19

p The present volume of government activity in the economic sphere of capitalism bears no comparison to the situation which prevailed some 30-40 years ago. The significance, however, lies not only in the degree and scale of government interference but in the essence of this process. In principle the element of state coercion can be traced at all stages of capitalist development. In the era of the dominance of free competition, in conditions of the atomistic economic structure, the interference of the state was not only reduced to a minimum but was also of an auxiliary, “external” nature with regard to the “basic” economic process. The functions of government agencies were limited to maintenance of the general conditions of “aw and order" and the protection of capitalist property.

p Today in the period of the dominance of large industrial corporations which monopolise the production and marketing of major goods and services, the state directly interferes in the reproduction process and tries to exert a purposeful influence on it. A big corporation requires for its normal functioning stable economic activity, stable prices, guaranteed markets, i.e., conditions incompatible with the spontaneous, uncontrolled market mechanism.  [19•1  David T. Bazelon, an American economist, rightly remarks that modern gigantic capitalist enterprises would perish without such federal governmental activities as taxation, expenditures, grants, guarantees, organisation, aid, regulation and the ensuring of a proper level of the national income.  [19•2 

20

p Today a capitalist state not only openly proclaims its responsibility for eliminating the strongest cyclical fluctuations of economic activity. It sets itself the aim of guiding long-term trends, seeks to influence the historically shaped rates of economic growth and national economic proportions, create conditions for the acceleration of scientific and technological progress, plan programmes of “social services”, and so on. The state is firmly “built into" the system of economic relations and a sudden stoppage of its activity would most seriously derange the entire capitalist economy.

p The increased role of the state in the economic life of capitalist countries is an objective and irreversible process. It takes place in all highly developed capitalist countries, although it develops, as we pointed out, at different tempos and in different forms. The opinion is at times voiced that the degree of intervention by the state is determined by conscious factors: the expression of the will of the masses, collective opinion about the “permissible level" of the development of the public sector. Naturally, historical conditions and traditions, local distinctions, and so on, play a certain part, are superimposed on the general tendency. But the roots of the process of the augmentation of the power and influence of the state should be sought in the objective laws of capitalism’s development, in the chronic instability of an uncontrollable economy and in the desire of the capitalist elite to utilise the state machine for consolidating its power. Explanation of the phenomenon of “state capitalism" in Western literature is usually reduced to demonstrating the limited nature of the market mechanism, its inability to ensure the efficient functioning of the system and to solve important problems of social development. Indeed, such a limited nature is inherent in the capitalist market. But to reduce to it the entire problem of present-day state intervention means to ignore the chief thing. State-monopoly capitalism is the stage of highly developed capitalism which is characterised by the emergence of close and diverse ties between the big corporations and the state. This alliance ultimately aims at protecting the interests of the ruling class. Not to consider this primary factor, to reduce the role of the state to the position of a “neutral and unbiased arbiter" guided by the interests of all sections of society would mean to bar 21 the road to an objective study of the nature and phenomena of contemporary capitalism.

p At the same time an analysis of different manifestations of the inefficiency of the market mechanism, made by Western researchers, is by itself of undoubted interest. These phenomena speak of the transitory nature of capitalism, the inevitability of transition to another economic system based on social ownership of the means of production and managed in a planned way. These principles of organisation of the economy are more adequate to the high level of development of the productive forces.

p The tendency towards extension of public operation is most distinctly displayed in spheres of the economy where private capitalist enterprise cannot or does not consider it profitable for itself to produce definite types of goods and services and to perform functions of vital importance for society. The development of the economic infrastructure, the educational system, a wide range of “public services" (public health, pension system), the financing of long-range projects, the organisation of fundamental scientific research —such is the most general and by far not complete enumeration of spheres in which the state tries to fill the “vacuum” created by private business. Here we have a clear example illustrating the point: the aims and interests of social development come into contradiction with the chief criterion of capitalist enterprise—the principle of profit maximisation. The public sector of the economy serves as a kind of “ safety-valve" which makes it possible, within certain bounds and for a certain time, to resolve emerging contradictions, to smooth over conflicts, to ensure society a minimum of major services for satisfying collective needs.

