New Left Review I/98, July-August 1976

Ben Fine and Laurence Harris

‘State Expenditure in Advanced Capitalism’: A Critique

Ian Gough’s article on ‘State Expenditure in Advanced Capitalism’ (nlr 92) concerns a subject which has been conspicuous by its absence from Marxist theoretical work: the question of the capitalist state’s location with respect to the economy. What are the effects and laws of development of the state’s intervention in economic practice? Specifically, what is the significance of the growth of state expenditure which has been experienced by all mature capitalist societies in this century? In addition, Gough considers several related issues, including the concept of the social wage and the nature of the recent crisis in Britain. Elsewhere we have developed an analysis of the state’s intervention in crisis which bears on some of the same issues. [1] But our approach is fundamentally different from Gough’s, which in our view gives rise to serious errors. In the present article we seek to demonstrate that Gough’s wrong conclusions arise both from his dependence upon the neo-Ricardian school of economic analysis and from his mistaken understanding of the method of political theory.

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