deficiency of demand. The analysis of militarism in the last chapter over-reaches itself by trying to prove too much. The argument is that armaments are built up out of taxes which fall entirely on wages.[54] This can be regarded as a kind of 'forced saving' imposed on the workers. These savings are extra to the saving out of surplus. They are invested in armaments, and that ends the story. On this basis the armaments, in themselves, cannot be held to provide an outlet for the investment of surplus (though the use of the armaments, as in the Opium War,[55] to break up primitive economies is a necessary condition for the colonial investment already described) and capital equipment to produce armaments is merely substituted for capital formerly producing consumers' goods. The analysis which best fits Rosa Luxemburg's own argument, and the facts, is that armaments provide an outlet for the investment of surplus (over and above any contribution there may be from forced saving out of wages), which, unlike other kinds of investment, creates no further problem by increasing productive capacity (not to mention the huge new investment opportunities created by reconstruction after the capitalist nations have turned their weapons against each other). All this is perhaps too neat an account of what our author is saying. The argument streams along bearing a welter of historical examples in its flood, and ideas emerge and disappear again bewilderingly. But something like the above seems to be intended. And something like it is now widely accepted as being true. Rosa Luxemburg, as we have seen, neglects the rise in real wages which takes place as capitalism develops, and denies the internal inducement to invest provided by technical progress, two factors which help to rescue capitalism from the difficulties which it creates for itself. She is left with only one influence (economic imperialism) to account for continuous capital accumulation, so that her analysis is incomplete. All the same, few would deny that the extension of capitalism into new territories was the mainspring of what an academic economist has called the 'vast secular boom' of the last two hundred years,[56] and many academic economists account for the uneasy condition of capitalism in the twentieth century largely by the 'closing of the frontier' all over the world.[57] But the academic economists are being wise after the event. For all its confusions and exaggerations, this book shows more prescience than any orthodox contemporary could claim. JOAN ROBINSON _Cambridge._ FOOTNOTES: [1] For a totally different interpretation see Sweezy; _The Theory of Capitalist Development_, chap. xi, Section 9. [2] See p. 166. [3] Cf. the quotation from _Capital_, vol. iii, p. 331. [4] See p. 132. [5] See p. 135. [6] See p. 130. [7] Exchanges between industries, however, must take place at 'prices of production' not at _values_. See below, p. 15, note. [8] See p. 113. [9] See p. 361.