Full text: Some Comments on the Politics of Full Employment.

market. In this way the reformers hope to unleash a process of 
accumulation set in motion by the activities of many new small and 
independent enterprises as well as of the managers of existing 
large enterprises which to a large extent are to be freed of the 
shackles of burocratic controls. Once a certain reluctance owing 
to doubts and distrust of the policy is overcome it is very likely 
that a certain number of people will seize the novel opportunity 
to earn something by their efforts. How strongly people will 
respond depends, it is true, on their "economic culture" 
( "Wirtschaftsgeist" Max Weber would have called it ) which makes 
them more or less inclined to risk taking and entrepreneurial 
activity ( Armenians as compared with Turks? ). However, some 
response can be expected everywhere and with success the movement 
will spread. A major difficulty is the provision of infrastructure 
and all the outside help which a small entrepreneur needs in order 
to prosper ( transport for the peasant to bring his goods to the 
market, materials for the craftsman who offers repair service ), 
in fact all the things which are usually quoted as conditions for 
"external economies". Here is a great task for the economic 
politicians and the administration on which they have to rely. 
If the reform succeeds the resulting process will basically 
ressemble a large extended boom in a capitalist country except 
that it will almost certainly lead sooner or later to an excess of 
effective demand, a genuine demand inflation which in capitalist 
countries exists only in the imagination of economists who use the 
bogey of inflation in order to justify restrictive banking 
policies.In capitalism in fact the boom just as often is broken by 
the appearance of excess capacity as by bottlenecks on the supply 
side, but even in the latter case it does not lead to demand 
inflation because the restrictive tendencies inherent in developed

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