p There are many facts demonstrating the inability of the market economy to ensure an adequate volume of production of goods and services of importance from the national economic viewpoint. Equally, the purely market form of economic organisation contains no regulators restricting the development of such types of productive activity which, although they bring a profit to the individual producers, directly or indirectly inflict harm on society. These features in the functioning of the market mechanism are specifically reflected in the problem of external or spillover effects. 22 There are many spheres of economic activity which, aside from the direct results paid for by the consumer, exert an indirect influence of a positive or negative nature. The person receiving the indirect benefit of this influence makes no payment to the producer for this service. On the other hand neither is the consumer compensated for by those guilty of inflicting harm upon him.

p It is known, for example, that education, besides affording direct benefit to the student, is of use to entire society. But this effect of education is not considered in the payment for tuition, and the scale of this sort of activity ensured by the private sector is obviously inadequate.  [22•1 

p Here is another example. Many types of industrial production are linked with the pollution of the environment. But this effect, adverse from the viewpoint of society, is not reflected in the production costs. The state is urged to help increase the volume of services of the first type and reduce activity of the second type. Guided by considerations of the “public good”, the state should stimulate education and introduce various types of free tuition, in other words, reduce the total cost of education; and it should restrict the activities of companies which pollute the air with production wastes through a system of fines, and so on (i.e., by increasing production costs).

p Robert Dorfman, a well-known American economist, points to the existence of a large gap between the public interests and the criteria of private capitalist enterprises. He points out that there is a growing number of enterprises which are justified from the public viewpoint, but are regarded by businessmen as unprofitable. At times they do not bring in a profit because of the conditions under which the product is distributed or consumed (for example, “collective” goods, conveniences and services available to all comers), or because their payment is too burdensome or unjustified (street patrolling service); at times owing to production conditions (only the government can buy lands needed for the building 23 of highways or the reconstruction of cities); at times owing to the fact that the market undervalues some things which in the long-range aspect are highly valued by society (for example, preservation of natural wealth.)  [23•1 

p What are the most general illustrations of the inefficiency of the market mechanism? A logical scheme, presented with various modifications in many Western textbooks, is given in the book, Government Finance. An Economic Analysis by John Due.  [23•2  Due formulates a number of general conditions, the existence of which he regards as of exceptional importance for the proper functioning of the capitalist economy and the absence of which makes government intervention necessary. Among them are: “1. Maximum individual freedom of choice; 2. optimum standards of living, in terms of available resources and consumer and factor-owner preference; 3. distribution of income in conformity with currently accepted standards of equity."  [23•3  In real life, according to Due, these purposes are seriously distorted as a result of adverse influences arising in the course of market decisionmaking. Thus, the tendency to monopolise resources, capital markets, and so on, distinctly displayed in the course of the development of capitalism, reduces to naught the “ individual freedom of choice”. The optimum standard of living (under which Due implies the most efficient use of the available resources of society from the viewpoint of the public good) cannot be achieved because of the operation of such elements as restriction of competition in the markets of consumer goods and factors of production; capitalism’s inherent hindrances to achieving full employment of manpower and productive resources; the gap between marginal benefits and costs as regards private individuals and society as a whole (the problem of external effects earlier mentioned).

p As for the third important condition, more equitable distribution of income, Due confines himself to the following cautious statement: “The market economy, even with 24 relatively free competition, has resulted in a pattern of income distribution among families, which opinion in society has typically regarded as inequitable, because of the high degree of inequality. The degree of inequality has been increased still more by the development of monopoly power."  [24•1 

p Due’s laconic manner of speaking about the third condition is understandable. The uneven distribution of incomes is an eternal and the most acute problem of capitalism, the source of social conflict and class struggle. But the method of distribution is determined by the entire system of capitalism’s production relations and can be changed only through transition to another, higher socio-economic formation. Palliative measures of the state in this sphere merely emphasise the pressing need for a cardinal solution of the problem.

p An economic analysis of state intervention, as a rule, is not limited to a description of government activity or an explanation of the reasons for the growth of the public sector. One of the trends of study is an attempt to ascertain the “optimum boundaries" of this sector, utilising for this purpose an apparatus of highly abstract models. The latter, as a rule, are divorced from the real conditions of the political process which determines the volume and composition of the government expenditure. It is a matter not of observing developments in real life but of what ought to happen given certain assumed conditions for the functioning of the system.

