 
TWO DIFF]5T ?+S & ?AT PUBLIC1 LIKE PRIVATE 9VE/M5TS >E 
CAPITALI/ICALLY PRODUCTIVE ONLY IF !Y CREATE SURPLUS VALUE NOT BECAUSE !Y 
SUPPLY MAT]IAL GOODS OR AM5ITIES4 

,CONTEMPOR>Y ECONOMI/S IMAG9E ?AT BO? PRIVATE CAPITAL & ! GOV]NM5T 
CONTRIBUTE TO ! NATIONAL 9COME1 AS BO? DRAW FROM ! GREAT 
0/REAM0 ( 9COME4 ,AL?\< ! GOV]NM5T'S CONTRIBUTION 
DEP5DS ON TAXES & BORR[+1 ! DEBT S]VICE ?AT GOES ) ?IS IS 
SUPPOS$ TO BE PAID \T ( ! 9CREAS$ NATIONAL 9COME A*IEV$ ?R\< 
PUBLIC WORKS4 ,9FLATION>Y CONSEQU5CES W]E HELD TO POSE NO DANG] SO LONG AS 
! 9CREAS+ MONEY SUPPLY C\LD BE BALANC$ BY AN EQUAL 9CREASE ( 
PRODUCTION & REAL 9COME4 ,9 ORD] TO DEMON/RATE ?IS1 ECONOMI/S APPEAL$ 
TO A SO-CALL$ 0ACCEL]ATION PR9CIPLE0 & TO A 0MULTIPLI] 
EFFECT10 OR TO A COMB9ATION ( ! TWO1 :OSE OP]ATION C\LD BE 
E/ABLI%$ MA!MATICALLY ON ! BASIS ( C]TA9 IMAG9$ ASSUMPTIONS4 
,:E!R !SE 0PR9CIPLES0 YIELD ! SAME OR SIMIL> RESULTS 9 
REALITY CAN ( C\RSE NOT BE PROV5 DUE TO ! EMPIRICAL COMPLEXITY ( ECONOMIC 
PROCESSES4 ,BUT EV5 !ORETICALLY NO?+ FOLL[S FROM !M BUT ! OBVI\S 
9SI<T ?AT LIKE ALL O!R SP5D+1 /ATE EXP5DITURE ALSO CAN LEAD TO 
FUR!R PRIVATE EXP5DITURE1 SO ?AT ! TOTAL NEW PUR*AS+ P[] IS HI<] 
?AN ?AT CONTRIBUT$ BY ! ORIG9AL /ATE EXP5DITURE4 

,ALV9 ,HANS5 D5I$ ?AT HIS !ORY C\LD BE 9CLUD$ UND] ! ORD9>Y 
RUBRIC ( UND]CONSUMPTION !ORIES4 ,9 HIS VIEW CRISIS RESULT$ NOT FROM 
9SUFFICI5T DEM& = CONSUM] GOODS BUT FROM SPONTANE\SLY ORIG9AT+ 
OV]-9VE/M5T4 ,AS ! DYNAMIC ( ! SY/EM DRIVES ! PRODUCTION ( MEANS ( 
PRODUCTION =W>D FA/] ?AN SOCIAL CONSUMPTION1 ! RISE 9 CONSUMPTION MU/ 
BE RAIS$ TO A DOM9ANT PR9CIPLE ( ! SY/EM IF OV]PRODUCTION IS TO BE 
AVOID$4 ,9 MOD]N CAPITALI/ SOCIETY 9VE/M5TS >E NO LONG] DET]M9$ BY 
CONSUMPTION1 ACCORD+ TO ,HANS51 SO ?AT ! CYCLE !ORIES ( ! CLASSICAL 
& NEO-CLASSICAL ECONOMI/S1 ) !IR SUPPLY-DEM& EQUILIBRIUM1 >E 9 
CONFLICT ) ! ACTUAL FACTS4 ,CONSUMPTION IS N[ A FUNCTION ( ACCUMULATION1 
AS A RESULT ( :I* ! CRISIS CYCLE IS AN 9EVITABLE RESULT ( CAPITALI/ 
EXPANSION4 ,9 ORD] TO ELIM9ATE UNEMPLOYM5T & OV]PRODUCTION1 PUBLIC 
CONSUMPTION MU/ BE 9CREAS$ BY MEANS ( PUBLIC SP5D+ TO PRODUCE A K9D 
( MIX$ ECONOMY 9 :I* ! PRICE RELATIONS >E SO 9TEGRAT$ ) MONET>Y 
& FISCAL MEASURES ?AT ! ECONOMY CAN CONT9UE TO DEVELOP4 

,?IS 0REVOLUTION0 9 !ORETICAL ECONOMICS HAD ALREADY BE5 
PREC$$ BY A MAT*+ PRACTICE BORN ( NECESSITY4 ,IT TOOK DIFF]5T =MS 9 
DIFF]5T C\NTRIES4 ,:ILE1 = EXAMPLE1 9 ! ,UNIT$ ,/ATES UNEMPLOYM5T 
RELIEF PAID \T ( PUBLIC FUNDS1 C\NT]-ACT$ A NOTICEABLE RADICALIZATION ( 
! WORK+ POPULATION1 ! MAKE-WORK PROGRAM 9 ,G]MANY HAD ! =M ( 
RE>MAM5T 9 ORD] TO UNDO ! RESULTS ( ! ,FIR/ ,WORLD ,W> & OV]COME ! 
CRISIS IMP]IALI/ICALLY AT ! EXP5SE ( O!R NATIONS4 ,?US ! 9TEGRATION 
( ! M>KET ECONOMY ) /ATE ECONOMIC MANAGEM5T S]V$1 ON ! ONE H&1 
! DEF5SE ( ! POLITICAL /ATUS QUO &1 ON ! O!R1 ! ATTEMPT TO 
DISRUPT IT4 ,! G5]AL CRISIS SITUATION & ! CONFLICT+ CAPITALI/ 
9T]E/S MIX$ ! FI<T AGA9/ ! CRISIS ) A S]IES ( IMP]IALI/ 
ADV5TURES & SOCIAL CONFLICTS1 :I* MORE OR LESS AFFECT$ ALL C\NTRIES & 
F9ALLY RESULT$ 9 ! ,SECOND ,WORLD ,W>1 :I* P[]FULLY ADVANC$ ! 
9TEGRATION ( /ATE & ECONOMY4 ,! FULLY DEVELOP$ MIX$ ECONOMY BEGAN 9 
! =M ( A W> ECONOMY ?AT PUT AN 5D TO ! APP>5TLY P]MAN5T /ATE ( 
CRISIS ?R\< ! DE/RUCTION ( UNBELIEVABLE QUANTITIES ( CAPITAL VALUE & 
! MUTUAL EXT]M9ATION ( ! PRODUC]S4 

,ONLY AFT] ! W> DID ! 0NEW ECONOMICS0 BECOME ! IDEOLOGY 
( ! RUL+ CLASSES1 :5 /ATE 9VOLVEM5T 9 ! ECONOMY C\LD NOT BE 
ELIM9AT$ 9 ! *AOS ( ! PO/W> P]IOD4 ,) ! EXCEPTION ( ,AM]ICA1 
! WORLD1 9 ! EYES ( ! B\RGEOISIE1 HAD BE5 UTT]LY %ATT]$ & 
REQUIR$ POLITICAL & MILIT>Y 9T]V5TION IF TOTAL AN>*Y WAS TO BE 
AVOID$4 ,! ECONOMIC FUNCTIONS ( ! /ATE1 EVOLV$ 9 ! C\RSE ( W> & 
CRISIS1 C\LD BE ALT]$ BUT NOT ELIM9AT$4 ,! CONFRONTATION ?AT IMM$IATELY 
BROKE \T BETWE5 ! VICTORI\S P[]S OV] ! DIVISION ( ! SPOILS ( W> 
& ! CREATION ( NEW SPH]ES ( 9FLU5CE GAVE ! GOV]NM5TAL 9/ITUTIONS 
YET GREAT] 9FLU5CE ON ECONOMIC AFFAIRS4 ,! NEWLY E/ABLI%$ BORD]S HAD TO 
BE SECUR$ & ! CAPITALI/ WORLD ECONOMY PUT ON ! ROAD TO RECON/RUCTION 
) ! HELP ( ! /ATE4 ,AN 9CREAS+ P>T ( SOCIAL PRODUCTION WAS DEVOT$ 
TO !SE 5DS1 & ! /ATE BUDGETS CONT9U$ TO SWELL ?ANKS TO TAXATION & 
BORR[+4 

,! IDEA ?AT 0MATURE0 CAPITALISM IS 9EVITABLY DOOM$ TO 
/AGNATION & 9CREAS+ UNEMPLOYM5T1 :I* CAN BE OV]COME ONLY BY PUBLIC 
EXP5DITURE1 REMA9$ A LEITMOTIF ( ! 0NEW ECONOMICS40 ,! FACT 
( FULL EMPLOYM5T DUR+ ! W> WAS HELD TO BE SUFFICI5T PRO( ?AT /ATE 
9T]V5TIONS C\LD HAVE ! SAME RESULTS UND] ALL CONDITIONS & ?AT ! 
/ATE-9TEGRAT$ ECONOMY C\LD 5D ! CRISIS CYCLE & MAKE POSSIBLE AN 
UNBROK5 EXPANSION ( ! ECONOMY4 ,! 9CORPORATION ( ECONOMIC GR[? 9TO 
ECONOMIC ANALYSIS NECESSITAT$ ! CON/RUCTION ( A DYNAMIC !-,TORY ?AT 
C\LD BE ADJO9$ TO ! /ATIC EQUILIBRIUM !ORY4 ,AMONG O!RS1 ,R4 ,F4 ,H>ROD 
& ,E4 ,D4 ,DOM> ATTEMPT$ TO PROVIDE !ORETICAL PRO( ( ! POSSIBILITY ( AN 
EQUILIBRIUM ECONOMIC GR[? RATE BY A DYNAMIZATION ( ! ,KEYNESIAN MODEL ( 
9COME DET]M9ATION1 TOGE!R ) ! ACCEL]ATOR & MULTIPLI] 
PR9CIPLES4 

,?IS EQUILIBRIUM GR[? RATE WAS SUPPOS$ TO BE DET]M9$1 ON ! ONE H&1 
BY ! PROP5SITY TO SAVE &1 ON ! O!R1 BY ! CAPITAL REQUIR$ & ! 
RETURNS FROM IT4 ,GR[?1 H[EV]1 W\LD MEAN ! DEP>TURE FROM AN EQUILIBRIUM 
/ATE2 ONCE EMB>K$ UPON1 GR[? W\LD T5D TO CONT9UE AUTONOM\SLY 9 ! 
SAME DIRECTION & ?US TO BECOME ALWAYS MORE UN/ABLE4 ,S9CE NEW 9VE/M5TS 
HAVE TWO SIDES1 9CREAS+ 9COMES & PRODUCTIVE CAPACITY - ! FIR/ 
REPRES5T+ DEM& & ! SECOND SUPPLY - A GR[? RATE GU>ANTEE+ 
ECONOMIC /ABILITY MU/ H>MONIZE ! 9CREAS+ PRODUCTIVE CAPACITY ) ! 
9CREAS+ DEM&4 ,= ?IS TO BE POSSIBLE1 IT IS NOT SUFFICI5T TO A*IEVE AN 
EQUILIBRIUM ( SAV+S & 9VE/M5T1 BUT 9VE/M5TS MU/ EXCE$ SAV+S IF 
UNEMPLOYM5T IS TO BE AVOID$4 ,AS A RESULT1 ECONOMIC GR[?1 :ILE A MEANS ( 
FI<T+ UNEMPLOYM5T1 BECOMES A S\RCE ( NEW UNEMPLOYM5T AS SOON AS GR[? 
LEAVES ! PA? ( EQUILIBRAT$ DEVELOPM5T4 

,IF ! /ATIC EQUILIBRIUM IS ALREADY RECOGNIZ$ TO BE AN ILLUSION1 A 
BALANC$ RATE ( DEVELOPM5T IS EV5 LESS CR$IBLE4 ,BUT :AT AN AUTONOM\S 
PROCESS ( GR[? CANNOT A*IEVE MAY BE ACCOMPLI%$ BY ITS CONSCI\S 
DIRECTION6 ,! ECONOMY & ITS DEVELOPM5T CAN1 ACCORD+ TO ,PAUL ,SAMUELSON1 BE 
COMP>$ TO 0AN UNMANN$ BICYCLE1 :I* IS UN/ABLE IF DI/URB$ FROM ! 
V]TICAL0 BUT 0CAN BE CONV]T$ 9TO A /ABLE SY/EM BY A /EADY+ 
& COMP5SAT+ HUMAN H&40 ,9 ! SAME WAY 0A ,H>ROD-,DOM> 
GR[? PA? ?AT W\LD BE UN/ABLE UND] LAISSEZ-FAIRE .<CAN.> BE MADE /ABLE BY 
COMP5SAT+ MONET>Y & FISCAL POLICIES 9 A MIX$ ECONOMY4 ,& 
0AL?\< NO?+ IS IMPOSSIBLE 9 AN 9EXACT SCI5CE LIKE 
ECONOMICS10 AT ! PRES5T DAY 0! PROBABILITY ( A GREAT 
DEPRESSION - A PROLONG$1 CUMULATIVE1 & *RONIC SLUMP LIKE ?AT ( ! 
#a#i#cS1 ! #a#h#iS1 OR ! #a#h#gS - HAS BE5 R$UC$ TO A NEGLIGIBLE 
FIGURE40 

,?IS CONFID5CE APPE>$ TO BE JU/IFI$ BY ! FACTS ( ECONOMIC 
DEVELOPM5T & HAD 9 ADDITION ! 0M]IT ( HAV+ PROV$ ?AT AMONG 
O!R POSSIBILITIES ( DEVELOPM5T1 ?AT ( GR[? )\T DI/URBANCES ( 
EQUILIBRIUM ALSO EXI/S1 SOME?+ :I* WAS E>LI] CONTE/$ BY V>I\S 
9VE/IGATORS 79CLUD+ ,M>X1 ) HIS BREAKD[N !ORY740,9 ?IS WAY ! 
QUE/ION ( ! DYNAMIC ( CAPITALISM WAS EXP\ND$ 9 A MANN] SATISFACTORY TO 
B\RGEOIS ECONOMICS1 )\T AB&ON+ ! EQUILIBRIUM APPROA*1 & WAS 
DEVELOP$ 9 ! NEO-NEOCLASSICAL !ORY1 9 :I* /ATIC & DYNAMIC ANALYSIS 
W]E UNIT$4 

,! V>I\S GR[? !ORIES1 H[EV]1 W]E LESS CONC]N$ ) ! ECONOMIC 
PROCESSES ( ! DEVELOP$ C\NTRIES ?AN ) ! QUE/ION1 RAIS$ BY ! 
\TCOME ( ! ,SECOND ,WORLD ,W>1 ( ! CAPITALI/ DEVELOPM5T ( ! 
UND]DEVELOP$ NATIONS4 ,( C\RSE1 ?IS QUE/ION C\LD BE ANSW]$ QUICKLY & 
EASILY1 ?\< ! REALIZATION ( ! PROPOSAL CONTA9$ 9 !SE ANSW]S 
NAMELY1 TO REPEAT ! PROCESS ALREADY COMPLET$ 9 ! DEVELOP$ C\NTRIES1 RAN 
9TO 9SURM\NTABLE DIFFICULTIES4 ,NEV]!LESS1 CONC]N ) UND]DEVELOPM5T 
OP5$ UP A NEW BRAN* ( !ORETICAL ECONOMICS ?AT S\<T TO EXPLA9 ! 
SUCCESS ( ! MIX$ ECONOMY TO ! :OLE WORLD & RECOMM5D IT = IMITATION4 
,AS ?IS EVOLUTION>Y !ORY ( DEVELOPM5T1 H[EV]1 HAS NO?+ TO DO ) ! 
PROBLEM ( CRISIS1 WE CAN NEGLECT IT H]E4 

,FROM ! /&PO9T ( ,M>X'S CRISIS !ORY1 ! PROSP]ITY :I* 
BEGAN1 ) SOME DELAY1 AFT] ! W> IS NOT SURPRIS+1 S9CE IT IS ! 
FUNCTION ( CRISIS TO LAY ! GR\NDWORK = A NEW UPSW+4 ,?IS IS NOT TO SAY 
?AT EV]Y CRISIS CAN 9TRODUCE A NEW P]IOD ( ACCUMULATION2 IT MAY LEAD ALSO 
ONLY TO A SITUATION ( RELATIVE /AGNATION1 AS WAS ! CASE 9 MANY C\NTRIES 
AFT] ! ,FIR/ ,WORLD ,W>1 & !NCE TO A NEW CRISIS4 ,) ! GR[+ 
DE/RUCTIVE P[]S ( CAPITAL1 W> AS CRISIS BECOMES AN OB/ACLE TO RAPID 
RECOV]Y & CAN ONLY SL[LY GIVE WAY TO A NEW EXPANSION4 ,UND] !SE 
CIRCUM/ANCES IT IS NECESS>Y TO CONT9UE /ATE 9T]V5TION 9 ! ECONOMY1 
& ?IS 9 FACT APPE>S TO BE AN ESS5TIAL 9/RUM5T ( ! NEW UPSW+4 

