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duction or slowing down of production, thcrc nccessarily occurs an increase in prices, which is contrary to rational market behaviour and introduces insunnountable instability into the economy.

(b) Labor power is artificaially madę morę expensive by about 60°/o by levies on personal incomes, by which labor intensive production is discouraged and artificial unemployment created. In agriculture, labor intensive cultivation for which a comparative advantage exists (cotton, stock raising, tobacco and others) is being abandoned in favor of wheat even when it does not succeed best. In that way collective farms in some regions have reduced the total number of employed by one third. Similar effects can be noted in the production of coal (in relation to production of petroleum) and elsewhere.

10. The unfolding of the economic process has short-run and long-run aspects.

(a)    In the short-run the reąuirement is posed of equalizing the con-ditions of economic activity and bringing the market into equilibrium. This is attained with about ten categories of various methods. In Yu-goslavia the necessary methods are not used at the right time and in the right doses. Besides that problems are always solved partially, because they are solved ministerially. For both reasons disturbances are constantly arising in the economy. It would be absolutely essential to form within the framework of the Federal Executive Council some sort of ministry for economic coordination, which would harmonize ministerial decisions before sending them to the Commission for the Economy, construct a uniform conception of economic policy and thus ensure operative consistency in its carrying out.

(b)    In the long-run the task is posed of rapid growth for the sake of satisfying the needs of members of the social community. This is attained by optimal allocation of resources for which a scientifically founded program of the volume, structure and regional distribution of investment is essential. The Federal Bureau for Economic Planning ought to solve this task. The investment program is carried out by way of the banking system, the regulatory function of the National Bank, earmarked funds (for undeveloped regions, for infrastructure) and economic policy measures. Planning is in fact reduced to achievement of the desired growth by means of programmed investments. The methodology of such planning is still to be developed.

(c)    The programming of scientific research and education of top personnel demands special attention. I see one of the possible Solutions in the formation of a Bureau for Programming Scientific Research which would have the same status as the Planning Bureau.

It is hardly necessary to emphasize that the cited 10 points repres-ent an extreme simplification of the economic-political conception, conditioned by the objectiye of this essay. In so far as the presented conception is shown to be acceptable, the detailed elaboration will show all the complexity of the problems which in any case is well known.

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