p This problem is studied by a special branch of economic analysis—welfare economics. With its help a technique is being devised for evaluating alternative situations from the viewpoint of satisfying to the maximum individual needs within the limits of the examined collective or group. The proponents of such an approach are trying to employ the techniques of marginal evaluations elaborated in microeconomic analysis for weighing the public benefits and costs linked with government operations.  [24•2  But a study of government activity on the basis of market economy criteria is 25 exceedingly difficult. The point is that many types of government services do not have a “price” determined by market forces (for example, judiciary functions, defence, and so on). The absence of objectively formed evaluations essentially hampers (and in a number of cases completely excludes) the measurement and comparison of costs and effects. At the same time the existence of a considerable external effect in many services of the public sector creates a gap between the marginal evaluations from the viewpoint of the individual and society as a whole. This again complicates the application of the principles of marginal analysis to the study of government operations. For all the attractiveness of a study of the optimum limits of state activity, which is “strict” from the viewpoint of “pure theory”, the apparatus of welfare economics, in the opinion of many theoreticians, is poorly suited for the study of concrete processes and situations. Let us refer in this connection to a statement made by Jan Tinbergen, an eminent economist: “The problem of finding the optimum regime is the central problem of welfare economics. ... This means that we assume knowledge about two things: first, about the preferences of the individuals constituting the economy and, second, about how to weigh the interests of different individuals in determining social wellbeing or social welfare. In customary economic language this means, first, knowledge about the utility functions of the individuals and, second, about the social utility function. These are far-reaching assumptions because our knowledge about individual utility functions is very limited, and the social welfare function depends on how we compare utilities of different persons."  [25•1 

p A zealous custodian of the traditions of free enterprise Eugene Rostow writes: “It [the problem of planning.—The Author] is inescapable because a capitalist economy doesn’t keep itself at high levels of employment, nor can it accomplish unaided certain other economic goals of the community. And there are no institutions, apart from those of government, to carry out the essential preliminary function of planning—that of seeing to it that the aggregate 26 of all spendings in the economy is high enough to ensure full employment, and not so high as to produce inflation."  [26•1 

p The term “planning” is employed by Western authors in the most diverse interpretations and aspects. It encompasses a motley range of concepts—from indicative planning of the French type to imperative or directive planning, from the compilation of the most general—long-range forecasts to projects and programmes elaborated in detail.  [26•2  At the same time, in evaluating planning methods, it is considered “the proper thing" to regard with disapproval the system of planning existing in socialist countries, putting up in contrast to it “capitalist planning”, “liberal planning" and even “planning for freedom".  [26•3 

p Terminology by itself hardly improves the forms and methods of planning. It seems, however, that planning, by its very nature as an instrument of co-ordinating different economic elements and subordinating them to a single social goal, must be of an all-round and binding nature and must not be confined to general evaluations and recommendations which are not binding on anyone.

p We find a more pragmatic approach to the problem of the limits and intensity of state intervention among followers of the Keynesian theoretical scheme. Keynes formulated a number of causal and functional links between key macroeconomic factors (consumer spending, savings, investments, the interest rate, money, and so on) and tried to develop them into a single system. In current variants of the Keynesian scheme government spending and taxes perform the role of “adjusting elements" which rectify discrepancies in the dynamics of the major national economic variable—the aggregate demand for goods and services presented by the private sector of the economy. The shortage of private demand (and Keynes-proceeded from the premise that the shortage 27 of demand is inherent in the economy of mature capitalism) requires additional government investments financed by the selling of public securities.The excess of demand beyond the level dictated by the available resources of society must be accompanied by government measures for curtailing demand (through an increase of taxes, and so on).

Hence the tremendous significance attached in the West to measures of government fiscal policy as an instrument of economic stabilisation and control. In its simplest form the general ways of influencing the economy with the help of budget instruments can be demonstrated in the following model:

C = C 4 cY_d 0<c<l 0<x<l (1) (2) (3) (4) (5) (6) where C is consumption expenditure by households; c is marginal propensity to consume; Y is the gross national product; Yd: is disposable income (i.e., disposable income after taxes); T is total tax collections from households, x is marginal propensity to pay taxes under the existing tax structure; I is investment expenditure by firms and G is government purchases of goods and services. Index “o” denotes the initial level of the variable introduced into the model from the outside. From the given system of equations there directly follows: ——-^—(7) AG I—C(I—X) \’> A To 1 - C (1 - X) W

p Equation (7) gives the multiplier applicable to government purchases and equation (8)—the multiplier for a change in taxes. In the first case the formula shows how the GNP changes with the change in government spending; here the multiplier is positive and equals, let us assume, 3. This 28 means that a change in the government purchases of goods and services by $1,000 million ultimately leads, through the given chain of dependence and effects, to an increase of the GNP by $3,000 million. In the second case the multiplier is negative (let us say minus 1.8); an increase in tax receipts by $1,000 million will bring about a reduction of the GNP by $1,800 million.

