Active State Control Vs. Market Guidance in A Dependent Capitalist Economy : The Case of Sri Lanka—1970-84 Introduction EVEN after the country's political independence in 1948, the Sri Lanka economy continued to remain as a classic case of a dependent capitalist system. In terms of the dominant mode of production and relations of production the economy and the State in Sri Lanka has continued to be capitalistic. Given its extremely high reliance on foreign markets (a) to sell its production as well as to procure its commodity requirements^) for foreign capital inflows, (c) for production technologies and more recently (d) even for jobs for its labour force, the economy has remained upto date in an essentially dependent state, in spite of frequently heard rhetoric of self-reliance. The' domestic bourgeoisie and elite groups in society have clearly failed to extricate themselves from their dependency shackles which had their origins in the period of colonial subjugation of society. The State in this dependent capitalist system has adopted various policy postures to achieve some improvement in the forces of production and some socio-economic development, yet without bringing about any fundamental change in the existing dependent structure, economically or socially. This was most clearly seen during the first decade or so after independence. The first two regimes after independence (1948-56) were quite content with maintaining the colonial economic structure. This was a result partly of clearly ideological reasons. In addition, the global economic conditions of the time made the continuation of those colonial structural patterns both economically feasible and politically tolerable. The British handed over self-government to comprador elements and elite sections of society in Sri Lanka in 1948 without any significant degree of articulate agitation for self-rule on the part of the latter groups. Those who came to power following the first General Elections, and managed to remain in power also after the General Elections of 19521 were, in terms of their class affiliations, committed to maintain structurally the **Professor of Economics, University of Colombo.