,IF ! /AGNATION ( ! CAPITALI/ ECONOMY LEADS TO /ATE 9T]V5TION 9 
ORD] TO RE/>T ! ECONOMY & CONQU] UNEMPLOYM5T1 IT DOES NOT FOLL[ ?AT 
!SE 9T]V5TIONS >E TO BE ?ANK$ = ! NEW PROSP]ITY ?AT F9ALLY 
>ISES4 ,IT MAY BE DUE 9/EAD TO ! RE/ORATION ( ! PR(ITABILITY ( 
CAPITAL1 A*IEV$ AT ! SAME TIME AS1 BUT RELATIVELY 9DEP5D5TLY ( !SE 
9T]V5TIONS1 AS 9 E>LI] CRISES1 9 :I* ! /ATE'S DEFLATION>Y 
POLICY AGGRAVAT$ RA!R ?AN ATT5UAT$ ! CRISIS4 ,! R$UCTION ( ! /ATE 
BUDGET FAIL$ AS A MEANS TO IMPROVE ! PR(ITABILITY ( CAPITAL1 & LIKEWISE 
AN 9CREASE 9 PUBLIC WORKS DOES NOT GU>ANTEE A SOLUTION TO ! CRISIS4 ,9 
BO? CASES ! CONT9UATION ( ACCUMULATION DEP5DS 9 ! F9AL ANALYSIS ON 
TRANS=MATION ( ! CAPITAL /RUCTURE & A RATE ( SURPLUS VALUE ?AT CAN 
VALORIZE ! EXP&+ CAPITAL4 ,)\T A D\BT ! EXPANSION ( CAPITALI/ 
PRODUCTION AFT] ! ,SECOND ,WORLD ,W> CAN BE EXPLA9$ ONLY BY ! /ILL 
UNBROK51 OR RE/OR$1 EXPANSIVE P[] ( CAPITAL1 & NOT BY ! EFFECT ( 
/ATE-9DUC$ PRODUCTION4 ,BUT IF ?IS IS TRUE1 A NEW OV]-ACCUMULATION CRISIS 
IS C]TA91 & ) IT ! NECESSITY ( FUR!R /ATE 9T]V5TION4 

,FROM ! /&PO9T ( ! 0NEW ECONOMICS10 H[EV]1 A 
SUFFICI5T AUTONOM\S EXPANSION ( CAPITAL C\LD NO LONG] BE C\NT$ ON1 SO 
?AT CONT9U+ CAPITALI/ DEVELOPM5T WAS ?9KABLE ONLY 9 ! =M ( ! 
MIX$ ECONOMY4 ,A SKEPTICAL M9ORITY ( ECONOMI/S REMA9$ TRUE TO ! 
PR9CIPLE ( LAISSEZ FAIRE & SAW ! MIX$ ECONOMY AS ! PURE & SIMPLE 
DE/RUCTION ( ! M>KET ECONOMY1 :I* MU/ LEAD 9 ! 5D TO ! COLLAPSE 
( PRIVATE CAPITALISM4 ,! SU/A9$ PROSP]ITY 9 ! ,WE/]N C\NTRIES1 :I* 
C\LD NOT BE SIMPLY EXPLA9$ AS ! RESULT ( /ATE 9T]V5TIONS1 PU%$ ! 
,KEYNESIAN CONCEPTIONS 9TO ! BACKGR\ND1 & 9 ! ACADEMIC WORLD 
MICROECONOMICS AGA9 TOOK ! DOM9ANT PLACE4 ,GOV]NM5TAL 9VOLVEM5T 9 ! 
ECONOMY WAS CONSID]$ NOT ONLY SUP]FLU\S BUT AS OB/RUCT+ ! FREE 
MOVEM5T ( CAPITAL1 & IT WAS ?US SE5 AS A H9DRANCE TO DEVELOPM5T4 ,( 
C\RSE1 ?IS NEW CAPITALI/ SELF-CONFID5CE WAS ROOT$ 9 ! PREVAIL+ 
PROSP]ITY2 & JU/ AS ! 0NEW ECONOMICS0 C\LD NOT COMPLETELY 
VANQUI% ! LAISSEZ-FAIRE DOCTR9E1 ! LATT] WAS NOT ABLE TO COMPEL ! 
0NEW ECONOMICS0 TO RETREAT PURELY BECAUSE ( ! FACT ( 
PROSP]ITY4 ,! MIX$ ECONOMY HAD ALREADY BECOME ! UNALT]ABLE =M ( MOD]N 
CAPITALISM1 AL?\< ! MIX ITSELF C\LD BE ALT]$4 ,/ATE 9T]V5TIONS C\LD 
BE 9CREAS$ OR DECREAS$ TO MEET ! *ANG+ NE$S ( ! YET UNCONTROLL$ 
DEVELOPM5T ( ! ECONOMY4 

,! EXPANSION ( ,WE/]N CAPITAL WAS UNEXPECT$LY RAPID & DURABLE4 
,ECONOMIC D[NTURNS W]E ( SU* BRIEF DURATION AS TO 9SPIRE ! REPLACEM5T ( 
! CONCEPT ( 0DEPRESSION0 BY ?AT ( 0RECESSION10 & 
! %>E ( /ATE-9DUC$ PRODUCTION 9CREAS$ MORE SL[LY ?AN PRODUCTION AS 
A :OLE4 ,?IS AFFECT$ NOT ONLY ! T5OR ( ,KEYNESIAN !ORY BUT ALSO ,M>XI/ 
VIEWS1 LEAD+ 9 ! 5D TO V>I\S NEW REVISIONS ( ,M>X'S !ORY ( 
CAPITAL A CRISIS4 ,DRAW+ NE>LY UNIV]SALLY ON ! ,KEYNESIAN !ORY ( 
SUFFICI5T DEM& AS ! CAUSE ( /AGNATION1 A S]IES ( AU?OR REPRES5T$ 
! POSITION ?AT CAPITALISM'S DIFFICULTIES >ISE NO FROM A %ORTAGE ( 
SURPLUS VALUE BUT FROM AN EXCESS ( IT4 ,/RUCTURAL TRANS=MATIONS FAVORABLE TO 
CAPITAL PRODUCTION SU* AS ! *EAP5+ ( CON/ANT CAPITAL DUE TO MOD]N 
TE*NOLOGY & ! >BITR>Y MANIPULATION ( PRICES ?AT ACCOMPANIES 
MONOPOLIZATION W]E HELD TO RESULT 9 ! PRODUCTION ( MORE SURPLUS VALUE ?AN 
C\LD POSSIBLY BE ACCUMULAT$1 & :I* C\LD BE SP5T ONLY BY WAY ( PUBLIC 
EXP5DITURES4 ,AS ! CAPITALI/ MODE ( PRODUCTION RULES \T AN IMPROVEM5T 9 
! WORK+ POPULATION'S /&>D ( LIV+ PROPORTIONAL TO ! RIS+ 
CAPACITY TO PRODUCE1 ! ECONOMY FLUCTUATES BETWE5 /AGNATION & OV]COM+ 
IT ?R\< A POLICY ( WA/E 9 ! =M ( SPACE EXPLORATION1 >MAM5TS1 & 
IMP]IALI/IC ADV5TURES4 ,?US CRISES W]E NOT ELIM9AT$ BY ! EXCESS ( 
PR(IT :ILE !Y DID NOT >ISE FROM ! T5D5CY ( ! RATE ( PR(IT TO 
FALL4 ,9 O!R WORDS1 !SE AU?ORS1 TAK+ !IR [N R\TES1 HAD RETURN$ TO 
! CONVICTION ( ,TUGAN-,B>ANOVSKY & ,HILF]D+ ?AT CAPITAL HAS NO OBJECTIVE 
LIMIT S9CE IT CAN 9CREASE PRODUCTION 9DEF9ITELY DESPITE ITS ANTAGONI/IC 
CONDITIONS ( DI/RIBUTION1 EV5 IF A PORTION ( IT MU/ BE 0IRRATIONALLY 
WA/$4 

,)\T GO+ 9TO ! 9T]NAL CONTRADICTIONS 9TR9SIC TO !SE !ORIES 
H]E1 IT %\LD BE NOT$ ?AT !Y REFLECT ! VISIBLE UPSW+ ( CAPITALISM 9 
! ,WE/1 :I* NOT ONLY MADE POSSIBLE FUR!R ACCUMULATION ) A SIMULTANE\S 
IMPROVEM5T 9 ! WORK]S' /&>D ( LIV+ BUT ALSO REMA9$ 
UNDAMAG$ BY ! GR[? ( PUBLIC SP5D+4 ,CONTR>Y TO :AT HAD BE5 ASSUM$ 
DUR+ ! DEPRESSION1 IT WAS NOT ! ADDITIONAL PUBLIC SP5D+ ?AT KEPT ! 
ECONOMY GO+ BUT ! HI< PR(ITS ?AT P]MITT$ ! LUXURY ( WA/E 
PRODUCTION &1 BEYOND ?AT1 ! ALLEG$ TRANS=MATION ( CAPITALISM 9TO AN 
0AFFLU5T0 OR 0CONSUM] SOCIETY40 ,( C\RSE1 ?IS 
P]IOD ( PROSP]ITY DOES CALL = AN EXPLANATION1 :I* CAN ONLY BE F\ND 9 
! ACTUAL C\RSE ( ECONOMIC EV5TS4 ,= ,M>XISM ! G5]AL EXPLANATION ( 
PROSP]ITY IS SIMPLY ! EXI/5CE ( PR(ITS SUFFICI5T TO CONT9UE 
ACCUMULATION1 JU/ AS CRISIS & DEPRESSION >ISE 9 ! ABS5CE ( ?IS /ATE 
( AFFAIRS4 ,EV]Y CYCLICAL WAVE CAN BE EXPLA9$ MORE SPECIFICALLY1 IF ONLY 9 
RETROSPECT1 9 T]MS ( ! PH5OM5A IT DISPLAYS4 

,IF ! LONG DEPRESSION ( ! PRE-W> YE>S WAS *>ACT]IZ$ BY A G5]AL 
LACK ( PR(IT1 DIS9VE/M5T'S1 & AN EXTREMELY L[ RATE ( ACCUMULATION1 
?IS WAS NOT BECAUSE ! PRODUCTIVITY ( LABOR HAD SUDD5LY DECISIVELY 
DECREAS$ BUT BECAUSE ! EXI/+ PRODUCTIVITY WAS NOT GREAT 5\< TO ASSURE 
! EXI/+ CAPITAL A FUR!R PR(ITABLE EXPANSION4 ,! AV]AGE RATE ( PR(IT 
DET]M9$ BY ! EXI/+ CAPITAL /RUCTURE WAS TOO L[ TO 9SPIRE ! 
9DIVIDUAL CAPITALS TO 9CREASE !IR PRODUCTION BY 5L>G+ ! PRODUCTIVE 
APP>ATUS1 AL?\< !Y EXP]I5C$ ! FALL 9 ! AV]AGE RATE ( PR(IT NOT 
DIRECTLY BUT AS ! GR[+ DIFFICULTY ( SELL+ !IR COMMODITIES4 ,! NE$ 
= PR(IT ON ! P>T ( CAPITAL - SWELL$ BY FICTITI\S & SPECULATIVE 
CAPITAL VALUES - CANNOT BE SATISFI$ BY ! MASS ( PR(IT AT H&1 & 
! RESULT+ DECL9E ( PR(IT = EA* 9DIVIDUAL CAPITAL LEADS ?R\< ! 
9T]RUPTION ( FUR!R EXPANSION TO A G5]AL SITUATION ( CRISIS4 

,! WAY \T ( ?IS SITUATION LIES 9 ITS REV]SAL1 9 ! CREATION ( A 
CAPITAL /RUCTURE & A MASS ( SURPLUS VALUE ?AT MAKE FUR!R ACCUMULATION 
POSSIBLE4 ,! COMB9ATION ( ! DE/RUCTION ( CAPITAL ?R\<\T ! LONG 
P]IOD ( DEPRESSION ) ! 5ORM\S ACCEL]ATION ( ?IS PROCESS BY ! 
DE/RUCTION ( CAPITAL VALUES DUR+ ! W> CREAT$ A NEW WORLD = ! 
SURVIV+ CAPITAL 9 :I* ! GIV5 MASS ( PR(IT WAS AT ! DISPOSAL ( A 
MU* DIM9I%$ CAPITAL1 :I* ACCORD+LY 9CREAS$ ITS PR(ITABILITY4 ,AT ! 
SAME TIME1 ! TE*NOLOGICAL DEVELOPM5T =C$ BY ! W> L$ TO A SIGNIFICANT 
RISE 9 LABOR PRODUCTIVITY1 :I*1 9 CONNECTION ) ! ALT]$ CAPITAL 
/RUCTURE1 RAIS$ ! PRODUCTIVITY ( CAPITAL SUFFICI5TLY TO 9CREASE 
PRODUCTION & 5L>GE ! PRODUCTIVE APP>ATUS4 

,AM]ICAN CAPITAL WAS UNABLE TO ACCUMULATE DUR+ ! W>1 S9CE AB\T HALF 
! NATIONAL PRODUCT WAS US$ = MILIT>Y 5DS4 ,! PO/W> P]IOD WAS A 
P]IOD ( MAK+ UP = LO/ ACCUMULATION & ! REPLACEM5T ( ! MEANS ( 
PRODUCTION ?AT ACCOMPANIES ?IS4 ,! RESULT WAS PROSP]ITY 9 :I* 
UNEMPLOYM5T WAS = A TIME R$UC$ TO ITS 9DISP5SABLE M9IMUM4 ,! YE>S 
BETWE5 #aidi & #aifh SAW 0A #e.0 9CREASE 9 ! AM\NT ( CAPITAL = 
EA* UNIT ( LABOR EMPLOY$40 ,?IS WAS L>GELY RESPONSIBLE = 0! 
M>K$ ACCEL]ATION 9 \TPUT P] MAN-H\R FROM #b4#c.0 TO #c4#e.040 ,AS ?IS 
9CREASE 9 ! PRODUCTIVITY ( LABOR WAS 09 EXCESS ( ! 9CREASE 9 
REAL WAGES10 ! RATE ( PR(IT ON CAPITAL1 :ILE RELATIVELY L[1 WAS 
NEV]!LESS /ABLE40 ,! RECON/RUCTION ( ! ,EUROPEAN & ,JAPANESE 
ECONOMY WAS 9 P>T 9ITIAT$ & F9ANC$ BY ,AM]ICAN GRANTS & LOANS1 :I* 
/IMULAT$ ,AM]ICAN EXPORTS & SECUR$ M>KETS = ! GR[+ \TPUT F> 
GREAT] ?AN ?OSE DUE TO DOME/IC ACCUMULATION ALONE4 ,! PRIVATE EXPORT ( 
CAPITAL FOLL[$ ! LEAD ( ! GOV]NM5T AT ! FIR/ SIGNS ( 
PR(ITABILITY1 ABOVE ALL 9 ! =M ( DIRECT 9VE/M5TS1 :I* 
9T]NATIONALIZ$ ! ACCUMULATION ( ,AM]ICAN CAPITAL & FACILITAT$ ITS 
VALORIZATION4 ,ACCESS TO ADVANC$ TE*NOLOGY1 TOGE!R ) RE/RICTION ( 
WAGES1 GAVE ! CAPITAL NEWLY =M+ 9 ! RECON/RUCT+ C\NTRIES A 
COMPETITIVE POSITION 9 ! WORLD M>KET 9 A NUMB] ( >EAS ( 
PRODUCTION4 

