ABSTRACT
The aim of capitalist production is to maximize profit. To acquire profits the capitalist must sell commodities at a lower price than that of his competitors. One of the most effective ways of doing this is to lower the production costs (the cost price) by increasing production. An increase in the productivity of labour, then, involves an increase in the organic composition of capital, more capital is invested as constant capital, on machinery and raw materials rather than variable capital. State expenditure, by postponing the immediate consequences of the fall in the rate of profit, by allowing capital accumulation to expand, necessitates an increase of credit and therefore the money supply to finance its own expenditure. State intervention in economic life, managed economy, economic programming, indicative planning are not the least bit neutral from the social point of view increasingly the state becomes the guarantor of capitalist profit.
