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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] We wish to thank Susan Himmelweit, Simon Mohun and Bob Rowthorn for helpful comments.Ben Fine and Laurence Harris, ‘Marxism, the State and the Economics of the Conjuncture’, Discussion Paper No. 39, Birkbeck College Economics Department, June 1975; Fine and Harris, ‘The British Economy since March 1974’, Bulletin of the Conference of Socialist Economists, Vol. IV 3 (12), 1975; Fine and Harris, ‘The Problem of Analysing Current Economic History’, Mimeo; Fine and Harris, ‘The British Economy May 1975–January 1976’, Bulletin of CSE, June 1976; Fine and Harris, ‘Controversial Issues in Marxist Economics’, in Ralph Miliband and John Saville (eds.), The Socialist Register 1976. 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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