,! PRODUCTIVITY ( LABOR ROSE 9 ,G]MANY1 = EXAMPLE1 BY >\ND #f P]C5T 
YE>LY1 & A QU>T] ( TOTAL PRODUCTION WAS 9VE/$ AS ADDITIONAL CAPITAL4 
,) ! EXCEPTION ( ,5GL&1 ?+S W]E NOT MU* DIFF]5T 9 ! O!R 
,EUROPEAN C\NTRIES1 :ILE 9 ,AM]ICA ! RATE ( ACCUMULATION REMA9$ BEL[ 
ITS HI/ORIC AV]AGE4 ,! HI<] PR(IT RATES 9 ! MORE RAPIDLY ACCUMULAT+ 
,EUROPEAN C\NTRIES CAUS$ AN ACCEL]AT$ EXPORT ( ,AM]ICAN CAPITAL1 & ?IS 
9 TURN HA/5$ ! G5]AL ECONOMIC DEVELOPM5T ( ! CAPITAL-IMPORT+ 
C\NTRIES4 ,CONDITIONS DUE TO ! \TCOME ( ! W> L$ TO AN EXTRAORD9>Y 
9CREASE 9 MULT9ATIONAL CORPORATIONS1 L>GELY ,AM]ICAN 9 ORIG91 :I* 
FUR!R HA/5$ ! G5]AL PROCESS ( CAPITAL CONC5TRATION ?R\< ACTUAL 
FUSIONS & LIQUIDATION'S4 ,)\T GO+ FUR!R 9TO ?IS WELL-KN[N /ORY1 
:I* WAS WIDELY CELEBRAT$ AS AN 0ECONOMIC MIRACLE0 & HAS BE5 
EXCESSIVELY DOCUM5T$1 IT %\LD BE SAID ?AT IT REPRES5TS NO MORE ?AN AN 
ACCEL]AT$ RATE ( ACCUMULATION :I*1 JU/ BECAUSE ( ?IS ACCEL]ATION1 
RAIS$ ! PR(IT RATE TO A PO9T P]MITT+ AN 9CREASE 9 ! PRODUCT %>E 
9T5D$ = CONSUMPTION ALONG ) PRODUCTION AS A :OLE4 

,! 0NEW ECONOMIES10 H[EV]1 HAD BE5 DEVELOP$ TO MEET ! 
*ALL5GE ( A CRISIS APP>5TLY )\T 5D4 ,KEYNESIANISM HAD TAK5 TWO 
DIRECTIONS4 ,ONE T5D5CY AIM$ AT OV]COM+ ! CRISIS BY /ATE 9T]V5TIONS 
70PUMP PRIM+07 9 ORD] TO GIVE ! ECONOMY FREE RE9 AGA9 ONCE EXPANSION 
WAS A*IEV$4 ,! O!R WAS CONV9C$ ?AT CAPITALISM HAD ALREADY REA*$ A 
/ATION>Y /ATE & W\LD !RE=E ALWAYS REQUIRE /ATE 9T]V5TION4 ,AS WE 
KN[1 ! ACTUAL DEVELOPM5T ( ! ECONOMY CONFIRM$ NEI!R ( !SE VIEWS 
BUT L$ TO A COMB9ATION ( PROSP]ITY & CONT9U+ /ATE MANAGEM5T ( ! 
ECONOMY4 ,9 ,WE/]N ,EUROPE ?IS TOOK ! =M ( A /ATE-=C$ ACCEL]ATION ( 
ACCUMULATION1 SO ?AT ! 0SOCIAL M>KET ECONOMY0 DID NOT DIFF] 
FROM ! 0MIX$ ECONOMY40 ,9 ,AM]ICA1 H[EV]1 IT REMA9$ 
NECESS>Y TO KEEP ! LEVEL ( PRODUCTION /ABLE BY MEANS ( PUBLIC SP5D+1 
:I* L$ TO SL[ BUT SURE GR[? ( ! NATIONAL DEBT4 

,! GR[? ( ! PUBLIC DEBT CAN ALSO BE TRAC$ TO ,AM]ICA'S 
IMP]IALI/IC POLICY &1 LAT]1 TO ! W> 9 ,VIETNAM 9 P>TICUL>4 ,BUT S9CE 
UNEMPLOYM5T DID NOT FALL BEL[ #d P]C5T ( ! TOTAL LABOR =CE & 
PRODUCTION CAPACITY WAS NOT FULLY UTILIZ$1 IT IS MORE ?AN PLAUSIBLE ?AT 
)\T ! 0PUBLIC CONSUMPTION0 ( >MAM5TS & HUMAN SLAU<T]1 
! NUMB] ( UNEMPLOY$ W\LD HAVE BE5 MU* HI<] ?AN IT ACTUALLY WAS4 ,& 
S9CE AB\T HALF ( WORLD PRODUCTION WAS ,AM]ICAN1 DESPITE ! UPSW+ 9 
,WE/]N ,EUROPE & ,JAPAN1 ONE CANNOT REALLY SPEAK ( A COMPLETE OV]COM+ ( 
! WORLD CRISIS1 P>TICUL>LY NOT :5 ! UND]DEVELOP$ C\NTRIES >E TAK5 
9TO CONSID]ATION4 ,H[EV] BRILLIANT ! PROSP]ITY WAS1 IT WAS NEV]!LESS 
CONF9$ TO NO MORE ?AN A P>T ( WORLD CAPITAL & DID NOT RESULT 9 A 
G5]AL UPSW+ 5COMPASS+ ! WORLD ECONOMY4 

,H[EV] ?IS MAY BE1 :AT ! 0NEW ECONOMICS0 MA9TA9$ WAS 
?AT CAPITALI/ CRISIS HAD LO/ ITS 9EVITABILITY1 AS EV]Y D[NTURN C\LD BE 
C\NT]ACT$ BY GOV]NM5TAL MEASURES4 ,! CRISIS CYCLE WAS SUPPOS$LY A ?+ 
( ! PA/1 = EV]Y SETBACK TO PRIVATE PRODUCTION C\LD BE COMP5SAT$ BY AN 
EQUIVAL5T 9CREASE ( /ATE-9DUC$ PRODUCTION4 ,A :OLE >S5AL ( ME?ODS ( 
ECONOMIC MANAGEM5T WAS N[ AVAILABLE TO SECURE ECONOMIC EQUILIBRIUM & 
EQUILIBRAT$ DEVELOPM5T4 ,AN EXPANSIVE MONET>Y POLICY TO /IMULATE PRIVATE 
9VE/M5TS1 FISCAL FLEXIBILITY1 BUILT-9 /ABILIZ]S LIKE UNEMPLOYM5T 
9SURANCE - SU* MEANS1 TOGE!R ) ! DEFICIT F9ANC+ ( PUBLIC 
EXP5DITURE1 GU>ANTE$ A REGULAT$ ECONOMY ) FULL EMPLOYM5T & PRICE 
/ABILITY1 :I* NE$$ ONLY ! GOV]NM5T'S DECISION TO BE MADE A 
REALITY4 

,TO DEMON/RATE ! ILLUSORY *>ACT] ( ! IDEA ( A /ATE REGULATION ( 
! ECONOMY BY WAY ( COMP5SATORY MEASURES1 ! ,M>XIAN CRITIQUE ( ECONOMICS 
ONLY HAS TO PO9T \T ! PR(IT-ORI5T$ NATURE ( CAPITALI/ PRODUCTION4 ,?IS 
IS NOT TO D5Y ALL EFFICACY TO ,KEYNESIAN ME?ODS4 ,JU/ AS ! EXPANSION ( 
PRIVATE CR$IT CAN /IMULATE ECONOMIC ACTIVITY BEYOND ! LEVEL TO :I* IT 
W\LD O!RWISE BE LIMIT$1 ! EXPANSION ( PUBLIC SP5D+ REALIZ$ ?R\< 
CR$IT CAN ALSO AT FIR/ HAVE A /IMULAT+ EFFECT ON ! ECONOMY AS A :OLE4 
,BUT BO? ME?ODS F9D !IR LIMITS 9 ! ACTUAL PRODUCTION ( PR(IT4 ,BECAUSE 
( !SE LIMITS IT IS POSSIBLE TO AB/RACT FROM CR$IT 9 ! !ORY ( 
CAPITALI/ DEVELOPM5T )\T !REBY D5Y+ ! ACTUAL ROLE ( CR$IT4 ,:]E 
!RE IS NO PR(IT TO BE HAD1 CR$IT WILL NOT BE S\<T2 & :5 ! ECONOMY 
IS 9 A D[NTURN1 CR$IT IS SELDOM GRANT$4 ,( C\RSE1 CAPITALI/ PRODUCTION 
HAS BE5 BAS$ ON CR$IT = A LONG TIME )\T ?IS AFFECT+ ITS 
SUSCEPTIBILITY TO CRISIS4 ,:ILE ! EXT5SION ( ! CR$IT SY/EM CAN BE A 
FACTOR DEF]R+ CRISIS1 ! ACTUAL \TBREAK ( CRISIS MAKES IT 9TO AN 
AGGRAVAT+ FACTOR BECAUSE ( ! L>G] AM\NT ( CAPITAL ?AT MU/ BE 
DEVALU$1 AL?\< 9 ! 5D ?IS DEVALUATION 9 TURN IS A MEANS TO OV]COME 
! CRISIS4 

,! FACT ?AT /ATE-9DUC$ PRODUCTION HAS BE5 EXP&$ BY MEANS ( CR$IT 
ALREADY 9DICATES ?AT ! PRIVATE EXPANSION ( IT HAS NOT BE5 ABLE TO SU/A9 
PROSP]ITY4 ,S9CE /ATE-9DUC$ PRODUCTION 9 COMPETITION ) PRIVATE CAPITAL 
W\LD 9CREAS+LY AGGRAVATE ! ECONOMIC DIFFICULTIES ( ! LATT] )\T 
*ANG+ ! L[ PR(ITABILITY1 ! /ATE PRODUCES NOT GOODS = ! M>KET1 
:]E !IR VALUE C\LD BE REALIZ$ & ACCUMULAT$1 BUT GOODS = 
0PUBLIC CONSUMPTION40 ,?IS 0PUBLIC CONSUMPTION0 IS AT 
ALL TIMES PAID = BY TAXATION ( ! WORK]S & ! SURPLUS-VALUE-PRODUC+ 
CAPITAL 9 ORD] TO SATISFY ! G5]AL NE$S ( CAPITALI/ SOCIETY4 ,! 
EXT5SION ( 0PUBLIC CONSUMPTION0 ?R\< DEFICIT F9ANC+ ALSO 
IMPLIES A D$UCTION FROM SURPLUS VALUE & A DECREASE 9 PRIVATE CONSUMPTION1 
AL?\< ) A DELAY1 S9CE ?IS F9ANC+ IS ACCOMPLI%$ NOT ?R\< 
ADDITIONAL TAXATION BUT ?R\< ! MOBILIZATION ( PRIVATE MONEY-CAPITAL = A 
LONG P]IOD1 I4E41 ?R\< ! PUBLIC DEBT4 

,! :OLE MATT] F9ALLY COMES D[N TO ! SIMPLE FACT ?AT :AT IS CONSUM$ 
CANNOT BE ACCUMULAT$1 SO ?AT ! GR[? ( 0PUBLIC CONSUMPTION0 
CANNOT BE A MEANS TO TRANS=M A /AGNAT+ OR DECL9+ RATE ( ACCUMULATION 
9TO A RIS+ ONE4 ,IF ! RATE ( ACCUMULATION IS IMPROV$1 IT IS DUE NOT TO 
PUBLIC EXP5DITURES BUT TO A RE/OR$ PR(ITABILITY ( CAPITAL1 ACCOMPLI%$ BY 
! CRISIS1 SUFFICI5TLY VIGOR\S TO LAUN* A NEW EXPANSION DESPITE ! 
9CREASE 9 PUBLIC EXP5DITURES4 ,?IS ALSO IS NOT ALT]$ BY ! FACT ?AT ! 
ECONOMIC /IMULATION DUE TO /ATE EXP5DITURES CAN BE AN IMPETUS TO FUR!R 
EXPANSION1 S9CE ! EXPANSION ITSELF CAN ONLY BE A*IEV$ ?R\< ! 
ACTUAL 9CREASE ( PRIVATE SURPLUS VALUE4 ,)\T ?IS1 /ATE-9DUC$ 
PRODUCTION CAN LEAD ONLY TO A FUR!R COLLAPSE ( ! RATE ( ACCUMULATION4 

0,MIX$ ECONOMY0 MEANS ?AT A P>T ( ! NATIONAL PRODUCTION REMA9S 
PRODUCTION = ! PR(IT ( PRIVATE CAPITAL1 :ILE A SMALL] P>T CONSI/S ( 
/ATE-9DUC$ PRODUCTION YIELD+ NO SURPLUS VALUE4 ,?US ! TOTAL PRODUCTION 
HAS A SMALL] MASS ( PR(IT AT ITS DISPOSAL4 ,S9CE 9 G5]AL ! /ATE DOES 
NOT [N MEANS ( PRODUCTION & RAW MAT]IALS1 IT MU/ MAKE USE ( UNUTILIZ$ 
CAPITAL TO GET /ATE-9DUC$ PRODUCTION GO+2 ?AT IS1 IT MU/ PLACE ORD]S 
) V>I\S 5T]PRISES ?AT SELL ! PRODUCT REQUE/$ TO ! /ATE4 ,!SE 
5T]PRISES MU/ VALORIZE !IR CAPITAL & EXTRACT SURPLUS VALUE FROM ! 
WORK]S !Y EMPLOY4 ,?IS SURPLUS VALUE1 H[EV]1 IS NOT REALIZ$ ON ! M>KET 
BY EX*ANGE AGA9/ O!R COMMODITIES BUT IS REALIZ$ BY ! MONEY BORR[$ BY 
! GOV]NM5T4 ,! PRODUCTS !MSELVES >E EI!R US$ OR WA/$4 

,= ! CAPITALI/S FILL+ ! /ATE'S ORD]S1 LIFE HAS BE5 MADE 
EASI]1 AS !Y DO NOT HAVE TO WORRY AB\T PRODUCTION & REALIZATION4 ,! P>T 
( CAPITAL BLESS$ ) GOV]NM5T ORD]S REALIZES ITS PR(IT EXACTLY LIKE ! 
P>T ?AT PRODUCES PR(ITABLY = ! M>KET4 ,BUT ITS 9COME HAS AN EQUIVAL5T 
9 TAXATION & PUBLIC DEBT4 ,IT SEEMS AS IF ! /ATE-9DUC$ PRODUCTION HAS 
9CREAS$ ! TOTAL PR(IT4 ,BUT 9 REALITY ONLY ! SURPLUS VALUE REALIZ$ ON 
! M>KET IS NEWLY PRODUC$ SURPLUS VALUE :ILE ! SURPLUS VALUE 
0REALIZ$0 ?R\< /ATE PUR*ASES IS SURPLUS VALUE PREVI\SLY 
PRODUC$ & OBJECTIFI$ 9 MONEY CAPITAL4 

,IF ! CRISIS W\LD COMPLETELY & G5]ALLY DE/ROY ! PR(ITABILITY ( 
CAPITAL1 CAPITALI/ PRODUCTION W\LD /OP4 ,9 REALITY1 EV5 9 ! DEP? ( 
CRISIS A PORTION ( CAPITAL REMA9S SUFFICI5TLY PR(ITABLE TO CONT9UE 
PRODUC+1 AL?\< ON A R$UC$ SCALE4 ,ANO!R P>T FALLS VICTIM TO ! CRISIS 
& ?US HELPS PRES]VE ! PR(ITABILITY ( ! REMA9+ CAPITALS4 ,IF ?IS 
PROCESS DEVELOPS FREELY1 AS WAS G5]ALLY ! CASE ) ! CRISES ( ! 
N9ETE5? C5TURY1 A %ORT] OR LONG] P]IOD ( SUFF]+ GIVES WAY TO A 
SITUATION 9 :I* CAPITAL1 ) AN ALT]$ /RUCTURE & A HI<] RATE ( 
EXPLOITATION1 CAN RECOMM5CE ACCUMULATION1 PU%+ IT BEYOND ! LEVEL REA*$ 
BE=E ! CRISIS4 ,UND] ! CIRCUM/ANCES ( ! PRES5T DAY1 ?IS 
0HEAL+ PROCESS0 IS SOCIALLY TOO RISKY1 REQUIR+ /ATE 
9T]V5TIONS TO AVOID SOCIAL UPHEAVALS4 

,DUE TO ! HI< LEVEL ( CAPITAL CONC5TRATION ALREADY A*IEV$1 ! 
DEVALUATION ( CAPITAL BY WAY ( COMPETITION & ! IMPROVEM5T ( 
PR(ITABILITY BY WAY ( CONC5TRATION HAVE LO/ MU* ( !IR EFFECTIV5ESS 
UNLESS !SE PROCESSES >E EXT5D$ BEYOND NATIONAL B\ND>IES TO ! WORLD 
ECONOMY1 :I* MU/ LEAD TO >M$ CONFRONTATIONS4 ,S9CE ! CONC5TRAT$ 
CAPITALS TOTALLY DISREG>D SOCIAL NE$S1 EV5 AS CAPITALI/ICALLY DEF9$1 
!SE NE$S MU/ BE SUPPLI$ BY POLITICAL MEANS1 = EXAMPLE1 BY /ATE 
SUBSIDIZATION ( PR(IT-POOR BUT NECESS>Y BRAN*ES ( PRODUCTION4 ,9 %ORT1 
! VIABILITY ( SOCIETY REQUIRES /ATE 9T]V5TION 9 ! DI/RIBUTION ( ! 
TOTAL SOCIAL PR(IT4 