p Government policy in various economic situations is based on these propositions: in conditions of a depression it is advised to increase budget spending and reduce taxes so as to bring about a growth in effective demand; on the other hand, in conditions of an inflationary boom it is advised to reduce demand by curtailing government spending and raising taxes.

p But even quite incomplete, selective and poorly co- ordinated measures of centralised regulation of economic activity have been arousing vociferous protests of the defenders of free enterprise. The general point in their works is the thesis concerning the need to restrict state action within narrow and strictly delineated bounds.

p Contemporary capitalist economy is conceived as some kind of a “private-collectivist” system in which elements of centralised guidance should be administered in “doses” and combined in definite proportions with private decisions on questions of production and consumption. A bitter polemic is being waged over the “best” combination of these two opposite elements—centralised regulation of the economy and the spontaneous functioning of the market. Most economists are of the opinion that in the absence of sizable and systematic governmental actions modern capitalist economy would be subjected to disastrous fluctuations of economic activity. At the same time there is a large group of economists and political leaders in the United States who characterise the process of increasing the role of the state and growth of the public sector and the budget as “creeping socialism" which endangers the “freedom” and the very existence of American society. The arguments of this group usually boil down to an apology for the “classical” forms of capitalist activity, the apologists claim that capitalism is a “basically sound”, “stable” system in which the operation of internal self-regulating mechanisms is effective and charge 29 that deep disproportions arise precisely as a result of “excessive” intervention of the state in the reproduction process.  [29•1 

p A vast area of intermediate, at times eclectical and contradictory views lies between these polar positions. Moreover, there are periodic changes in the relationship of forces between the supporters of, and opponents to, energetic government action, largely determined by changes in economic situation. A decrease of output, increase of labour unemployment, rise of underemployment of productive capacities and other symptoms of a depressed condition of the economy are usually accompanied by a drive in favour of extending state intervention. Conversely, in periods of accelerated economic growth, widespread opposition is expressed against any increase in government spending and more people voice the opinion that it is necessary “to slow down the growth" and “to balance the economy".

p These tendencies were clearly revealed in the USA in recent years when the Republican Party came into office. The Nixon Administration put forward as its paramount aim the slowing down of economic growth in order to restore the economic proportions distorted during the preceding years. Inflation became the main target of government economic activity. The Administration proposed: a reduction in the scale of government stimulating measures, limitation of the budget deficit, stepping up the use of traditional tools of monetary policy and the “balancing” of growth by curtailing excessive demand.

p But the hope placed in the self-regulating mechanism underlying the government’s policy was not justified. The sharp worsening of major indicators of production and employment early in 1970 forced the Administration hastily to revise its entire economic programme. This was also spurred on by criticism of the Republican Party leadership by advocates 30 of “activism” and energetic interference in the economy. The Government had to launch large-scale stimulating budget measures which, in turn, resulted in a huge unplanned budget deficit in the 1971 fiscal year and largely reduced to naught the effect of former restrictions designed to curb inflation. As a result, the first postwar attempt to reduce the scale of state stimulation of the economy actually ended in failure.

p Thus far we discussed the reasons for the origin and development of a large public sector and the economic policy of the state as an instrument of rectifying the defects of the market mechanism. To what extent do governmental actions “correct” the course of social development and improve the “general welfare"? An answer to this question is given in subsequent chapters of this book. But already at this point it is possible to draw some general conclusions. The chief conclusion is that despite increased government activity, despite the greater use of methods and forms of regulation and control in the economic sphere, the state cannot alter the nature of capitalism which daily, hourly reproduces all disproportions in production and distribution which the state is trying to eliminate or mitigate.

p Numerous facts reveal that in the richest capitalist country in the world with its powerful productive capacities and enormous redistribution of incomes conducted through government budget channels, obvious social contrasts, material and political inequality, far from being abolished, on the contrary, tend to grow sharper in the course of economic development.

