NOTES ON THE POLITICAL ECONOMY OF STRUCTURAL ADJUSTMENT 5 gy of "liberalisation" which has becotne important; there is an actual drive everywhere, but most notably in the underdeveloped countries, to "privatise", to. "liberalise", to "roll back" the State from the productive arena, and to curtail social expenditure. The question naturally arises in this context: why have such policies and such ideological positions come into vogue? To say that this is because of either the "failure" of, or the objective limitations faced today by, State intervention is no answer: problems faced by one trajectory of development do not propel societies into adopting its very opposite; and in any case trajectories of development come into vogue or get superseded on account of changing social forces. In discussing this second issue therefore, in particular the question of why the ideology of "liberalisation" and policies of structural adjustment have come into vogue today, we have to explore whose interests these policies specifically serve. The present paper is addressed to this question. Our concern, to recapitulate, is: what are the characteristics of the social entity existing in the world economy which propagates the ideology of "liberalisation", and whose interests dictate, no doubt through very complex mediations, the IMFs imposition of structural adjustment upon a host of third world countries?2 II Consider an individual economic agent. There are two ways in which this agent can improve his/her stock of assets. The first way is by refraining from consuming a part of the revenue earned and using this part either to acquire some physical asset, or to make a loan, directly or indirectly, to someone else to acquire such an asset. In common parlance this is expressed as follows: the individual must "save" and "invest" (either directly or indirectly) in order to add to his/her stock of wealth. This appears well-understood but, in fact, is not. The impression which most people have about this process is that wealth can increase only if some "sacrifice" is made in the form of foregone consumption out of a given income. As a matter of fact it is investment that governs savings, so that wealth increases merely by the aggregate decision to add to wealth, which increases aggregate income until an equal amount of savings is generated (or squeezes an equal amount of forced savings out of the workers through inflation). The qv ^stion of the acquisitors of additional wealth, making, in the aggregate, any sacrifices does not arise.3 This is the way of capital accumulation. The second way is by the economic agent's acquiring an asset of higher value in exchange for an asset of a lower value. There are obvious circumstances, even apart from direct physical coercion, where this is possible, the example of the village moneylender being a jtypical example. While writing Capital Marx deliberately left out of reckoning such possibilities of enrichment: since one asset-owner here