fiscal crisis in the capitalist state

fiscal crisis in the capitalist state

a tendency to crisis in the contemporary CAPITALIST STATE seen as arising from a contradiction between the achievement of social harmony and legitimacy (e.g. by the provision of social welfare) and the need to maintain the conditions for profitability and the ACCUMULATION OF CAPITAL (O'Connor, 1973). The upshot of the CONTRADICTION stemming from these dual requirements is a tendency to increase the ‘tax burden’ on capital as a result of an ‘overload’ of demands within the capitalist state. Two outcomes may result from this: either a reduction of unprofitable ‘state expenditures’ must occur so that capital accumulation can continue, or a transition to socialism will take place in which the accumulation of capital is no longer a requirement. In recent years in Western capitalist states, it is the former option which has usually been taken, and this has generally occurred without the crisis in legitimacy expected by some commentators (see LEGITIMATION CRISIS). See also OVERLOAD ON THE STATE, BELL, THATCHERISM.
Collins Dictionary of Sociology, 3rd ed. © HarperCollins Publishers 2000