Abstract: The classical and neo-classical economists present capitalism as a self-regulating and self-sustaining system. A system works on Say’s law of market or Walrasian general equilibrium lines where market device works so efficiently that there are no possibilities of instability. The full utilization of available resources keeps the economy on a steady state growth path. However, Marxian and Keynesian economists do not believe in this idealistic interpretation of the working of capitalist economic system. They argue that cyclical instability is a fundamental tendency of capitalist economic structure. Historically, it has been proven that the capitalist system, from its very inception, has required state intervention, not only in its external relations but also in its internal functioning. The stability of capitalism depends upon the stability of capital accumulation which in turn depends upon state facilitation and direct state intervention in the economic affairs. In the light of these facts, the present paper makes an attempt to scrutinize the role of state in the accumulation process, which has evolved with the evolution of social classes and has been dominating economic and social affairs in accordance with the needs of the dominant class.

Key words: capitalism; state; accumulation; stability; Keynesianism; financialization

From: World Review of Political Economy 2020 11 (1)

Editor: Wang Yi