THE POLITICAL ECONOMY OF THE'RETREAT OF THE STATE' 57 not the birth-pangs of a new vibrant capitalist order, but a transition to a state of progressive social decay. If after a period of initial promise and dynamism, our economy then seems to have moved to a dead-end to be followed by decay, that only sums up the life-cycle of capitalism in societies like ours. NOTES AND REFERENCES 1. The debt explosion and the need for State support for preventing a debt deflation have been discussed by a number of economists in the US, following upon the original work of Hyman Minsky. For a lucid discussion, see the collection of papers by Paul Sweezy and Harry Magdoff, The financial Explosition, Monthly Review Press, New York. 2. See the volume on Macro-economics produced by the Union of Radical Political Economists in the US (New York, 1989). 3. See M. Kaledd, Theory of Economic Dynamics, Alien and Unwin, 1954. 4. Since it" is being argued that the banks lending rate is hiked up even when they have unutilised lending capacity, the presumption is of an implicit collusion among banks. In case interest rates are not administered, but are determined by the demand for and the supply of money, which is a common assumption in economics, the same result, i.e. a rise in interest rate, will follow if the demand for money is a function of the value of wealth. 5. V.I. Lenin, Imperialism the Highest Stage of Capitalism, Vol. 3 of Selected Works (3 Vols.). 6. See the well-known essay by Oskar Lange, 'The Role of the State in Monopoly Capitalism', reprinted in his Papers on Economics and Sociology, Pergamon Press. 7. M. Kalecki, 'Political Aspects of Full Employment', reprinted in Selected Essays on the Dynamics of the Capitalist Economy 1933-1970, CUP, 1971. 8. Kaledd, ibid. 9. Professor J.R. Hicks' 'Comments' in the discussion of his paper 'World Economy in Recession', in D.K. Bose (ed.). Review of the Indian Planning Process, ISI, Calcutta, 1986. 10. A simple fact in support of this argument is the following: if primary commodity prices had not crashed and thereafter remained subdued through the 1980s, the level of unemployment required in the advanced capitalist economies for bringing the rate of inflation down to its current level would have been vastly in excess of what prevails. For the role of primary commodity prices in controlling the inflation rate, see W. Beckerman and T. Jenkinson, 'What Stopped the Inflation: Unemployment on Commodity Prices?', Economic Journal, March 1986. 11. The manner in which an income deflation directed against the peasants via an adverse terms of trade shift can control the rate of inflation is analysed in my paper, 'Terms of Trade and the Rate of Inflation', in K. Basu and P. Nayak (ed.), Development Policy and Economic Theory, OUP, Delhi, 1992. 12. Voices demanding such a transition have been there (in BJP circles for instance) but have on the whole been rather muted. 13. See in this connection Ashok Mitra, Terms of Trade and Class Relations, Frank Cass, London, 1977. 14. S.L. Shetty, 'Investment in Agriculture: Brief Review of Recent Trends', Economic and Political Weekly, February 17-24. 15. Palmiro Togliatti, lectures on Fascism, Lawrence and Wishart, London, 1976.