MACRO-ECONOMIC POLICY & PLANNING ECONOMIC TRANSFORMATION 79 growth-targets in some key sectors. These would determine the overall trajectory of development, within which there would be sufficient room for the operation of the free market, with the State imaginatively improvising responses to the strains that would inevitably arise from time to time owing to the operation of such a mix between the plan and the market. As is obvious from the above, the operation of such a system is not only not predicated upon universal public or collective ownership of the means of production, but is even compatible with private capitalist (not to mention petty) ownership in several spheres, provided of course the capitalists are responsive to the social need underlying the trajectory of development articulated by the state. II I should like to distinguish this vision, which I think has relevance for a democratic South African economy in the current conjuncture, from two other possible visions. The first of these believes in a 'minimalist* State. While the need for State intervention for undertaking certain infrastructural investments which the capitalists may be unwilling to do, for providing certain social services, and for weaving a 'safely-net* for the poor and the unemployed (the need for which is often seen to be only transitional), is recognised, the basic solution to social and economic problems is seen to lie in rapid economic growth, and the chief means of growth are seen to lie in the provision of freedom of operation to capital, both domestic as well as multinational, in the domestic economy. Allowing markets to function without interference, removing domestic controls of various kinds, and liberalising trade, are visualised as ushering in an internationally competitive, efficient economy which would exhibit rapid and sustained growth. While a certain amount of taxation by the state is accepted as being necessary for meeting its spending obligations, such taxation, it is suggested, should neither result in domestic price^distortions nor destroy capitalists* incentives by being excessively high (at any rate by international standards). A variant of this argument in the South African context would state that since tax-rates here are already very high by international standards, the State should meet its expenditure obligations, especially for the uplift of the oppressed in a democratic South Africa, by privatising State owned assets. This particular argument is palpably wrong. In a supply-constrained system, an increase in State expenditure on the upliftment of the blacks would not cause any additional macro-imbalances only if there is a simultaneous reduction in aggregate demand elsewhere i.e. in other avenues of public expenditure or in private consumption or investment (apart from foreign capital inflow). Now, unless the sale of State-owned assets to the