[lbo-talk] inflation and Ernest Mandel

[Lance Murdoch]

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.

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> 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."