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It means that created factors of production play an ever-growing role in sustaining steady growth. The law holds that the first department in the Marxian reproduction scheme should grow faster than the second. The first department in this analytical approach to growth propulsion consists of the production of the means of production or investment goods. The second department refers to the production of the means of consumption or consumer goods. This third law furthermore requires that growth of the production of investment goods to augment the capacity for producing these goods should at least equal growth of the second department.

Central decision-making authority is vested at the apex of national 32 HISTORICAL BACKDROP political power (not necessarily the central government) to ensure a close interdependence notably between the political and economic aspects of its conception of governance, and indeed to protect social obligations if only to strengthen state power (see Section 2). But there is more to this social commitment than the end simply justifying the means of amassing power. Within that framework largely normative behavioral prescriptions are issued for all economic agents and sanctioned as such.

Part II clarifies in detail the core components of the transformation agenda and their various qualifiers, the emphasis being on the choices confronting policy makers. Chapter 4 is devoted to stabilization in three senses: stock and flow stabilization as well as pursuing stable macroeconomic policies. Chapter 5 deals with the myriad issues of internal and external liberalization. The entire gamut of privatization, not just divestment, issues occupies us in Chapter 6. ” Although the sociopolitical sphere does not form an intrinsic part of the economist’s transformation remit, it is not very helpful to set forth the problems the transition economies face without reference to knitting and mending society’s fabric.