p The system of socio-economic priorities operating in the United States does not ensure the satisfaction of many urgent needs of society. In the short-term aspect it is the prime task of government economic policy to ensure stability of economic growth and maximum employment. At the same time it is gradually becoming clearer that an increase of national output and a rise in the level of money incomes do not automatically lead to a solution of the problem of social inequality and other pressing problems of capitalism. The changing composition of social needs has no adequate mechanism for their satisfaction.

p Edward S. Mason, Professor of Harvard University and well-known American economist, in his analysis of the 31 features of a “mature society" (he places contemporary American capitalism in this category)  [31•1  points out that recent experience shows how much easier it is to regulate the world of things than to effect even moderate shifts in the way of life of people and civilisations.

p In Mason’s opinion only some chronic disproportions inherent in the American economy can be eliminated “ automatically" if full employment is maintained over a sufficiently large period. These are: the “farm problem" revealed in the relative overproduction of agricultural commodities and the systematic decline in the incomes of farmers; the problem of distressed areas, i.e., entire geographical areas suffering from chronic mass unemployment and low level of production; and, lastly, questions connected with industrial automation and better technology. The latter creates a real threat of “structural unemployment" which cannot be eliminated by the simple “creation” of an additional demand for goods. Mason admits the acuteness and complexity of these problems but considers that the process of economic growth will ultimately eliminate them.

p This confidence can hardly be shared. The solution of the long-standing “farm problem”, the elimination of “distressed areas”, eradication of the causes of “structural unemployment"—all these require a broad comprehensive programme of socio-economic changes connected with shifting of resources and populations among regions and sectors, a planned change in the pattern and volume of production, regulation of economic proportions, and so on. Neither the market nor the capitalist state can undertake the implementation of such programmes on a sufficiently wide scale. Only the socialist system where production is organised in a planned way on a nation-wide scale can cope with such programmes.

p Skirting round the serious problems related to inflation and balance of payments, Mason turns his attention to another group of questions which, as he admits, cannot be 32 solved by a mere expansion of production. Among them are:

p 1) the change in the proportions between urban and rural populations;

p 2) the change in the age distribution of the population;

p 3) shifts in the pattern of consumer demand as per capita incomes rise.

p The first point leads to one of the most acute problems of present-day America—the city crisis. According to census statistics, 63 per cent of the entire population in 1960 lived in metropolitan areas. Thus, not only has the rural population moved to the cities but the urban population has shifted from small communities to the very large cities. Not less than 20 million people will be concentrated within the New York metropolitan area in 1985.  [32•1  “... Close to three-quarters of our people are destined to live in metropolitan areas and over a third in metropolises of more than a million, affected by what happens to our cities. And American cities, to speak bluntly but truthfully, are a mess."  [32•2 

p The second question raised by Mason is also quite urgent. It is a matter of the “ageing population”, i.e., a comparative increase of percentage of the population in the age of 65 or older. This requires the development of pension and medical care systems which, according to the admission of specialists, are at present in an entirely unsatisfactory condition. And again the question is linked with the need to redistribute the financial resources on a nation-wide scale.

p Lastly, there is the third question, concerning a change in the structure of wants. This, in turn, is reflected in a greater demand for some types of services and the stepped-up development of a number of sectors. The conglomerate sector called “service industries" in the United States (and statistics include in it a very wide range of economic activities) exceeds the similar sector in any other capitalist country. More than 50 per cent of the entire labour force is employed here 33 and there is a tendency for a further rise of employment in this sphere. Moreover the demand grows particularly quickly in such areas as education, medical care and the recreation industry.

p The more far-sighted economists, sociologists and political leaders are deeply concerned over this situation and are urging the government to take determined measures to increase spending for social needs. Of interest in this respect is the concept of “social balance" advanced by John Kenneth Galbraith in his book The Affluent Society which gained wide renown in the United States and other countries. Galbraith considers that one of the chief factors contributing to the disproportionate development of capitalism lies in the upsetting of the balance between the so-called “public goods" provided by the state outside the market for satisfying collective and individual needs of society’s members and “ privately produced goods" distributed through the market. Galbraith notes that in contemporary capitalist society there is a serious shortage of goods of the first kind and an excess of goods of the second group. He cites in his book numerous and quite impressive examples of the “crisis” of the supply of public goods: the overcrowded and decrepit school buildings, antisanitary conditions of city streets, inadequate medical service, pollution of the environment, and so on. “Failure to keep public services in minimal relation to private production and use of goods is a cause of social disorder or impairs economic performance,"  [33•1  Galbraith writes.

