The End of the Boom

Abstract

In many ways the 1930s marked a watershed. Far from being some accidental interruption to the smooth path of capitalist development, the depression exposed the tendencies inherent in capital accumulation. It clearly revealed the changing structure of capitalist markets and the need for the state to play a much greater role in the capitalist economy. By the 1930s production had become increasingly concentrated to take advantage of economies of scale and because relentless competition between capitals allowed the successful companies to grow at the expense of the rest. This tendency towards monopoly was further strengthened by the centralisation of capital—the amalgamation of different firms into much larger units under co-ordinated financial control. By the 1930s the economies of the most advanced capitalist states had already assumed their familiar modern look; a division between corporate capital, the sector of giant financial and industrial companies which dominated their own markets and industries, and small capital, the sector of numerous but small firms, of declining importance in the economy.

The right remedy for the trade cycle is not to be found in abolishing booms and thus keeping us permanently in a semi-slump; but in abolishing slumps and thus keeping us permanently in a quasi-boom.

Lord Keynes, The General Theory of Employment, Interest and Money (London: Macmillan, 1973) p. 322.