> Ernest Mandel says inflation occurs because workers
> are paid to work in the defense industry, but the
> goods are not used by consumers, so inflation occurs
> in the chase for commodities.
>
> >From Ernest Mandel's "An Introduction to Marxist
> >Economic Theory" -
>
> "The fundamental cause of this permanent inflation is
> the importance of the military sector, of the armament
> sector, in the economy of most capitalist
> countries. The production of armaments has this
> special characteristic: it creates purchasing power in
> exactly the same way that production of consumer goods
> or production of producer goods does wages are paid in
> plants making tanks or rockets, just as they are paid
> in plants manufacturing machines or textiles, and the
> capitalist owners of these plants pocket a profit just
> like the capitalist owners of steel mills or textile
> plants but in exchange for this supplementary buying
> power, there is no corresponding supplementary
> merchandise placed on the market."
Yes there is. It's called the surplus product, with surplus value in it that must be realized somehow. Since the workers can only consume ordinary product, never surplus product, somebody else must step in, or accumulation grinds to a halt (as it must when the world market is realized.)
Lbo-ers who like the luxemburgian take (or are just interested in what goes on elsewhere) may find this site interesting:
Robert Kurz and friends' hotbed of German "apocalyptic marxism". Site has an English section.
cheers AN