Book contents
- Frontmatter
- Contents
- List of Contributors
- Preface
- Introduction
- I FINANCIAL INTERMEDIARIES IN EUROPE
- II FINANCIAL INTERMEDIARIES IN THE AMERICAS
- III OTHER FORMS OF INTERMEDIATION
- 7 Intermediaries in the U.S. Market for Technology, 1870–1920
- 8 Beyond Chinatown: Overseas Chinese Intermediaries on the Multiethnic North-American Pacific Coast in the Age of Financial Capital
- 9 Finance and Capital Accumulation in a Planned Economy: The Agricultural Surplus Hypothesis and Soviet Economic Development, 1928–1939
- 10 Was Adherence to the Gold Standard a “Good Housekeeping Seal of Approval” during the Interwar Period?
- Afterword: About Lance Davis
- Index
- References
9 - Finance and Capital Accumulation in a Planned Economy: The Agricultural Surplus Hypothesis and Soviet Economic Development, 1928–1939
Published online by Cambridge University Press: 24 July 2009
- Frontmatter
- Contents
- List of Contributors
- Preface
- Introduction
- I FINANCIAL INTERMEDIARIES IN EUROPE
- II FINANCIAL INTERMEDIARIES IN THE AMERICAS
- III OTHER FORMS OF INTERMEDIATION
- 7 Intermediaries in the U.S. Market for Technology, 1870–1920
- 8 Beyond Chinatown: Overseas Chinese Intermediaries on the Multiethnic North-American Pacific Coast in the Age of Financial Capital
- 9 Finance and Capital Accumulation in a Planned Economy: The Agricultural Surplus Hypothesis and Soviet Economic Development, 1928–1939
- 10 Was Adherence to the Gold Standard a “Good Housekeeping Seal of Approval” during the Interwar Period?
- Afterword: About Lance Davis
- Index
- References
Summary
Finance and capital accumulation are closely related, although fundamentally different. “Capital accumulation” refers to increases in productive structures and equipment, while “finance” refers to the borrowing and lending undertaken by and through banks, securities markets, and among private individuals. In market economies, many real investment projects require a corresponding financing plan, so finance is often the complement to capital accumulation. In such cases, a more efficient financial system may increase the pace of capital accumulation or better direct it. Financial transactions, however, need not necessarily lead to capital accumulation, and projects financed out of retained earnings need not involve any new financial dealings.
What about nonmarket economies? Is there a relationship between finance and capital accumulation? In a case like the Soviet Union in the 1930s, there is the possibility of no link. After all, in a market economy where capital formation requires monetary outlay, a lack of money can stop investment, but in a planned economy where investment goods are allocated by fiat, why should money matter? However, even Stalin balanced his budget, so finance was an issue in Moscow as well as New York.
The agricultural surplus hypothesis is the link usually suggested between finance and capital formation in the U.S.S.R. The hypthesis deals with two issues – state finance and farm marketing. So far as finance is concerned, the agricultural surplus hypothesis contends that the investment drive of the 1930s was financed by mobilizing the agricultural surplus.
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- Information
- Finance, Intermediaries, and Economic Development , pp. 272 - 287Publisher: Cambridge University PressPrint publication year: 2003