Theory of Mixed Economy, a bourgeoisreformist conception according to which the modern capitalist economy has ceased to be a system of private enterprise as a result of the economic activity of the state, and has now become a combination of complementary private and public sectors. According to the proponents of this theory, the public sector has lost its capitalist nature and has socialist features. The purpose of this conception is to prove the viability of the capitalist economy and, as a consequence, to show that there is no necessity for the revolutionary transition to the communist mode of production. The conception appeared in the second half of the 19th century in opposition to the revolutionary Marxist theory of the inevitable collapse of capitalism. The German bourgeois economist Adolf von Wagner is the founder of this conception. The most complete exposition of this theory was provided in the 1920s by the German bourgeois economist Werner Sombart, who set forth the theory of social pluralism, according to which society develops not through change of economic systems (e. g., capitalism giving way to socialism), but rather through coexistence of systems, with each newlyemerging system joining the foregoing one, rather than superseding it. In this way he sought to prove the right of capitalism to extended coexistence with socialism. The rise of state-monopoly capitalism produced some varieties of the mixed economy theory reflecting the real situation in the capitalist economy, including the active intervention of the bourgeois state in economic life. American economists Stuart Chase. Alvin H. Hansen, John Clark and Paul Samuelson say that both private and public sectors exist within the modern capitalist economy and that the public sector is opposed to private enterprise because it allegedly has lost its capitalist nature. They insist that control of the economy is exercised by both state and private institutions with the sole purpose of increasing people’s welfare. In their opinion, there has been a revolution in the functions of a bourgeois state in the 20th century, and as a result, state economic and social measures can eliminate any contradictory developments and ensure crisis-free progress, and stable and high growth rates. A reformist variant of the theory (see Theories of Transformation of Capitalism) has been developed by British right-wing labour ideologists (A. Crosland, J.Strachey). American economist R. Solow provides the latest version. He constructs a four-sector model of the economy of the USA, which is described as a harmonious combination of different types of economy and forms of economic organisation, where the role of the state is seen as the determining factor. The principal methodological failure of the theory of mixed economy is its formal-legal approach to the realities being studied. According to Marxist-Leninist theory, in a society based on private ownership of the means of production, both the private and state economic sectors represent one uniform capitalist economic system. It is entirely wrong to say that the state plays the decisive role in the capitalist economy, since under state-monopoly capitalism the monopolies play the decisive role. Bourgeois theorists grossly exaggerate the importance of state social measures, and ignore the fact that these measures are only possible because of pressure from the working people; the true role of the monopolies and their activities aimed at intensifying exploitation are distorted. On the whole, the 368 attempt made by mixed economy theorists to misrepresent state-monopoly capitalism as a new, non-capitalist society, almost socialism, where the "harmony of interests" reigns, is a form of apology of capitalism designed to distract the working people from the class struggle.