% SOCIAL SCIENTIST capital from the pre-eminent position it had occupied in the colonial economy. International capitalist agencies like the Fund and the Bank were opposed to the displacement from the very beginning, as were the metropolitan States: they resented the cordoning off of the domestic market against the penetration of metropolitan commodities; they resented the continued existence of a State capitalist sector; and they resented the plethora of regulations upon capital, especially metropolitan capital. How their resentment translated itself into a struggle against the extant economic policy regime, a struggle that sometimes took the form of open hostility and boycott and at other times the form of putting pressure from within via the leverage they (especially the Bank) had acquired by 'aiding* this development itself, is a story which is too well-known to need recapitulation here. What is worth discussing here is the set of internal contradictions of this regime that have contributed to its progressive displacement, if only to dispel the notion so widely floated in the media that the Marxist critics of the current 'liberalisation* merely want a return to the antiquated policies of the 1950s. Three mutually reinforcing and interrelated contradictions need to be noted. First, the State within the old economic policy regime had to simultaneously fulfil two different roles which were mutually incompatible in the long-run. On the one hand it had to maintain growing expenditures, in particular investment expenditure, in order to keep the domestic market expanding. The absence of any radical land redistribution had meant that the domestic market, especially for industrial goods, had remained socially narrowly-based; it had also meant that the growth of agricultural output, though far greater than in the colonial period, remained well below potential, and even such growth as occurred was largely confined, taking the country as a whole, to a narrow stratum of landlords-turned-capitalists and sections of rich peasants who had improved their economic status. Under these circumstances, a continuous growth in State spending was essential for the growth of the market; it was the key element in whatever overall dynamics the system displayed. At the same time however the State exchequer was the medium through which large-scale transfers were made to the capitalist and proto-capitalist groups; the State in other words was an instrument for the 'primary accumulation of capital'. It was not of course the only instrument: direct means such as the eviction of tenants, private encroachment on common resources, private encroachment on state-owned resources such as forests from whose use the poor were simultaneously excluded; all these played their role. But the State exchequer remained the pre-eminent mechanism for 'primary accumulation'; through the non-payment of taxes (which the state generally turned a blind eye upon), through a variety of subsidies and transfers, through lucrative State-contracts private fortunes got built up at the expense of the State exchequer.