>What Mattick wrote:
>
>"Inflation is a weapon in the Keynesian arsenal. Through the more rapid
>increase in prices relative to wages, the profit necessary for expansion
>grows, while the accelerated creation of money reduces the interest on the
>debt, which makes investment easier. The surplus value gained in this way,
>equal to the reduction in the value of labor power transferred from money
>to productive capital, permits a corresponding increase in
>accumulation...The real gains that inflation yields to capital are thus
>only another form of the devaluation of labor power, which happens in
>every crisis. What used to be accomplished by deflationary means is now
>effected by inflationary means, not by lowering wages but by raising
>prices--or by a combination of both. The increase in profits by means of
>inflation encounters definite barriers, however, as the reduction of the
>value of labor power has absolute limits, and even these cannot be reached
>because of the resistance of the workers. Moreover, the increase in total
>demand brings with it an increase in the demand for labor power, which in
>itself restricts the lowering of wages by price inflation."
>____________________________________________
So why does the bourgeoisie hate inflation so much, and why have they embraced deflationary policies since Paul Adolph Volcker's ascendancy in 1979?
Doug