[lbo-talk] inflation and Ernest Mandel

[Christian Gregory]

>Someone -- I think Chris D -- mentioned the argument
that current military production is more capital
intensive and less labor intensive than social
spending, or indeed old-time military spending
(building tanks and bombers for WWII, eg). In graduate
school --this must have been around 1987 0r 88, really
it doesn't seem to long ago ;} -- I wrote a paper in
which I surveyed research on this topic, and came to
the conclusion (based on the then available data) that
it was supported by the evidence. It makes a diff, I
hypothesized, if the $ pumped in by pump-priming goes
to investors, who may or may not put it to any
productive use, than to workers, who must spend it
all.

Mandel would have been addressing the prior moment of military production, so it's hard to see where he's coming from, at least. When you say that you found it made a difference, do you  mean that there was some inflationary effect for social as opposed to military spending? How strong was the correlation?

I don't have my Mandel handy, but it seems like this idea is one of those one-dimensional explanations that is driven by (a) anti-militarism, (b) the whole "productive/unproductive" labor idea, and/or (c) the inflationary- crisis-by-imbalance-between-department-1-and-department-2 idea. It seems like one of those undialectical moments in Marxist political economy--where Mandel gets caught doing dialectics at a standstill.

Christian