Role of the state

wpc at cs.strath.ac.uk wpc at cs.strath.ac.uk
Thu Feb 23 02:23:32 MST 1995


I would view the erosion of the ability of the
state to control capital flows and investment
decisions as stemming from politics and
ultimately from class struggle rather
than an inherent development of the economy.

The state in the 19th century had no control
over capital flows. It was only in the mid
20th century after the experience of a semi-
socialised economy during wartime that
such controls arose. There persistence after
that was a concession to the political strength
of labour, and allowed full employment and
welfareist policies.

It is the political defeat of the working-classes
in the developed countries after the 1970s
culminating in the counter-revolutions in the
former socialist countries, that have allowed
the recreation of footloose capital. This
in turn politically weakens labour.


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