,?IS R$I/RIBUTION ( ! SOCIAL PR(IT 9 ! =M ( /ATE-9DUC$ 
PRODUCTION 9 NO WAY *ANGES ! QUANTITY ( ?IS PR(IT4 

,S9CE ! ADDITIONAL PRODUCTION YIELDS NO PR(IT ( ITS [N1 IT IS ( NO 
S]VICE TO ! ACCUMULATION ( CAPITAL4 ,S9CE ! CRISIS RESULTS FROM 
9SUFFICI5T ACCUMULATION1 IT IS NOT ELIM9AT$ BY /ATE-9DUC$ PRODUCTION4 ,ON 
! ASSUMPTION ( A CAPITALISM 9CAPABLE ( FUR!R ACCUMULATION1 ?US ( A 
SITUATION ( P]MAN5T CRISIS1 :I* IS A REAL POSSIBILITY1 ! ATTEMPT TO 
COMBAT ! CRISIS ?R\< DEFICIT-F9ANC$1 UNPR(ITABLE PUBLIC SP5D+ W\LD 
TAKE ! FOLL[+ =M3 ! /ATE BORR[S MONEY TO BUY PRODUCTS ?AT O!RWISE 
W\LD NOT HAVE BE5 PRODUC$4 ,?IS ADDITIONAL PRODUCTION HAS AN IMM$IATE 
POSITIVE EFFECT ON ! ECONOMY AS A :OLE 7AL?\< ?IS CANNOT BE ASCRIB$ TO 
! FA%IONABLE BUT PURELY SPECULATIVE 0MULTIPLI]10 BAS$ ON ! 
UNT5ABLE B\RGEOIS ECONOMIC !ORY74 ,IT IS OBVI\S ?AT EV]Y NEW 9VE/M5T1 
:ATEV] ITS ORIG91 MU/ /IMULATE ECONOMIC ACTIVITY UNLESS IT ALSO LEADS TO 
DIS9VE/M5T C\NT]ACT+ ?IS /IMULATIVE EFFECT4 ,PRODUCTS >E MANUFACTUR$ 
& WORK]S HIR$1 & ! G5]AL LEVEL ( DEM& MU/ RISE ALONG ) ! NEW 
9VE/M5TS4 ,BUT S9CE ! ADDITIONAL PRODUCTION YIELDS NO PR(IT1 ! 
ACCUMULATION DIFFICULTY ( CAPITAL IS NOT SOLV$4 ,AT FIR/1 H[EV]1 
?IS DIFFICULTY M]ELY P]SI/S1 )\T BE+ AGGRAVAT$ BY ! /ATE-9DUC$ 
PRODUCTION4 

,S9CE UND] \R ASSUMPTION PRIVATE CAPITAL IS NOT ACCUMULAT+ & 
/ATE-9DUC$ PRODUCTION1 AS PRODUCTION = 0PUBLIC CONSUMPTION10 
CAN CONTRIBUTE NO?+ TO ACCUMULATION1 ! MA9T5ANCE ( ! EXI/+ LEVEL 
( PRODUCTION CONT9UALLY REQUIRES ADDITIONAL /ATE EXP5DITURES & !RE=E 
! P]PETUAL GR[? ( ! NATIONAL DEBT4 ,ITS 9T]E/ OBLIGATIONS REQUIRE ! 
/ATE TO IMPOSE CORRESPOND+LY HI<] TAXES ON PRODUCTIVE CAPITAL4 ,( C\RSE1 
!SE 9T]E/ PAYM5TS >E A S\RCE ( 9COME = ! /ATE'S CR$ITORS 
& AS SU* RE5T] CONSUMPTION OR >E AGA9 9VE/$ EI!R 9 ! PRIVATE 
ECONOMY OR 9 /ATE PAP]4 ,BUT WE >E DEAL+ H]E 9 ANY CASE ) ONE & ! 
SAME SUM :I* IS GIV5 UP AS PR(IT 9 ORD] TO APPE> ELSE:]E AS 9T]E/4 
,S9CE A NON-ACCUMULAT+ CAPITALISM IS NOT SIMPLY A /ATION>Y /ATE BUT 
IMPLIES A REGRESSIVE SITUATION1 ! DECL9E 9 ! ECONOMY MU/ LEAD TO MORE 
& MORE GOV]NM5TAL 9T]V5TIONS1 :I* 9CREAS+LY WEAK5 ANY NEW 
POSSIBILITY ( AN UPSW+ = PRIVATE CAPITAL4 ,! COMP5SATORY /ATE-9DUC$ 
PRODUCTION ?US *ANGES FROM ! MEANS ( EAS+ ! CRISIS IT ORIG9ALLY WAS 
TO A FACTOR DEEP5+ ! CRISIS1 AS IT DIVE/S AN 9CREAS+ P>T ( SOCIAL 
PRODUCTION ( ITS *>ACT] AS CAPITAL1 NAMELY ITS ABILITY TO PRODUCE 
ADDITIONAL CAPITAL4 

,! PURPOSE ( ?IS PICTURE ( A /ATE ( P]MAN5T CRISIS IS ONLY TO 
DEMON/RATE ?AT UNPR(ITABLE /ATE-9DUC$ PRODUCTION1 F> FROM BE+ A MEANS 
( OV]COM+ CRISIS1 MU/ 9 ! C\RSE ( TIME CALL ! CAPITALI/ MODE ( 
PRODUCTION ITSELF 9TO QUE/ION4 ,H[EV]1 S9CE ! CRISIS DEVELOPS )9 
ITSELF ! CONDITIONS REQUIR$ TO SURM\NT IT1 ! NE$ = CONT9UALLY 
9CREAS+ /ATE-9DUC$ PRODUCTION DISAPPE>S1 AP>T FROM ! FACT ?AT ! 
GOV]NM5TS CONC]N$1 S9CE !Y >E CAPITALI/ GOV]NM5TS1 !MSELVES FEEL 
! NE$ TO DISMANTLE /ATE 9T]V5TION AT ! PO9T AT :I* IT BECOMES 
DANG]\S = ! SY/EM4 ,TO PRES]VE ! CAPITALI/ ECONOMY NOT JU/ 
PRODUCTION BUT ! PRODUCTION ( PR(IT IS REQUIR$4 ,IF PR(IT C\LD BE 
9CREAS$ SIMPLY BY ADDITIONAL PRODUCTION1 CAPITAL W\LD SEE TO IT ITSELF & 
/ATE 9T]V5TION W\LD NOT BE NE$$4 

,B\RGEOIS ECONOMICS DOES NOT ?9K 9 T]MS ( ! CATEGORIES ( VALUE & 
SURPLUS VALUE4 ,FROM ITS PO9T ( VIEW PR(IT IS NOT SE5 AS ! DET]M9+ 
FACTOR ( ! ECONOMY & ITS DEVELOPM5T2 9DE$1 IT DISPUTES EV5 ! 
EXI/5CE ( PR(IT4 0,MU* ( :AT IS ORD9>ILY CALL$ PR(IT10 
WRITES ,PAUL ,SAMUELSON1 = EXAMPLE1 0IS REALLY NO?+ BUT 9T]E/1 
R5TS1 & WAGES UND] A DIFF]5T NAME40 ,:5 NO DI/9CTION IS MADE 
BETWE5 WAGES & PR(ITS1 ! RELATION%IP BETWE5 PRODUCTION & PR(IT 
PRODUCTION IS ALSO OBSCURE1 & EV]Y SORT ( ACTIVITY IS REPRES5T$ EQUALLY 
9 ! NATIONAL 9COME1 FROM :I* EV]Y 9DIVIDUAL DRAWS HIS %>E 9 
PROPORTION TO HIS CONTRIBUTION4 ,9 ! TOTAL PRODUCTION EXPRESS$ 9 MONEY 
T]MS1 ! DIFF]5CE BETWE5 PR(ITABLE & UNPR(ITABLE PRODUCTION 
DISAPPE>S1 & /ATE-9DUC$ PRODUCTION & PRIVATE PRODUCTION >E CONFUS$ 9 
A NI<T 9 :I* ALL PRICE RELATIONS1 LIKE ALL CATS1 >E GRAY4 ,AS A RESULT 
B\RGEOIS ECONOMICS IS UNABLE TO =ESEE ! CONSEQU5CES ( ITS [N 
PRESCRIPTIONS4 

,NEV]!LESS1 ! 0NEW ECONOMICS0 CLAIM$ ! HONOR ( HAV+ 
F\ND ! KEY TO ! SOLUTION ( ! PROBLEM ( CRISIS4 ,ONLY LAT] WAS IT 
APP>5T ?AT IT HAD /RUTT$ 9 BORR[$ PLUMES1 & ?AT ! ACTUAL 
OV]COM+ ( ! CRISIS [$ NO?+ TO ! ,KEYNESIAN ANTI-CRISIS 
ME*ANISM4 ,AS ALREADY PO9T$ \T1 ?IS IS NO REASON TO D5Y ?AT IT HAS HAD 
ANY ECONOMIC EFFECT1 S9CE IT CAN S]VE TO 9ITIATE A NEW PROSP]ITY :5 ! 
POT5TIAL = SU* A PROSP]ITY ALREADY EXI/S4 ,9 ITSELF1 H[EV]1 ADDITIONAL 
/ATE-9DUC$ PRODUCTION CANNOT 9CREASE ! SOCIAL SURPLUS VALUE & ,A MU/ 
DECREASE IT IF IT CONT9UES TO EXP&4 ,NEV]!LESS1 ! EXT5SION ( 
PRODUCTION ?AT ACCOMPANIES IT1 LIKE ANY EXT5SION ( CR$IT1 CAN MITIGATE ! 
CONDITIONS ( CRISIS1 S9CE ITS NEGATIVE EFFECT ON ! TOTAL PR(IT WILL ONLY 
BE VISIBLE AT A LAT] PO9T4 ,9 ! %ORT RUN ! /ATE-9DUC$ 
PRODUCTION (F]S PRIVATE CAPITAL A WID] RANGE = ACTION & AN IMPROV$ 
BASIS = ITS [N EF=TS TO ESCAPE FROM ! %ORTAGE ( PR(ITS = 
ACCUMULATION4 ,IF 9 ! MEANTIME PRIVATE CAPITAL SUCCE$S 9 EXTRICAT+ ITSELF 
FROM ! CRISIS1 ?IS MAY APPE> TO BE A RESULT ( ! /ATE'S 
9T]V5TIONS1 AL?\< ! LATT] W\LD HAVE HAD NO SUCCESS )\T ! 
IMPROVEM5T1 9DEP5D5T ( !M1 ( CAPITAL'S ABILITY TO EXP& 
ITSELF4 

,!RE IS !RE=E NO CONTRADICTION 9 SEE+ BO? A CRISIS-MITIGAT+ & A 
CRISIS-%>P5+ FACTOR 9 GOV]NM5TAL FISCAL POLICY4 ,! ADDITIONAL 
PRODUCTION MADE POSSIBLE BY DEFICIT F9ANC+ DOES APPE> AS ADDITIONAL DEM&1 
BUT AS DEM& UNACCOMPANI$ BY A CORRESPOND+ 9CREASE 9 TOTAL PR(ITS4 ,! 
ADDITIONAL DEM& CONSI/S ( MONEY 9JECT$ 9TO ! ECONOMY BY ! /ATE 9 
! =M ( GOV]NM5TAL CR$IT4 ,IT NONE!LESS FUNCTIONS IMM$IATELY AS AN 
9CREASE 9 DEM& ?AT /IMULATES ! ECONOMY AS A :OLE & CAN BECOME ! 
PO9T ( DEP>TURE = A NEW PROSP]ITY IF 9SUP]ABLE B>RI]S DO NOT /& 9 
! WAY ( SU* A PROSP]ITY4 ,BUT ONLY UND] SU* CIRCUM/ANCES CAN ! 
UNPR(ITABLE EXPANSION ( PRODUCTION SMOO? ! WAY = A PR(ITABLE EXPANSION 
)\T EV5 !N LOS+ ITS CAPITALI/ICALLY UNPRODUCTIVE *>ACT]4 ,IT IS ! 
CAPITALI/ICALLY UNPRODUCTIVE NATURE ( /ATE-9DUC$ PRODUCTION ?AT SETS 
DEF9ITE LIMITS TO ITS UTILIZATION 9 CAPITALI/ SOCIETY1 LIMITS ?AT >E 
REA*$ MORE QUICKLY ! LONG] CAPITAL REMA9S 9 CRISIS4 

,9 ALL CIRCUM/ANCES ! PRODUCTION IT 9DUCES IS DUE NOT TO ! /ATE 
ITSELF BUT TO ITS CR$ITWOR?9ESS4 ,IT IS PRIVATE CAPITAL ?AT MU/ FOOT ! 
BILL & SP5D ! MONEY TO 9CREASE DEM&4 ,?US IT IS PRIVATE CAPITAL ITSELF 
?AT F9ANCES ! DEFICIT1 & IT IS READY TO DO SO PRECISELY BECAUSE IT IS 
UNABLE TO OP]ATE OR EV5 ?9K 9 T]MS ( SOCIETY AS A :OLE4 ,! MONEY 
PLAC$ AT ! GOV]NM5T'S DISPOSAL YIELDS 9T]E/1 & IT IS ?IS 
9T]E/ ?AT GIVES SOME NUMB] ( CAPITALI/S SUFFICI5T REASON TO L5D !IR 
MONEY TO ! /ATE4 ,ONCE ?IS PROCESS IS SET 9 MOTION1 IT LEADS TO ! 
IMPOSITION ( A GR[+ TAX BURD5 ON ! CAPITAL /ILL PRODUC+ AT A PR(IT1 
:I* IS !REBY DRAWN 9TO ! F9ANC+ ( ! DEFICIT4 ,9 ?IS WAY ! TOTAL 
CAPITAL1 BO? MONEY CAPITAL & PRODUCTIVE CAPITAL1 BECOMES B\ND UP ) 
UNPR(ITABLE PRODUCTION44 ,! P>T ( CAPITAL ?AT 7AS WE SAW ABOVE7 MAKES A 
PR(IT EV5 DUR+ ! CRISIS1 )\T TRANS=M+ IT 9TO ADDITIONAL CAPITAL1 
SEES ITS PR(ITABILITY CUT EV5 FUR!R AS A RESULT ( ! GR[? ( /ATE 
PRODUCTION1 UNTIL 9 ! C\RSE ( TIME ! UNWILL+NESS TO 9VE/ BECOMES ! 
OBJECTIVE IMPOSSIBILITY TO DO SO4 ,9 ?IS S5SE1 9 ! ABS5CE ( A 
SPONTANE\S REPRISE ( PR(ITABLE ACCUMULATION1 /ATE-9DUC$ PRODUCTION WILL 
*ANGE FROM A RESULT ( A CRISIS 9TO A CAUSE ( ITS FUR!R AGGRAVATION4 

,! POSITIVE EFFECT ( /ATE 9T]V5TION ON ! ECONOMY IS ?US ONLY 
TEMPOR>Y & TURNS 9TO ITS OPPOSITE IF ! EXPECT$ /IMULATION ( PR(ITABLE 
PRODUCTION DOES NOT OCCUR OR TAKES TOO LONG4 ,! REPRES5TATIVES ( ! 
0NEW ECONOMICS0 HAD1 SO TO SPEAK1 A /ROKE ( LUCK1 9 ?AT ! NEW 
PROSP]ITY1 :I* !Y DID NOT EXPECT1 DEVELOP$ ALONG ) ! /ATE 
9T]V5TIONS4 ,IF IT HAD NOT DEVELOP$1 ! /IMULAT+ EFFECT ( ! 
/ATE-9DUC$ 9CREASE 9 PRODUCTION W\LD HAVE PROGRESSIVELY DECL9$1 UNTIL 
! GOV]NM5T'S ACTION ITSELF BECAME AN OB/ACLE TO ! SURM\NT+ ( 
! CRISIS4 ,IF ,KEYNESIANISM DOES NOT DES]VE ! CR$IT = ! ACTUAL 
PROSP]ITY1 IT DOES NOT PROVIDE WEAPONS = FI<T+ CRISIS EI!R2 H5CE ! 
CAPITALI/ LAW ( CRISIS CONT9UES TO DOM9ATE ! SY/EM1 JU/ AS BE=E ! 
DISCOV]Y ( ! 0NEW ECONOMICS40 

