unflation

[Rakesh Bhandari]

Perhaps the US ruling class having achieved a clear monopoly in several
advanced capital goods industries positively wants a Hayekian global
deflation via fiscal austerity in order to stimulate "capital-deepening"
investments in new technology which in such tight conditions can alone
ensure the maintainence of profitability through radical reductions in unit
costs? Yesterday's Financial Times for example reported the strength of
investment demand in China due to the threat of deflation, coupled with an
inability to rationalise through mass layoffs in the state sector.
Deflationary periods can stimulate or necessitate exceptional technical
progress, and the US K-sector (as James Galbraith calls knowledge intensive
or capital goods industries) is alone poised to reap great rewards, then
partially distributed to its 'symbol analytical' elite.

yours, rakesh