p He cites as one of the reasons for this imbalance, the psychology of the man in the street who succumbs to the stultifying influence of modern advertising and buys vast quantities of goods he often does not really need but at the same time completely ignores urgent social requirements. That is why Galbraith advocates a further increase in taxes, and greater redistribution of incomes through the state budget for satisfying public needs.

p This recommendation is hardly feasible in conditions when the tax burden reaches a very high level and the further increase in tax rates will merely produce a negative effect on 34 the living standard of the poorest strata. Yet Galbraith’s work indicates another, more realistic way of eliminating the catastrophic deficiency in public services—a change in the structure of government spending, a reduction of the military expenditure which absorbs a great part of federal appropriations.  [34•1 

p The “social balance" theory reflects the real contradictions of capitalist development but in a distorted, irrational way. The stresses have been shifted and the real causes remain undiscovered. The chief conflict lies not in the sphere of “ relations of things" (this is merely the outward display of the disproportion) and not in the wrong psychology of the consumer. A powerful sector has arisen in the United States which ex-President Eisenhower very aptly named the military-industrial complex, for which the maintenance of military appropriations at a stable high level is of vital importance. Robert Haveman points to the pressure brought to bear on the budget by the interconnected aggregate of military men and political representatives of regions with large military bases, war industry corporations and also scientists and analysts working on military projects and the development of new types of weapons. Every member of this interconnected aggregate, often named the military-industrial complex, according to Haveman, thinks that an increase in military spending is in his personal interests.  [34•2 

p Thus, the US government budget is far removed from the idyllic picture portrayed which presents it as a mirror-like reflection of the “collective expression of will" of American citizens. Its structure, and the priorities given to particular programmes are determined in accordance with the desires of powerful “pressure groups" which at times gain great influence. The widely advertised projects for improving the distribution of incomes by creating a “welfare state" 35 which spends a substantial part of the budget revenue for satisfying the needs of the poorest groups of the population as a rule, fail to achieve a set objective. In princple “the welfare state" is in duty bound to maintain a “minimum standard" of income, health and education of the population and to rectify by its actions the most glaring disproportions in these spheres. Occasionally, the functions of “the welfare state" are more widely interpreted and they include general regulation of economic activity.  [35•1 

p Opposition to increasing government spending for social needs is very strong in certain political circles of the United States. As will be subsequently shown, these expenses are usually the first to be cut as soon as the need arises to increase the military, foreign aid and other related expenditures which in present-day conditions have unchallenged priority over everything else. Nor is it accidental that for many years spending for social needs in relation to total budget expenditures as well as to national income has been considerably lower in the United States than in other developed capitalist countries.’  [35•2 

p The characterisation given by the American economist, Harold L. Wilensky, is quite apt: “Ours is a reluctant welfare state."  [35•3  Such a situation cannot be regarded as accidental. The public sector “built into" the capitalist economy is subordinated to the general laws of this socio-economic formation. In the “private”-“collective” policy mix, private interests dominate. Moreover, social groups possessing wealth and power are exerting a great influence on the real political process which ultimately determines the economic measures of government agencies.

p The inability of the capitalist state to solve urgent problems of economic and social development are sharply criticised by various sections of American society. Professor Martin Bronfenbrenner, chairman of the Department of Economics of the Carnegie-Mellon University, sums up the views of radically-minded circles in the US concerning the 36 capitalist system. He points to the equal distribution of income, wealth, and power within individual countries. In many countries too many resources are allocated to private goods consumed by the upper and middle classes, and to military goods, too little to public goods and services, used by the poor as routes to equalisation of income and wealths. Another aspect of misallocation is the ignoring of the set of social costs (externalities) involved in the term ’quality of life’—pollution, alienation, over-population, and resources exhaustion. He also mentions failure either to eliminate or greatly mollify racial discrimination.  [36•1 

As we see, all this is linked to one degree or another with the budget, its structure, the dynamics of its main items and government fiscal policy. These specific “financial” questions which represent a definite aspect of the more general problems of development of capitalism are examined in subsequent sections of the book.