,! L5G?Y P]IOD ( UPSW+1 H[EV]1 WAS IMPRESSIVE 5\< TO /IMULATE 
! EXPECTATION - JU/ AS AT ! TURN ( ! C5TURY - ?AT ! 
BUS9ESS CYCLE WAS T5D+ TO FLATT5 \T1 SO ?AT ! P]IODS ( DEPRESSION1 
N[ GR[N MILD]1 C\LD BE C\NT]ACT$ BY LESS /R+5T /ATE MEASURES4 ,?OSE 
BREAKS 9 EXPANSION ?AT /ILL OCCURR$ W]E SE5 AS NO MORE ?AN 0GR[? 
RECESSIONS10 :I* DID NOT ?REAT5 ! EXI/+ LEVEL ( PRODUCTION1 OR 
SIMPLE 0PAUSES0 )9 A CONT9UAL 9CREASE ( PRODUCTION4 ,AT ! 
ONSET ( SU* PAUSES ! GOV]NM5TAL MONEY & FISCAL POLICY W\LD BE 5\< 
TO OV]COME ! GAP BETWE5 DEM& & SUPPLY & SO CLE> ! WAY TO FUR!R 
GR[?4 

,! RELATIVE R$UCTION ( ! DEFICIT F9ANC+ ( PUBLIC EXP5DITURES MADE 
POSSIBLE BY ! RAPID DEVELOPM5T ( PR(ITABLE PRODUCTION /R5G!N$ ! 
CONVICTION ?AT ! 9T]PLAY ( ! M>KET ECONOMY & /ATE ECONOMIC 
REGULATION HAD ONCE & = ALL ELIM9AT$ ! CRISIS PROBLEM4 ,:ILE TAXATION 
ABSORB$ A GREAT P>T ( ! NATIONAL 9COME - 9 ,AM]ICA1 E4G41 #cb 
P]C5T & 9 ,WE/ ,G]MANY #ce P]C5T - /ATE EXP5DITURES NEV]!LESS 
DID NOT GR[ FA/] ?AN TOTAL PRODUCTION4 ,& :ILE ! NATIONAL DEBT 
CONT9U$ TO GR[1 IT WAS AT A SL[] PACE4 ,9 ,AM]ICA1 = EXAMPLE1 ! 
NATIONAL DEBT AM\NT$ TO @s#b#g#h4#g BILLION 9 #aide & @s#d#i#c BILLION 9 #a#i#g#c4 ,! 
9T]E/ OBLIGATIONS 9CREAS$ DUR+ ! SAME P]IOD FROM @s#c4#f#f BILLION TO 
@s#b#a4#b BILLION4 ,! %>E ( 9T]E/ CO/S 9 ! NATIONAL PRODUCT NONE!LESS 
REMA9$ ! SAME1 NAMELY #a4#g P]C5T4 ,SIMIL> PROPORTIONS HELD 9 O!R 
C\NTRIES4 ,:AT IS IMPORTANT H]E IS TO SEE ?AT ) A MORE RAPIDLY GR[+ 
TOTAL PRODUCTION1 ! 9T]E/ BURD5 CAN BE KEPT /ABLE DESPITE A GR[+ 
NATIONAL DEBT4 

,! 9CREAS$ %>E ( ! /ATE 9 ! NATIONAL PRODUCT REPRES5TS A DRA9 
ON ! TOTAL SURPLUS VALUE1 ABSORB+ A PORTION ( ! SURPLUS VALUE ?AT CAN 
!RE=E NOT 5T] 9TO ! ACCUMULATION ( PRIVATE CAPITAL4 ,BUT ! FACT ?AT 
PRIVATE CAPITAL ACCUMULATION DID CONT9UE KEPT ! SIZE ( ! /ATE'S 
%>E ( SURPLUS VALUE RELATIVELY /ABLE2 IT GREW SL[LY ?\< 
ABSOLUTELY4 ,! RESULT+ RELATION%IP BETWE5 /ATE-9DUC$ PRODUCTION 
& TOTAL PRODUCTION1 BETWE5 NATIONAL DEBT & NATIONAL 9COME1 CAN MANIFE/ 
ITSELF AS A /EADY GR[? ( PRODUCTION ) A CON/ANT RATE ( ACCUMULATION 
ALONG ) A RELATIVELY L[] RATE ( PR(IT4 ,BUT ?IS RELATION%IP IS 
EXTREMELY DELICATE JU/ BECAUSE ( ! L[ PR(IT RATE1 :I* 9 ADDITION IS 
9FLU5C$ ADV]SELY BY ! CONT9UATION ( ACCUMULATION4 ,ON ! ONE H&1 AS 
WE KN[1 ACCUMULATION 9CREASES ! PRODUCTIVITY ( LABOR2 ON ! O!R1 BY 
RAIS+ ! ORGANIC COMPOSITION ( CAPITAL IT DEPRESSES ! RATE ( PR(IT4 
,EV]Y NEW DIV]G5CE BETWE5 PR(ITABILITY & ACCUMULATION WILL TURN A 
HI!RTO SUPPORTABLE /ATE D$UCTION FROM ! TOTAL SOCIAL PR(IT 9TO A FACTOR 
IMP$+ ! ACCUMULATION PROCESS4 ,?US PRIVATE CAPITAL'S FIR/ REACTION 
TO ! FALL 9 ! ALREADY L[ RATE ( PR(IT IS TO DEM& ! CUTT+ ( 
PUBLIC EXP5DITURE OR ! REE/ABLI%M5T ( A RELATION%IP BETWE5 
/ATE-9DUC$ PRODUCTION & TOTAL PRODUCTION ?AT DOES NOT ?REAT5 
ACCUMULATION4 

,! MORE CAPITAL ACCUMULATES1 ! GREAT] IS ITS S5SITIVITY TO ! QUANTITY 
( PR(IT4 ,TO ESCAPE ! PRESSURE ( ! DECL9+ AV]AGE RATE ( PR(IT & 
TO SAFEGU>D ! VALORIZATION ( ! EXI/+ CAPITAL1 MONOPOLIZ+ CAPITAL 
SEEKS TO SET ITS SUPPLY PRICE TO MEET ITS [N PR(IT REQUIREM5TS SO AS TO MAKE 
ITS [N ACCUMULATION 9DEP5D5T ( ! M>KET4 ,( C\RSE1 ?IS IS POSSIBLE 
ONLY )9 C]TA9 LIMITS4 ,S9CE NEI!R ! TOTAL SOCIAL PRODUCT NOR ! 
TOTAL SURPLUS VALUE CAN BE 5L>G$ BY PRICE MANIPULATIONS1 MONOPOLY PR(ITS 
CAN ONLY >ISE FROM ! FUR!R FALL ( ! PR(ITS ( ! COMPETITIVE 
CAPITALS1 /ILL RUL$ BY ! AV]AGE RATE ( PR(IT4 ,TO ! EXT5T ?AT 
MONOPOLY PR(IT EXCE$S ! AV]AGE PR(IT IT R$UCES ! LATT] & ?US 
CONT9UALLY DE/ROYS ITS [N BASIS4 ,9 ?IS WAY MONOPOLY PR(IT T5DS T[>D 
! AV]AGE PR(IT1 A PROCESS ?AT IS ( C\RSE RET>D$ BY ! 9T]NATIONAL 
EXT5SION ( MONOPOLIZATION4 ,BUT ?IS UNEQUAL APPROPRIATION ( ! TOTAL SOCIAL 
SURPLUS VALUE CANNOT *ANGE ! MAGNITUDE ( ?IS SURPLUS VALUE UNLESS 
MONOPOLIZATION AFFECTS NOT ONLY PRICE DET]M9ATION BUT ALSO ! PRODUCTION 
PROCESS1 AS :5 ! DE/RUCTION ( COMPETITIVE CAPITAL LEADS TO AN 9CREASE 9 
! PRODUCTIVITY ( LABOR & SO ! GR[? ( SURPLUS VALUE4 

,! DEVELOPM5T ( CAPITAL 9 ! MIX$ ECONOMY & UND] ! PRESSURE ( 
MONOPOLY IS F> MORE DEP5D5T ON ! RAPID 9CREASE 9 ! MASS ( SURPLUS 
VALUE ?AN IT WAS UND] LAISSEZ-FAIRE CONDITIONS4 ,S9CE ! GR[? ( 
PRODUCTION EXCLUDES AN EQUIVAL5T GR[? ( PR(ITS & MU/ !RE=E GR[ 
MORE RAPIDLY ?AN PR(IT IF ! LATT] IS TO REMA9 ADEQUATE TO ! 
REQUIREM5TS ( ACCUMULATION1 A SL[+ RATE ( ACCUMULATION MU/ LEAD TO 
CRISIS4 ,9V]SELY1 ACCUMULATION 9 TURN DEP5DS ON SUFFICI5T PR(ITS4 ,BUT JU/ 
AS MONOPOLY PR(ITS CAN BE A*IEV$ = A LONG TIME AT ! EXP5SE ( ! 
G5]AL PR(IT1 SO ALSO ! G5]AL PR(IT CAN BE MA9TA9$ = A CONSID]ABLE 
TIME AT ! EXP5SE ( ! SOCIETY AS A :OLE4 ,! MEANS TO ?IS 5D >E TO BE 
F\ND 9 ! /ATE'S MONEY & FISCAL POLICY4 

,! ACCUMULATION ( CAPITAL 9 ITSELF REPRES5TS NO PROBLEM SO LONG AS ! 
NECESS>Y PR(ITS >E AVAILABLE1 & CAPITAL WAS ACCUMULAT$ = A LONG TIME 9 
G5]AL 9DEP5D5CE ( /ATE EXP5DITURES4 ,! UTILIZATION ( /ATE MONET>Y 
& FISCAL POLICY TO 9FLU5CE ! ECONOMY 9DICATES A SITUATION 9 :I* 
ACCUMULATION HAS BECOME A PROBLEM1 & ONE ?AT CAN NO LONG] BE H&L$ 
)\T CONSCI\S MANAGEM5T ( ! ECONOMIC PROCESS4 ,! PROBLEM IS SUMM$ UP 
9 ! S+LE WORD 0PR(IT40 ,EA* CAPITAL MU/ WORRY AB\T ITS [N 
PR(IT1 BUT IT IS JU/ ?IS ?AT LEADS TO ! CRISIS 7( OV]ACCUMULATION :OSE 
P]IODIC APPE>ANCE BECOMES EV] LESS BE>ABLE4 ,! CONSEQU5CES ( ! CRISIS 
- OV]PRODUCTION & UNEMPLOYM5T - CAN BE MITIGAT$ BY 9CREAS+ 
PUBLIC WORKS1 BUT ! CAUSE ( ! CRISIS - ! LACK ( PR(IT ?AT 
H9D]S FUR!R ACCUMULATION - CANNOT BE DEALT ) 9 ?IS WAY4 ,) 
PUBLIC WORKS AS )\T !M1 IT IS UP TO CAPITAL TO GET ITSELF \T ( ! 
CRISIS4 ,9 ORD] NOT TO PLACE FUR!R DIFFICULTIES 9 CAPITAL'S PA?1 ! 
9CREAS$ PUBLIC EXP5DITURES >E F9ANC$ BY WAY ( DEFICITS4 ,! TAXATION ( 
CAPITAL CAN !RE=E BE FAIRLY RE/RA9$ AT FIR/ 9 ORD] NOT TO DIM9I% 
FUR!R ! NE$$ SURPLUS VALUE4 ,?IS1 H[EV]1 5G5D]S AN 9FLATION>Y 
PROCESS :I*1 ONCE UND] WAY1 CONDITIONS ! FUR!R DEVELOPM5T ( CAPITALI/ 
PRODUCTION4 

,9FLATION IS A WEAPON 9 ! ,KEYNESIAN >S5AL4 ,?R\< ! MORE RAPID 
9CREASE 9 PRICES RELATIVE TO WAGES1 ! PR(IT NECESS>Y = EXPANSION GR[S1 
:ILE ! ACCEL]AT$ CREATION ( MONEY R$UCES ! 9T]E/ ON DEBT1 :I* 
MAKES 9VE/M5T EASI]4 ,9FLATION IS H]E SE5 AS A ME?OD = 5L>G+ 
SURPLUS VALUE4 ,! SURPLUS VALUE GA9$ 9 ?IS WAY1 EQUAL TO ! R$UCTION 9 
! VALUE ( LABOR P[] PLUS ! SURPLUS VALUE TRANSF]R$ FROM MONEY CAPITAL 
TO PRODUCTIVE CAPITAL1 P]MITS A CORRESPOND+ 9CREASE 9 ACCUMULATION4 

,! MONEY BORR[$ BY ! GOV]NM5T IS 9JECT$ 9TO ! ECONOMY ?R\< 
! CONDUIT ( PR(ITLESS PRODUCTION4 ,AL?\< ITS F9AL PRODUCTS FALL 
9 ! SPH]E ( 0PUBLIC CONSUMPTION0 & SO DO NOT APPE> ON ! 
COMMODITY M>KET1 ?IS PRODUCTION DIRECTLY 5L>GES ! TOTAL DEM&4 ,! 
9CREAS$ SUM ( MONEY 5T]+ 9TO CIRCULATION ALL[S ! PRICES ( 
COMMODITIES 9T5D$ = PRIVATE CONSUMPTION ALSO TO RISE4 ,?IS PROCESS IS 
CLE>LY OBS]VABLE 9 W> TIME1 & GOV]NM5TS ATTEMPT TO AVOID ! 9FLATION 
!N RESULT+ FROM ! 9T]ACTION ( A DECREAS$ OR CON/ANT COMMODITY SUPPLY 
) ! 9CREAS$ MONEY 9COME DUE TO W> PRODUCTION BY SU* MEANS AS =C$ 
SAV+S & ! RATION+ ( USE VALUES4 ,IF 9 A WEAK] =M1 ! 9CREASE 9 
! MONEY SUPPLY DUE TO DEFICIT F9ANC+ LEADS TO AN 5DLESS PROCESS ( 
9FLATION1 S9CE NO?+ OPPOSES ! 9CREASE 9 PRICES ! EXPANSION ( ! 
MONEY SUPPLY MAKES POSSIBLE4 

,! 9CREAS$ SUM ( MONEY 5T]+ 9TO CIRCULATION CONFRONTS1 AT FIR/1 AN 
UN*ANG$ TOTAL SURPLUS VALUE 9 ! =M ( A C]TA9 QUANTITY ( COMMODITIES4 
,! 9CREASE 9 PRICES MADE POSSIBLE BY MONET>Y GR[? IMPROVES ! 
PR(ITABILITY ( CAPITAL4 ,TO ! SURPLUS VALUE CREAT$ 9 PRODUCTION IS ADD$ 
! VALUE D]IV$ FROM PRICE 9CREASES OR ! LOSS 9 ! BUY+ P[] ( 
MONEY4 ,?IS 9CREASE 9 PR(IT REPRES5TS A NEW DIVISION ( ! TOTAL SOCIAL 
9COME TO ! ADVANTAGE ( CAPITAL2 IT CANNOT ALT] ! SIZE ( ! TOTAL 
PRODUCT OR ITS VALUE AS SU*4 ,! VALUE ( LABOR P[] IS L[]$ BY ! DET\R 
( CIRCULATION1 AS IS ! 9COME %>E ( ?OSE GR\PS )9 ! POPULATION 
:O LIVE ON SURPLUS VALUE1 ) A CORRESPOND+ 9CREASE 9 ! %>E GO+ TO 
CAPITAL4 ,ONLY IF ! ADDITIONAL SURPLUS VALUE EXTRACT$ VIA ! CIRCULATION 
PROCESS IS ACCUMULAT$1 SO AS TO 9CREASE ! PRODUCTIVITY ( LABOR & !REBY 
! SOCIAL PRODUCT1 HAS ! 9CREAS$ MASS ( PR(IT *ANG$ FROM MONEY =M 
9TO ! CAPITAL =M4 ,O!RWISE ! 9CREAS$ PR(IT ABILITY LEADS ONLY TO A 
FUR!R FALL 9 PRIVATE DEM& & TO MORE UNUS$ CAPITAL4 

,! REAL GA9S ?AT 9FLATION YIELDS TO CAPITAL >E ?US ONLY ANO!R =M 
( ! DEVALUATION ( LABOR P[]1 :I* HAPP5S 9 EV]Y CRISIS4 ,:AT US$ TO 
BE ACCOMPLI%$ BY DEFLATION>Y MEANS IS N[ EFFECT$ BY 9FLATION>Y MEANS1 
NOT BY L[]+ WAGES BUT BY RAIS+ PRICES - OR BY A COMB9ATION ( 
BO?4 ,! 9CREASE 9 PR(ITS BY MEANS ( 9FLATION 5C\NT]S DEF9ITE 
B>RI]S1 H[EV]1 AS ! R$UCTION ( ! VALUE ( LABOR P[] HAS ABSOLUTE 
LIMITS1 & EV5 !SE CANNOT BE REA*$ BECAUSE ( ! RESI/ANCE ( ! 
WORK]S4 ,MOREOV]1 ! 9CREASE 9 TOTAL DEM& BR+S ) IT AN 9CREASE 9 
! DEM& = LABOR P[]1 :I* 9 ITSELF RE/RICTS ! L[]+ ( WAGES BY 
PRICE 9FLATION4 

