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reckoning makes sense. The work of the housewife, though it has the same material or service effect as that of the chambermaid, restaurant worker, cleaner, porter, or laundry worker, is outside the purview of capital; but when she takes one of these jobs outside the home she becomes a productive worker. Her labor now enriches capital and thus deserves a place in the national product. This is the logic of the universal market. Its effect upon the patterns of employment and the composition of the working class will later be treated in greater detail.
Notes
Chapter 14
The Role of the State
The use of the power of the state to foster the development of capitalism is not a new phenomenon peculiar to the monopoly stage of the past hundred years. The governments of capitalist countries have played this role from the beginnings of capitalism. In the most elementary sense, the state is guarantor of the conditions, the social relations, of capitalism, and the protector of the ever more unequal distribution of property which this system brings about. But in a further sense state power has everywhere been used by governments to enrich the capitalist class, and by groups or individuals to enrich themselves. The powers of the state having to do with taxation, the regulation of foreign trade, public lands, commerce and transportation, the maintenance of armed forces, and the discharge of the functions of public administration have served as an engine to siphon wealth into the hands of special groups, by both legal and illegal means.
But with monopoly capitalism this role is greatly expanded and takes on a more complex and sophisticated form. In some countries, particularly Germany and Japan, monopoly capitalism both created and was created by a new state power; thus the modern role of the state appears in these countries from the very beginning of the epoch. In other countries, principally the United States and Britain, the capitalist class had marked off for the government a more circumscribed sphere of operations, and for this and other reasons the growth of social and economic interventionism on the part of the state assumed, for a time, the peculiar shape of a movement for reform and appeared to develop as a struggle against capital, although this proved illusory. At any rate, in the end and in all places the maturing of the various tendencies of monopoly capitalism created a situation in which the expansion of direct state activities in the economy could not be avoided. This can be clearly seen if we consider some of the reasons for this development under four general headings:
- Monopoly capitalism tends to generate a greater economic surplus than it can absorb. As a result it becomes increasingly vulnerable to disorders in its overall functioning, in the forms of stagnation and/or severe depression, marked by unemployment and idle plant capacity.\* With the diagnosis pointing to a shortage in “effective demand," it has finally been accepted by the policy-makers of capitalist societies that government spending will, to the extent that it is enlarged, fill this gap—the effect of an increase in government spending being merely proportional if taxes are increased a like amount, but greater than proportional if spending outruns tax revenues.' But this policy, which has in one form or another been adopted by all capitalist countries, did not become universally accepted doctrine until a half-century after the beginnings of monopoly capitalism, and then only because of the prolonged depression of the 1930s, a crisis which found no spontaneous resolution and which threatened the existence of capitalism on a world scale.
\* It is far beyond our scope to try to deal with this subject here. I recommend to the reader the excellent exposition in Baran and Sweezy, Monopoly Capital. While the entire work is devoted to the generation and absorption of the surplus, see especially Chapters 3 and 8.
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