,! CRISIS CAN ONLY BE SAID TO HAVE BE5 OV]COME :5 CAPITAL VALUE CAN BE 
EXP&$ )\T R$UC+ ! VALUE ( LABOR P[]1 SO ?AT ! NEW PROSP]ITY 
BR+S 9CREAS+ WAGES ) IT4 ,?IS CANNOT BE A*IEV$ ?R\< ! 
0PUBLIC SP5D+0 ( ! GOV]NM5T1 AS ?IS1 9 ! F9AL 
ANALYSIS1 ACCOMPLI%ES ONLY ! DRA9+ ( A GR[+ PORTION ( ! SURPLUS 
VALUE EXI/+ 9 ! =M ( MONEY 9TO 0PUBLIC CONSUMPTION40 ,IF 
! POLICY ( PUBLIC SP5D+ IS NONE!LESS ADOPT$1 IT IS BECAUSE !RE IS NO 
O!R ALT]NATIVE = CAPITAL TO ! RISK ( 9CREAS$ UNEMPLOYM5T & AN 
EXT5SIVE DE/RUCTION ( CAPITAL4 0,PUBLIC CONSUMPTION0 ALSO 
REPRES5TS DE/RUCTION ( CAPITAL1 ACCEPT$ & REGULAT$ 9 ! HOPE ?AT ! 
SY/EM ON ITS [N WILL CREATE ! CONDITIONS = A CONT9UANCE ( CAPITAL 
ACCUMULATION2 IT REPRES5TS1 9 O!R WORDS1 MANAGEM5T NOT ( ! ECONOMY BUT 
( ! CRISIS4 

,IF ! GR[+ PUBLIC EXP5DITURES >E NOT TO BECOME A FACTOR DEEP5+ ! 
CRISIS1 CAPITAL MU/ SUCCE$1 FIR/1 9 KEEP+ ! GR[+ NATIONAL DEBT 
)9 ! LIMITS SET = IT BY ! ACTUAL CREATION ( SURPLUS VALUE1 & 
SECOND1 9 REE/ABLI%+ ! CONDITIONS ( FUR!R ACCUMULATION - ?AT 
IS1 9 9CREAS+ PR(IT MORE QUICKLY ?AN IT IS SP5T 9 UNPR(ITABLE 
PRODUCTION4 ,A C]TA9 AM\NT ( SURPLUS VALUE IS ABSORB$ BY ! /ATE 9 ANY 
EASE1 AP>T FROM ! AM\NT US$ = ! R$UCTION ( UNEMPLOYM5T BY 
/ATE-9DUC$ PRODUCTION4 ,?IS %>E HAS /EADILY GR[N4 ,H]E1 H[EV]1 WE >E 
CONC]N$ ONLY ) ! 9CREASE 9 ! ADDITIONAL AM\NT D$UCT$ FROM SURPLUS 
VALUE = /ATE-9DUC$ PRODUCTION4 ,?IS PRES5TS A FUR!R OB/ACLE TO CAPITAL 
ACCUMULATION1 AL?\< IT IS AN OB/ACLE ?AT CAN BE PU%$ ASIDE IF CAPITAL 
SUCCE$S 9 ABOLI%+ UNEMPLOYM5T BY CONT9U+ TO ACCUMULATE4 ,?IS1 H[EV]1 
REQUIRES A RATE ( ACCUMULATION HI< 5\< = ! ABSOLUTE NUMB] ( 
SURPLUS-VALUE-PRODUC+ WORK]S TO 9CREASE FA/ 5\< TO (F-SET ITS RELATIVE 
DECL9E 7! RIS+ ORGANIC COMPOSITION ( CAPITAL74 ,SU* A RATE ( 
ACCUMULATION WAS APPROA*$ 9 ! PO/W> DECADES BY SEV]AL ,WE/]N ,EUROPEAN 
C\NTRIES2 ! 5SU+ PROSP]ITY EV5 L$ TO ! IMPORT ( LABOR P[]1 
AL?\< ?IS ( C\RSE 9DICAT$ ! P]SI/5CE ( UNEMPLOYM5T 9 O!R 
C\NTRIES4 ,9 ! ,UNIT$ ,/ATES ! UNEMPLOYM5T LEVEL /ABILIZ$ AT AB\T #d 
P]C5T ( ! TOTAL ACTIVE POPULATION - AN (FICIALLY RECOGNIZ$ 
P]C5TAGE ?AT CAME TO BE ACCEPT$ AS 0NORMAL0 & AS COMPATIBLE 
) ! CONCEPT ( 0FULL EMPLOYM5T40 

,! FACT ?AT /ATE-9DUC$ PRODUCTION1 9S(> AS IT WAS REPRES5T$ BY ! 
NATIONAL DEBT1 HAS SO F> AM\NT$ ONLY TO A RA!R SMALL FRACTION ( TOTAL 
PRODUCTION1 TOGE!R ) ! FACT ?AT ITS CO/S W]E AT FIR/ LIMIT$ TO ! 
9T]E/ PAYM5TS ON ! NATIONAL DEBT & SO CLAIM$ ONLY A FRACTION ( ! 
CAPITAL DISAPPE>+ 9TO 0PUBLIC CONSUMPTION10 PO/PON$ ! 
RECKON+ IMPOS$ ON PRIVATE CAPITAL & HAD NO IMM$IATE NEGATIVE EFFECT4 ,( 
C\RSE1 ! MONEY LOAN$ TO ! GOV]NM5T HAS TURN$ 9TO ! NATIONAL DEBT1 
BACK$ BY NO?+ BUT ! GOV]NM5T'S PROMISE TO MEET ITS OBLIGATIONS 
SOME DAY & MEAN:ILE TO PAY ! CR$ITORS ! 9T]E/ DUE !M4 ,! MONEY 
CAPITAL UTILIZ$ BY ! GOV]NM5T IS NOT 9VE/$ AS CAPITAL & SO PRES]V$ 
BUT DISAPPE>S 9TO 0PUBLIC CONSUMPTION40 ,IF ! /ATE DEBT IS EV] 
PAID (F - :I* MAY WELL NOT HAPP5 - IT CAN ONLY BE PAID \T ( 
NEW SURPLUS VALUE FRE%LY CREAT$ 9 PRODUCTION4 ,& ?IS W\LD 9 NO WAY ALT] 
! FACT ?AT ! SURPLUS VALUE REPRES5T$ 9 ! NATIONAL DEBT HAS VANI%$ 
)\T A TRACE 9/EAD ( ADD+ ITS VOLUME TO ! ACCUMULATION ( 
CAPITAL4 

,IT FOLL[S ?AT ! /ATE'S USE ( 9CREAS$ PUBLIC SP5D+ TO FI<T 
CRISIS 5DS BY CONSUM+ CAPITAL4 ,?IS CONSUMPTION ( CAPITAL APPE>S AS A 
GR[? ( PRODUCTION & EMPLOYM5T1 BUT DUE TO ITS UNPR(ITABLE *>ACT]1 IT 
IS NO LONG] CAPITALI/ PRODUCTION & REALLY AM\NTS TO A HIDD5 =M 
( ! EXPROPRIATION ( CAPITAL BY ! /ATE4 ,! /ATE USES ! MONEY ( ONE 
GR\P ( CAPITALI/S TO BUY ! PRODUCTION ( ANO!R GR\P1 ) ! 9T5TION 
( SATISFY+ BO? GR\PS BY ASSUR+ = ONE ! 9T]E/ ON & = ! O!R 
! PR(ITABILITY ( ITS CAPITAL4 ,BUT ! 9COMES ?AT APPE> H]E AS 9T]E/ 
& PR(IT CAN ONLY BE PAID \T ( ! TOTAL SOCIAL SURPLUS VALUE ACTUALLY 
PRODUC$1 EV5 IF ! RECKON+ CAN BE DET]R$4 ,AS A RESULT1 FROM ! 
/&PO9T ( ! SY/EM AS A :OLE ! PROCE$S ( /ATE-9DUC$ PRODUCTION 
MU/ C\NT AS A D$UCTION FROM ! TOTAL PR(IT & !RE=E AS A DIM9UTION 
( ! SURPLUS VALUE NE$$ = ACCUMULATION4 ,S9CE ! CRISIS RESULTS FROM A 
%ORTAGE ( SURPLUS VALUE1 IT CAN H>DLY BE OV]COME BY 9CREAS+ ?IS 
%ORTAGE4 

,IT IS TRUE1 ( C\RSE1 ?AT ! PR(IT %ORTAGE MANIFE/$ 9 ! =M ( 
CRISIS IS NEI!R AGGRAVAT$ NOR DIM9I%$ DIRECTLY BY /ATE-9DUC$ 
PRODUCTION1 & ?AT PRODUCTION1 EMPLOYM5T1 & 9COME 9CREASE JU/ BECAUSE 
MEANS ( PRODUCTION & LABOR P[]1 :I* W\LD NOT HAVE BE5 UTILIZ$ )\T 
! /ATE'S 9T]V5TION1 >E SET 9 MOTION4 ,BUT ! MEANS ( PRODUCTION 
& ! CONSUM] GOODS CONSUM$ BY WORK]S EMPLOY$ 9 ?IS P>T ( PRODUCTION 
DO NOT =M P>T ( CAPITAL1 IF VIEW$ FROM ! /&PO9T ( ! SY/EM AS A 
:OLE4 ,= ! 9DIVIDUAL CAPITALS 9VOLV$1 !IR \TLAYS ON MEANS ( 
PRODUCTION & LABOR P[] FUNCTION AS CAPITAL & YIELD !M PR(ITS4 ,BUT 
!IR PR(IT MEANS A LOSS ( PR(ITS = ALL O!R CAPITALI/S & SO 
/IMULATES !IR ATTEMPTS TO %IFT ?IS LOSS TO ! %\LD]S ( ! POPULATION 
AS A :OLE BY MEANS ( PRICE 9CREASES4 ,S9CE ! LOSS ( PR(ITS DUE TO 
/ATE-9DUC$ PRODUCTION IS SPREAD OV] ! SOCIETY AS A :OLE1 IT REMA9S 
TOL]ABLE = A LONG TIME1 )\T !REBY CEAS+ TO DIM9I% ! TOTAL 
PR(IT4 

,?IS IS NOT ! PLACE TO GO 9TO ! WID] IMPLICATIONS ( /ATE-9DUC$ 
PRODUCTION4 ,:AT IS IMPORTANT = US IS ONLY TO SEE CLE>LY ?AT 
CAPITALISM'S SUSCEPTIBILITY TO CRISIS CANNOT BE OV]COME BY ?IS MEANS4 
,:ATEV] EFFECTS /ATE-9DUC$ PRODUCTION MAY HAVE 9 A CRISIS SITUATION1 IT 
CANNOT 9CREASE PR(ITS & IS !RE=E NO 9/RUM5T = OV]COM+ CRISIS4 
,ITS CONT9U+ USE CAN ONLY 5L>GE ! UNPR(ITABLE PORTION ( SOCIETY'S 
PRODUCTION & 9 ?IS WAY PROGRESSIVELY DE/ROY ITS CAPITALI/ *>ACT]4 ,TRUE 
PROSP]ITY1 9 CONTRA/1 DEP5DS ON ! 9CREASE 9 SURPLUS VALUE = ! 
FUR!R EXPANSION ( CAPITAL4 ,IT MU/ BE ADMITT$ ?AT CAPITAL HAS SUCCE$$ 9 
CREAT+1 \T ( ITS [N RES\RCES1 ! PROSP]ITY ( ! REC5T PA/2 BUT ) 
IT HAS ALSO CREAT$ ! CONDITIONS = A NEW CRISIS4 

,H[EV]1 ?IS /ATEM5T MU/ BE QUALIFI$4 ,JU/ AS ! LA/ GREAT CRISIS 
DIFF]$ FROM ITS PR$ECESSORS1 & 9 ITS L5G?1 EXT5T1 & VIOL5CE %OOK 
! WORLD UNIQUELY1 SO ! PROSP]ITY ?AT BEGAN AFT] ! ,SECOND ,WORLD ,W> HAD 
A P>TICUL> *>ACT] DIFF]5TIAT+ IT FROM E>LI] PROSP]ITIES4 ,IT WAS 
ACCOMPANI$ FROM ! />T BY AN EXTRAORD9>Y GR[? ( CR$IT & SO ( 
MONEY1 :I* LEFT ! 9CREASE 9 PRODUCTION F> BEH9D & /IMULAT$ & 
SU/A9$ ! PROSP]ITY BY MEANS ( 9FLATION4 ,! GR[? ( CR$IT IS A 
*>ACT]I/IC ( EV]Y PROSP]ITY1 & ITS ACCEL]ATION1 ACCORD+ TO ,M>X1 IS 
A SYMPTOM ( APPROA*+ CRISIS4 ,9 B\RGEOIS ECONOMIC !ORY ALSO ! RAPID 
EXPANSION ( CR$IT & ! ACCOMPANY+ PRICE 9FLATION HAVE BE5 VIEW$ AS 
SIGNS ( A PROSP]ITY NE>+ ITS 5D & ! APPROA* ( A P]IOD ( ECONOMIC 
D[NTURN1 S9CE ! RES]VE REQUIREM5TS ( ! BANKS SET DEF9ITE LIMITS TO 
! EXT5SION ( CR$IT4 ,AS !SE LIMITS >E APPROA*$1 ! PRICE ( CR$IT 
SO>S1 & ! DEM& = IT FALLS1 BR++ ! 9FLATION>Y EFFECTS ( ! 
BOOM TO AN 5D4 ,IF ! PROSP]ITY DOES NOT RE/ ON RES\RCES SUFFICI5T TO 
CONT9UE IT1 I4E41 ON A RATE ( PR(IT SUFFICI5T = ACCUMULATION1 IT CAN1 
H[EV]1 BE SU/A9$ BY A LOOS] /ATE MONET>Y & CR$IT POLICY1 ?\< AT 
! CO/ ( 9CREAS+ 9FLATION4 

,A 0*EAP MONEY0 POLICY CUTS D[N ON ! G5]AL DEBT BURD5 & 
LI<T5S ! 9T]E/ S]VICE ON ! NATIONAL DEBT1 ON ! ONE H&1 & ADDS 
TO ! /ATE'S DEM& = CR$IT ! DEM&S ( 9DU/RY & CONSUM]S1 
ON ! O!R4 ,IT MAKES POSSIBLE A RAPID ADVANCE ( PRODUCTION AT ! CO/ ( 
9CREAS+ 9DEBT$NESS & RIS+ 9FLATION4 ,9 ! ,UNIT$ ,/ATES1 = 
9/ANCE1 ! TOTAL PRODUCT GREW BETWE5 #aidf & #aig BY >\ND #ac P]C5T 9 
REAL T]MS1 BUT BY >\ND #cfh P]C5T 9 MONEY T]MS4 ,TOTAL DEBT - 
EXCLUD+ GOV]NM5T DEBT - ROSE DUR+ ! SAME P]IOD BY #gih P]C5T4 
,JU/ LIKE ! GOV]NM5T'S DEM& = CR$IT = ! DEFICIT F9ANC+ ( 
PUBLIC EXP5DITURE1 ! EXPANSION ( PRIVATE CR$IT ALSO 9CREASES ECONOMIC 
ACTIVITY BEYOND ! LEVEL IT W\LD O!RWISE HAVE REA*$1 BUT )\T !REBY 
BE+ ABLE REALLY TO *ANGE ! PRODUCTIVITY ( LABOR & ! QUANTITY ( 
SURPLUS VALUE1 :I* DEVELOP 9DEP5D5TLY ( ! GR[? ( CR$IT4 ,LIKE 
GOV]NM5TAL DEFICIT F9ANC+1 PRIVATE 9DEBT$NESS ALSO DEP5DS ON ! 
EXPECTATION ?AT PRODUCTION WILL GR[ )\T LIMIT & CAN BE EXT5D$ 9 
PROPORTION TO ! EXPANSION ( CR$IT4 

,:AT ?IS PROPORTION IS1 H[EV]1 CANNOT BE E/ABLI%$4 ,9 ! EXPECTATION 
( CONT9U\S & 9CREAS+ PRODUCTION1 ) ! HI<] 9COMES ?IS WILL 
ALL[1 & DRIV5 BY CAPITAL'S NE$ TO EXP& IF IT IS TO MA9TA9 
ITSELF1 CAPITALS COMPETE BY MEANS ( ! CR$IT SY/EM1 :I* ?US RUNS ! 
DANG] ( DEVELOPM5T F> BEYOND ! BASIS AF=D$ BY ! ACTUAL LEVEL ( 
SOCIAL PRODUCTION4 0,( C\RSE1 ! DANG] IS NOT SO GREAT = ! 
CR$ITORS1 :O1 TO A GREAT EXT5T >E FRE$ TO RAISE ! PRICE ( CR$IT & 
CAN 9CLUDE !IR APP>5T LOSSES 9 SETT+ 9T]E/ RATES1 :I* 9 ITSELF 
LEADS TO HI<] PRICES4 ,9 P>T ! RISK IS %IFT$ TO ! POPULATION AS A 
:OLE BY ALL[+ CAPITALI/ DEBTORS TO D$UCT DEBT & 9T]E/ PAYM5TS FROM 
!IR TAXES4 ,NEV]!LESS1 9FLATION>Y CR$IT ESCAPES ! CONTROL ( 
GOV]NM5TAL MONET>Y & CR$IT POLICY1 S9CE 9FLATION ITSELF C\NT]ACTS ! 
/ATE'S RAIS+ ( ! CO/ ( CR$IT BY MANIPULAT+ ! 9T]E/ RATE1 
& S9CE ! DEM& = CR$IT CAN 9CREASE EV5 ) HI<] 9T]E/ RATES4 
,NATURALLY1 ! GOV]NM5T CAN HALT ! EXPANSION ( CR$IT BY 9CREAS+ 
RES]VE REQUIREM5TS1 BUT ?IS W\LD ?REAT5 ! PROSP]ITY ON :I* ! 
GOV]NM5T ITSELF DEP5DS4 ,:5EV] ?IS WAY ( HALT+ 9FLATION HAS BE5 
TRI$1 ! RESULT+ RECESSION HAS =C$ A RETURN TO ! 9FLATION>Y CR$IT 
POLICY4 ,IF ! EXTRAORD9>Y GR[? ( PRIVATE DEBT WAS A MEANS ( MA9TA9+ 
! PROSP]ITY ?ANKS TO :I* ! GR[? ( ! /ATE DEBT C\LD BE SL[$ 
D[N1 ! MONEY & CR$IT 9FLATION W@9 BO? A CAUSE & A CONSEQU5CE ( A 
PROSP]ITY ?AT TO AN 9CREAS+ EXT5T WAS BAS$ ON FUTURE PR(ITS1 & ?AT 
WAS !RE=E B\ND TO COLLAPSE :5 !Y DID NOT APPE>4 ,AS ! 
9FLATION-CAUS$ DIFF]5TIAL BETWE5 PRICE & WAGE =MATION ALL[$ PR(ITS 
TO RISE1 ! PRESSURE ( ACCUMULATION ON ! RATE ( PR(IT WAS LESS 
NOTICEABLE4 ,H[EV]1 ! SOLE RESULT ( ?IS - AT LEA/ = ,AM]ICA1 AS 
NOT$ ABOVE - WAS A PR(IT RATE /ABILIZ$ AT A RELATIVELY L[ LEVEL1 
:I* )\T ! GOV]NM5T'S 9FLATION>Y POLICY W\LD NOT HAVE 
SUFFIC$ TO 5L>GE PRODUCTION TO ! DEGREE ATTA9$4 ,( C\RSE1 ! 9FLATION 
CONTA9S ITS [N CONTRADICTIONS2 FROM A /IMULUS TO ! ECONOMY IT CAN TURN 
9TO A FACTOR UND]M9+ IT1 S9CE ! REAL CONTRADICTIONS ( CAPITALI/ 
PRODUCTION CANNOT BE ELIM9AT$ BY TE*NIQUES ( F9ANCE4 ,IF ! EXPANSION ( 
PRIVATE CR$IT REA*ES ! LIMITS SET BY ! ACTUAL PR(ITABILITY ( CAPITAL1 
!N ! PROSP]ITY IT HAS 5G5D]$ COMES TO AN 5D1 REQUIR+ ADDITIONAL 
/ATE-9DUC$ PRODUCTION IF ! ECONOMIC DECL9E IS TO BE HALT$1 )\T ?US 
BE+ ABLE TO PREV5T IT4 

,FROM ! /&PO9T ( ! 0NEW ECONOMICS10 ! 9FLATION>Y 
MONEY & CR$IT POLICY WAS A ME?OD ( SURM\NT+ CRISIS & RE/OR+ FULL 
EMPLOYM5T4 ,! ILLUSION ?AT ?IS POLICY C\LD LEAD TO ! RE/ORATION ( AN 
EQUILIBRIUM BAS$ ON PRICE /ABILITY SOON DISAPPE>$1 H[EV]1 9 RESPONSE TO 
EMPIRICAL FACTS IF NOT TO !ORETICAL 9SI<T4 ,! ECONOMI/ ,A4 ,W4 ,PHILLIPS1 9 
A HI/ORICAL 9VE/IGATION ( ! RELATION BETWE5 WAGES & EMPLOYM5T LEVELS 
9 ,5GL&1 MADE ! NOT V]Y SURPRIS+ OBS]VATION ?AT RIS+ WAGES & 
PRICES >E CORRELAT$ ) DECREAS+ UNEMPLOYM5T1 & FALL+ WAGES & 
PRICES ) 9CREAS+ UNEMPLOYM5T4 ,FOLL[+ ! CU/OM ( ECONOMI/S1 ?IS 
OBS]VATION WAS GRAPH$1 BY ! SO-CALL$ ,PHILLIPS CURVE1 :I* REPRES5TS 
*ANGES ( WAGES & PRICES AS A FUNCTION ( EMPLOYM5T4 ,?IS WAS SUPPOS$ TO 
%[ CLE>LY ?AT GR[+ EMPLOYM5T IMPLI$ WAGE & PRICE 9FLATION1 SO ?AT 
! ONLY *OICE IS BETWE5 9FLATION & UNEMPLOYM5T4 

,= EXAMPLE1 IT WAS CALCULAT$ ON ! BASIS ( ! ,PHILLIPS CURVE ?AT 9 
PO/W> ,AM]ICA1 )\T 9FLATION UNEMPLOYM5T W\LD RISE TO BETWE5 #f & #h 
P]C5T ( ! WORK+ POPULATION1 :ILE ) A #c OR #d P]C5T RATE ( 
9FLATION IT C\LD BE R$UC$ TO #d OR #d4#e P]C5T4 ,?US !RE WAS NOT ONLY ! 
*OICE BETWE5 UNEMPLOYM5T & 9FLATION BUT ALSO ! POSSIBILITY ( US+ 
/ATE 9T]V5TION TO RE/ORE ! BALANCE BETWE5 UNEMPLOYM5T & 9FLATION 
NECESS>Y = PROSP]ITY4 ,ANY EXCESSIVE 9CREASE 9 UNEMPLOYM5T C\LD BE 
OV]COME ?R\< A CORRESPOND+ 9CREASE 9 9FLATION1 :I*1 9 ! EYES ( 
! ECONOMI/S1 WAS REALLY NOT TOO HI< A PRICE TO PAY = P]MAN5T 
PROSP]ITY4 ,?IS IS BECAUSE1 9 ! WORDS ( A !ORETICIAN ( 
0FUNCTIONAL F9ANCE10 

,9FLATION DOES NOT CON/ITUTE A R$UCTION 9 ! GOODS 
AVAILABLE = PEOPLE TO BUY4 ,! IDEA ?AT ! BUY]'S LOSS FROM 
9FLATION CAN BE TREAT$ AS A SOCIAL LOSS CONTRAV5ES ! FIR/ PR9CIPLE ( 
ELEM5T>Y ECONOMICS3 ! PR9CIPLE ( REMEMB]+ ?AT IF ANYBODY PAYS ANY 
MONEY SOMEBODY ELSE MU/ BE GETT+ IT4 ,EV]Y #a.0 9CREASE 9 PRICES1 AL?\< 
IT MEANS ?AT ! BUY]S HAVE TO PAY #a.0 MORE1 ALSO MEANS ?AT ! SELL]S 
RECEIVE #a.0 MORE4 ,S9CE BO? ! SELL]S & ! BUY]S >E MEMB]S ( ! 
SOCIETY1 SOCIETY 9 ! AGGREGATE NEI!R LOSES NOR GA9S4 ,9DE$1 MO/ PEOPLE 
>E BO? BUY]S & SELL]S1 AT DIFF]5T TIMES ( ! WEEK OR EV5 ( ! DAY2 
SO ?AT ! GREAT] P>T ( ! LOSSES :5 BUY+ & ! GA9S :5 SELL+ 
CANCEL \T1 & P]HAPS ONLY ONE QU>T] ( ! #a.0 ( ! NATIONAL 9COME 
9VOLV$ IS AN ACTUAL TRANSF] FROM SOME PEOPLE TO O!R PEOPLE4 ,?IS NET 
TRANSF] ( #a_/#d ( #a.0 FROM ! BUY]S TO ! SELL]S *ANGES ! DI/RIBUTION 
( 9COME & WEAL?1 BUT !RE IS NO MORE REASON = SUPPOS+ ?AT ! NEW 
DI/RIBUTION IS WORSE ?AN ! OLD DI/RIBUTION ?AN = SUPPOS+ ?AT IT IS 
BETT]4 

,?IS COLD-BLOOD$ FALSIFICATION ( ! REAL FUNCTION ( 9FLATION 5ABL$ 
! REPRES5TATIVES ( ! 0NEW ECONOMICS0 TO SEE !IR !ORY 
EMPIRICALLY CONFIRM$ BY AN 9FLATION>Y PROSP]ITY ) A /ABLE LEVEL ( 
UNEMPLOYM5T UNTIL ONE DAY1 ! 9CREAS+ RATE ( 9FLATION WAS ACCOMPANI$ BY 
GR[+ UNEMPLOYM5T1 & ! !ORY WAS REVEAL$ TO BE FALSE4 ,) ?IS 
B\RGEOIS ECONOMIC !ORY FELL 9TO A SECOND CRISIS1 IF WE SEE ITS FIR/ CRISIS 
9 ! G5]AL CONFUSION ?AT PREC$$ ,KEYNESIANISM & WAS SEEM+LY RESOLV$ 
BY IT4 ,IT WAS REALIZ$ ?AT ! REGULATIVE MEASURES SUGGE/$ BY ,KEYNESIAN 
!ORY >E NOT ONLY LIMIT$ & D\BLE-$G$ BUT ALSO SUBJECT TO CONTRADICTIONS 
9H]5T 9 ! CAPITALI/ SY/EM4 ,ECONOMICS1 :I* ACCORD+ TO ,PAUL ,SAMUELSON 
HAD BE5 TRANS=M$1 ?ANKS TO ,KEYNESIANISM1 FROM A DISMAL 9TO 0A 
*E]FUL SCI5CE10 RELAPS$ 9TO ITS ORIG9AL GLOOM4 0,9 ! 
PO/-,KEYNES ]A10 ,SAMUELSON EXPLA9$1 

WE HAVE AT \R DISPOSAL ! 9/RUM5TS ( A MONET>Y & 
FISCAL POLICY ?AT CAN CREATE ! PUR*AS+ P[] NECESS>Y = ! AVOIDANCE 
( GREAT CRISES4 ,NO WELL-9=M$ P]SON /ILL WORRIES HIMSELF AB\T ! SIZE 
( ! PUBLIC DEBT2 SO LONG AS ! ,GROSS ,NATIONAL ,PRODUCT & ! 
NATION'S FISCAL CAPACITY KEEP PACE ) ! GR[? ( ! 9T]E/ ON ! 
NATIONAL DEBT1 ?IS PROBLEM IS ONLY A WORRY ( ! SEV5TE5? RANK1 & NO-ONE 
IS LOS+ SLEEP OV] GR[+ AUTOMATION OR BUS9ESS CYCLES4 ,H[EV]1 ALONG ) 
ALL \R TRIUMPHANT SATISFACTION !RE IS /ILL A SPECT] ?AT HAUNTS US3 
GALLOP+ 9FLATION4 ,IT IS ! NEW SC\RGE1 :I* ! PRE-#a#i#a#d !ORETICIANS 
DID NOT =ESEE4 - 4 4 ,) :AT WE KN[ TODAY1 WE >E 9DE$ ABLE TO 
AVOID A *RONIC RECESSION1 OR TO 9ITIATE A NE$$ SP5D+ POLICY4 ,BUT WE 
DON'T YET KN[ H[ TO /OP A CO/-PU% 9FLATION1 )\T ! CURE BE+ NE>LY 
WORSE = ! ECONOMY ?AN ! DISEASE4 

,IT COMPLETELY ESCAPES ,SAMUELSON ?AT ! DREAD 0SC\RGE0 ( 
9FLATION & ! 0TRIUMPHANT0 MONET>Y & FISCAL POLICY >E ONE 
& ! SAME & ?AT 9FLATION CANNOT BE F\<T ) 9FLATION4 ,( C\RSE1 HE 
DI/+UI%ES BETWE5 TWO TYPES ( 9FLATION3 FIR/1 ONE /EMM+ FROM AN 
EXCESS DEM& PU%+ UP PRICES1 :I* CAN BE EASILY CONTROLL$ BY CUTT+ 
9COMES2 & SECOND1 ! SUPPLY 9FLATION ( REC5T TIMES1 :I* >ISES 
0FROM ! PRESSURE ( WAGE CO/S ALONG ) ! ATTEMPTS MADE BY GIANT 
FIRMS TO MA9TA9 UNDIM9I%$ PR(IT M>G9S40 ,= ?IS SECOND TYPE NO 
SOLUTION HAS YET BE5 F\ND1 = EXP]I5CE TEA*ES ?AT GOV]NM5T-IMPOS$ 
WAGE & PRICE CONTROLS HAVE ONLY %ORT-T]M EFFECTS4 

,S9CE ! CAPITALI/ CRISIS WAS SUPPOS$LY CAUS$ BY 9SUFFICI5T DEM&1 
:I* WAS MA/]$ EXACTLY BY MEANS ( ! 0TRIUMPHANT0 MONET>Y 
& FISCAL POLICY1 IT IS DIFFICULT TO UND]/& H[ ?IS TRIUMPH OV] CRISIS 
HAS ITSELF TURN$ 9TO AN 9FLATION>Y /ATE ( CRISIS ?AT IS MANIFE/+ 
ITSELF ONCE AGA9 9 GR[+ UNEMPLOYM5T4 ,TO SURM\NT ?IS NEW CRISIS 
SITUATION1 ACCORD+ TO ,SAMUELSON1 PR(ITS & WAGES MU/ BE DECREAS$1 :I* 
W\LD 9EVITABLY RESULT 9 AN 9SUFFICI5T DEM&1 :I* 9 TURN W\LD HAVE TO 
BE MA/]$ ANEW ) ! 0TRIUMPHANT MONET>Y & FISCAL 
POLICY40 

,SAMUELSON CONSID]S IT 0A TRUISM1 ?AT ! PRICE LEVEL MU/ RISE :5 
ALL ! FACTORS ( CO/ RISE MORE QUICKLY ?AN ! VOLUME ( PRODUCTION40 
,BUT :Y DOESN'T ! VOLUME ( PRODUCTION RISE8 ,BECAUSE 0WAGES RISE MORE 
QUICKLY ?AN ! AV]AGE PRODUCTIVITY ( LABOR10 ANSW]S ,SAMUELSON4 ,BUT 
:Y DOESN'T LABOR PRODUCTIVITY RISE FA/] ?AN WAGES8 ,S9CE ! RISE 9 
PRODUCTIVITY DEP5DS ON TE*NOLOGICAL DEVELOPM5T1 & ?IS DEP5DS ON CAPITAL 
ACCUMULATION1 IT MU/ BE BECAUSE CAPITAL IS NOT ACCUMULAT+ FA/ 5\<4 ,BUT 
:Y NOT1 :5 0! GIANT FIRMS MA9TA9 UNDIM9I%$ PR(IT M>G9S08 
,WELL1 WE JU/ DON'T KN[4 0,A GOOD SCI5TI/10 SAYS ,SAMUELSON1 
0MU/ BE ABLE TO ADMIT HIS IGNORANCE0'! IGNORANCE ?AT = ?IS GOOD 
SCI5TI/ L$ TO ! ,NOBEL ,PRIZE4 

,ANO!R ,NOBEL ,PRIZE W9N]1 ,K5NE? ,>R[1 OBS]V$ ) RESIGNATION 
?AT 

! RESOLUTION ( ANY PROBLEM ALWAYS CREATES A NEW PROBLEM4 
,FROM ! BEG9N+ ( ! ,KEYNESIAN ]A1 ! FE> HAS BE5 EXPRESS$ ?AT 
VIGOR\S FULL-EMPLOYM5T POLICIES WILL LEAD TO 9FLATION4 ,/&>D ECONOMIC 
!ORY HAS BE5 BUILT 9 L>GE MEASURE AB\T ! IDEA ( EQUILIBRIUM1 ?AT AN 
EXACT BALANC+ ( SUPPLY & DEM& ON ALL M>KETS1 9CLUD+ ! LABOR 
M>KET1 WILL LEAD TO /EADY PRICES1 :ILE AN EXCESS ( SUPPLY LEADS TO A 
D[NW>D PRESSURE4 ,?US1 UNEMPLOYM5T \<T TO LEAD TO WAGE DECL9ES2 !Y 
MANIFE/LY HAVE NOT DONE SO 9 REC5T YE>S4 ,! COEXI/5CE ( 9FLATION & 
UNEMPLOYM5T IS ?US AN 9TELLECTUAL RIDDLE & AN UNCOM=TABLE FACT4 

,UNTIL ?IS RIDDLE IS SOLV$1 TOGE!R ) ! ELIM9ATION ( ?IS 
UNCOM=TABLE FACT1 WE %\LD NEV]!LESS BE> 9 M9D ?AT 

! RATES ( 9FLATION ) :I* WE HAVE HAD TO CONT5D 
IMPOSE NO 9SUP]ABLE PROBLEM OR EV5 MAJOR DIFFICULTY TO ! OP]ATION ( ! 
ECONOMIC SY/EM1 NO?+ COMP>ABLE TO ! MAJOR DEPRESSIONS ( ! PA/4 
,9DIVIDUALS WILL LE>N & HAVE LE>N$ TO DEAL ) 9FLATION1 MAK+ !FT 
PLANS TO TAKE EXPECT$ 9FLATION 9TO ACC\NT4 

,! IGNORANCE ?AT ,SAMUELSON ADMITS & ,>R['S UNANSW]$ RIDDLE 
CANNOT BE DEALT ) ON ! BASIS ( B\RGEOIS ECONOMIC !ORY4 ,BUT ?IS !ORY 
CANNOT BE R5\NC$ )\T GIV+ UP AN IMPORTANT COMPON5T ( ! IDEOLOGY 
NECESS>Y TO CAPITALI/ SOCIETY4 ,H[EV]1 IT IS NOT ONLY ?AT ! 
0RIDDLE0 ( 9FLATION ) GR[+ UNEMPLOYM5T SPELLS ! 
BANKRUPTCY ( ! ,KEYNESIAN !ORY ( FULL EMPLOYM5T 9 ITS NEO-CLASSICAL 
V]SION2 9 VIEW ( PRES5T-DAY CONDITIONS1 ! :OLE CONCEPTUAL S*EME ( 
B\RGEOIS ECONOMICS HAS LO/ EV5 ?AT SEMBLANCE ( RELEVANCE TO REALITY 
REQUIR$ BY ITS IDEOLOGICAL FUNCTION4 ,EV5 MANY ECONOMIC IDEOLOGI/S HAVE COME 
TO F9D ! 5CUMBRANCE ( ! NEOCLASSICAL EQUILIBRIUM PRICE !ORY 
9SUPPORTABLE & HAVE ATTEMPT$ TO FREE !MSELVES FROM IT & TO DEVELOP 
!ORIES ?AT FLY LESS 9 ! FACE ( REAL ECONOMIC RELATIONS4 ,( C\RSE1 ! 
SO-CALL$ CRISIS ( ACADEMIC ECONOMICS IS NOT A G5]AL PH5OM5ON4 ,! 
MAJORITY ( ECONOMIC !ORI/S /ILL REMA9 UNDI/URB$ BY ! DIV]G5CE 
BETWE5 !ORY & REALITY4 ,?IS IS NOT TO BE WOND]$ AT1 S9CE ?IS 
PH5OM5ON CAN BE NOT$ 9 O!R IDEOLOGICAL >EAS ALSO3 !RE IS NO ,GOD BUT 
!RE >E MANY HUNDR$S ( ?\S&S ( !OLOGIANS4 

,= ANO!R GR\P ( !ORI/S ! 0SECOND CRISIS0 ( ECONOMICS 
/EMS NOT FROM ! RIDDLE ( ! FAILURE ( MONET>Y & FISCAL POLICY TO 
SU/A9 FULL EMPLOYM5T BUT FROM ! PROBLEM ( DI/RIBUTION1 LEFT UNEXAM9$ 
BY ! NEO-CLASSICAL ECONOMI/S4 ,ALONG ) NEO-,M>XI/S LIKE ,B>AN & ,SWEEZY1 
0LEFT0 ,KEYNESIANS ACCEPT$ ! PROPOSITION ?AT ,KEYNESIAN ME?ODS 
C\LD A*IEVE FULL EMPLOYM5T4 ,9 CONTRA/ TO ! NEO-,M>XI/S1 ! 
0LEFT0 ,KEYNESIANS DO NOT BELIEVE 9 ! NECESSITY ( WA/E 
PRODUCTION4 ,FULL EMPLOYM5T1 !Y BELIEVE1 CAN ALSO BE MA9TA9$ BY 9CREAS+ 
! CONSUMPTION ( ! POPULATION4 ,!ORETICALLY ! CONCEPT ( M>G9AL 
PRODUCTIVITY IS SE5 AS UNT5ABLE AS A BASIS = EXPLA9+ ! DI/RIBUTION ( 
9COME & AS NO MORE ?AN AN APOLOGIA = ! PREVAIL+ UNFAIR MODE ( 
DI/RIBUTION4 

,PRACTICALLY ! ,KEYNESIAN ME?ODS ( 9CREAS+ PRODUCTION BY /ATE 
9T]V5TION %\LD BE MAT*$ BY A POLITICALLY DET]M9$ DI/RIBUTION 
CO-ORD9AT$ ) IT4 ,BY CONC]N+ ITSELF ) PROBLEMS ( ! DI/RIBUTION ( 
! SOCIAL PRODUCT1 AS 9 ,RIC>DO'S ORIG9AL =MULATION ( ITS GOALS1 
ECONOMICS %\LD RETURN TO ITS ORIG9 9 POLITICAL ECONOMY4 

,?US1 :ILE ! CURR5T /ATE ( AFFAIRS PRES5TS ! REPRES5TATIVES ( ! 
0NEW ECONOMICS0 ) AN UNANSW]$ RIDDLE1 0LEFT0 
,KEYNESIANISM IS /ILL OCCUPI$ ) ! HYPO!SIS ( A CRISIS-FREE ECONOMY 9 
:I* ! ONLY PROBLEM IS H[ ! B5EFITS ( /EADILY 9CREAS+ PRODUCTION 
>E TO BE %>$ AMONG ! :OLE SOCIETY4 ,?IS W\LD REQUIRE NOT ONLY A 
DIFF]5T PR9CIPLE ( DI/RIBUTION ?AN ! EXI/+ ONE BUT ALSO A DIFF]5T 
DIVISION ( SOCIAL LABOR1 TRANSF]R+ RES\RCES FROM WA/E PRODUCTION TO 
PRODUCTION = PRIVATE CONSUMPTION4 ,S9CE ?IS W\LD REQUIRE ! DIRECT 
COMPETITION ( /ATE-9DUC$ PRODUCTION ) PRODUCTION = PRIVATE ACC\NT1 
:I* W\LD ONLY LEAD TO ! FUR!R SUBORD9ATION ( ! PRIVATE SECTOR ( ! 
ECONOMY TO ! /ATE SECTOR1 ?IS PROGRAM C\LD BE C>RI$ \T ONLY ?R\< A 
/RUGGLE AGA9/ PRIVATE CAPITALISM4 ,& 9 FACT 0LEFT0 
,KEYNESIANISM 9CL9ES T[>D /ATE-CAPITALISM-& 9 ?IS S5SE CONV]GES ) 
NEO-,M>XISM1 )\T !REBY LOS+ ITS LACK ( RELATION TO REALITY4 

,! /ILL UNSOLV$ 0RIDDLE0 ( ECONOMIC /AGNATION ) GR[+ 
UNEMPLOYM5T & AN 9CREAS+ RATE ( 9FLATION1 GIV5 A NAME ) ! CONCEPT 
( 0/AGFLATION10 IS 9 FACT NO RIDDLE BUT A PH5OM5ON KN[N = A 
LONG TIME & PUT TO USE 9 ! DRIVE = HI<] PR(ITS UND] CONDITIONS 
UNFAVORABLE = ! PRODUCTION ( SURPLUS VALUE4 ,MASS UNEMPLOYM5T ACCOMPANI$ 
! 0CLASSIC0 ,G]MAN 9FLATION AFT] ! ,FIR/ ,WORLD ,W>4 ,TODAY IT 
ACCOMPANIES ! =C$ ACCUMULATION 9 ! CAPITAL-POOR C\NTRIES4 ,! CREEP+ 
9FLATION ?AT IS A CON/ANT FEATURE 9 ! CAPITALI/ICALLY DEVELOP$ 
C\NTRIES ALSO 9DICATES A LEVEL ( PR(ITABILITY TOO L[ = ! ACCUMULATION 
REQUIREM5TS ( CAPITAL1 :I* IS C]TA9LY MASK$1 BUT NOT OV]COME1 BY ! 
9CREASE 9 PRODUCTION4 ,9FLATION IS NOT A NATURAL PH5OM5ON BUT ! RESULT ( 
MONET>Y & FISCAL POLICIES ?AT C\LD ALSO BE DISCONT9U$4 ,IF A GOV]NM5T 
IS UNWILL+ TO AB&ON ! 9FLATION>Y C\RSE1 IT IS BECAUSE ( ANXIETY AB\T 
! RESULT+ ECONOMIC /AGNATION1 = ?IS W\LD BE AS 9JURI\S TO IT AS TO 
CAPITAL ITSELF S9CE EV]Y DEFLATION>Y MEASURE1 EV]Y ECONOMIC D[NTURN ALSO 
DECREASES ! %>E ( SURPLUS VALUE GO+ TO ! GOV]NM5T4 

,IT IS IMPOSSIBLE TO E/ABLI% EMPIRICALLY EI!R ! ACCUMULATION 
REQUIREM5TS ( CAPITAL OR1 !RE=E1 ! MASS ( SURPLUS VALUE ?AT W\LD 
SATISFY !M4 ,?AT ! RELATION BETWE5 ! TWO IS NOT 09 ORD]0 
IS ONLY 9DICAT$ 9DIRECTLY ?R\< EV5TS 9 ! M>KET4 ,:E!R ! 
/ATE'S 9T]V5TIONS ?R\< MONEY & FISCAL POLICY >E ABLE TO RE/ORE 
! NECESS>Y RELATION%IP BETWE5 PR(IT & ACCUMULATION CAN LIKEWISE BE 
DISCOV]$ ONLY 9 FUR!R M>KET EV5TS4 ,?US ! /ATE CAN ONLY REACT BL9DLY 
TO UNCOMPREH5D$ ECONOMIC FLUCTUATIONS 9 ITS ATTEMPT BO? TO /IMULATE ! 
ECONOMY & TO SECURE ! PR(ITABILITY ( CAPITAL & ITS ACCUMULATION4 ,BUT 
! FIR/ ( !SE CONTRADICTS ! SECOND1 AL?\< ( C\RSE ?IS1 TOO1 
BECOMES APP>5T ONLY LAT]1 9 ! M>KET1 ?R\< ! COMB9ATION ( 
9FLATION ) GR[+ UNEMPLOYM5T4 

,IF ! 9FLATION>Y MONET>Y & CR$IT POLICY IS A MEANS TO 9CREASE 
PRODUCTION1 !N ! NEWLY >IS+ UNEMPLOYM5T %\LD 9 TURN DISAPPE> ) 
! ACCEL]ATION ( 9FLATION4 ,BUT ! !ORETICIANS ( 9FLATION !MSELVES 
%R9K BE=E ?IS CONSI/5T APPLICATION ( !IR !ORY1 :I* W\LD LEAD 
FROM CREEP+ TO GALLOP+ 9FLATION4 ,! DEFICIT F9ANC+ ( PUBLIC 
EXP5DITURES & ! 9FLATION>Y MONET>Y & CR$IT POLICY \<T1 !Y SAY1 
NOT BE PU%$ TOO F>1 = ?IS W\LD CALL ! FUTURE EXI/5CE ( ! SY/EM 
ITSELF 9TO QUE/ION4 ,?IS CONFESSION IS ( C\RSE ALSO AN ADMISSION ?AT 
CREEP+ 9FLATION CAN BE USEFUL TO CAPITAL ONLY 9S(> AS IT FO/]S AN 
9CREASE 9 PR(IT AT ! EXP5SE ( SOCIETY AS A :OLE4 ,BUT HIS DOES NOT MEAN 
?AT ! 9CREASE 9 PR(IT MAKES POSSIBLE A RATE ( ACCUMULATION ?AT C\LD BE 
DESCRIB$ AS CAPITALI/ PROSP]ITY4 ,! APPE>ANCE ( GR[+ UNEMPLOYM5T ) 
CREEP+ 9FLATION REVEALS ?AT PR(ITS CANNOT BE SUFFICI5TLY 9CREAS$ BY 
MEANS ( 9FLATION TO HEAD (F ! 9CIPI5T /AGNATION4 

,9FLATION IS A WORLD-WIDE PH5OM5ON4 ,?IS 9DICATES NOT ONLY ! MUTUAL 
9T]DEP5D5CIES & ! COMPLEXITY ?AT *>ACT]IZE ! GLOBAL ECONOMY BUT 
ALSO ! %>P5+ G5]AL COMPETITION1 :I* IS ALSO WAG$ ) ! WEAPONS 
( CURR5CY POLICY4 ,! HUNG] = PR(IT IS UNIV]SAL1 & ! LONG+ = 
ADDITIONAL CAPITAL CAN F9D NO SATISFACTION 9 A WORLD 9 :I* EV] GREAT] 
CAPITAL MASSES OPPOSE EA* O!R COMPETITIVELY & MU/ ALWAYS CONT9UE TO 
GR[1 NOT ONLY TO BE ABLE TO HOLD !IR [N BUT ALSO TO ESCAPE ! ECONOMIC 
/AGNATION ?AT W\LD O!RWISE SET 94 ,IT IS )\T A D\BT TRUE ?AT 
MONOPOLY PR(IT CAN BE MA9TA9$ & 9DE$ 9CREAS$ EV5 UND] ! 
CONDITIONS ( /AGNATION1 BUT ONLY AT ! CO/ ( AGGRAVAT$ /AGNATION & AN 
IRRESI/IBLE DECL9E 9 ! ECONOMY ,FROM ?IS >ISES ! NE$ = FUR!R /ATE 
9T]V5TIONS1 :I* ( !MSELVES CONTRIBUTE TO ! DIS9TEGRATION ( ! 
SY/EM4 ,?US ! FUTURE ( CAPITAL /ILL DEP5DS UPON ACCUMULATION1 EV5 IF 
ACCUMULATION PROMISES IT NO FUTURE4 

,JU/ AS ! LONG YE>S ( PROSP]ITY DID NOT AFFECT ALL CAPITALI/ C\NTRIES 
EQUALLY1 ! ONSET ( CRISIS HAS DIFF]5T EFFECTS 9 DIFF]5T C\NTRIES4 ,BUT 
EV]Y:]E ! *ANGE FROM PROSP]ITY TO /AGNATION IS ALREADY VISIBLE1 & TO 
! FE> ( FUR!R 9FLATION IS JO9$ ! FE> ( A NEW CRISIS4 ,:E!R ! 
SPREAD+ CRISIS CAN ONCE AGA9 BE HALT$ BY /ATE 9T]V5TIONS1 :I* WILL 
COMBAT TODAY'S DIFFICULTIES AT ! CO/ ( CAPITAL'S LIFE 
EXPECTANCY1 CANNOT BE !ORETICALLY DET]M9$4 ,)\T A D\BT IT WILL BE 
ATTEMPT$1 BUT ! RESULT MAY V]Y WELL LEAD TO NO MORE ?AN ! TEMPOR>Y 
CONSOLIDATION ( ! GIV5 PREC>I\S CIRCUM/ANCES-& ) ?IS TO A 
PROLONG$ DECAY ( ! CAPITALI/ SY/EM4 ,SOON] OR LAT] WE WILL DAILY F9D 
BE=E \R EYES ! EMPIRICAL CONFIRMATION ,M>X'S !ORY ( ACCUMULATION3 
CAPITALISM'S SUSCEPTIBILITY TO CRISIS & DECAY4 

,FROM 3 ,M>XI/S4ORG4 

,*RONOLOGY 3 
,M>* #c1 #bba 3 ,*APT] #d -- ,ADD$4 

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