On Fri, 6 Aug 2004, Doug Henwood wrote:
>> 5. Global dominant capital is rather happy to see inflation in the offing.
>
> I think Nitazn & Bichler are right about oil prices, but "dominant capital"
> isn't necessarily happy about it.
Unless I'm misunderstanding, the only things Nitzan and Bichler are right about are the things no one ever questioned. Propositions 1-3, that the war would drive up oil prices, were subscribed to by everyone who thought invading Iraq would lead to chaos in one form or another, which is just about the entire anti-war movement from Chirac to Chuck0. Their only original contribution seems to be in propositions 4 and 5 -- that inflation has been unleashed and that capital is happy about it -- and on the face of it both those propositions seem diametrically wrong: there is no serious inflation threat anywhere and yet the markets are already terrified even at the thought of it. Europe has arguably been paralyzed by this fear -- it might have just snuffed out an incipient recovery by convincing them to keep the monetary choker pulled tight. Instead of inflation, higher oil prices seem to have led to slower growth, which contradicts the last of their points, that they would be good for accumulation.
Am I missing something?
Michael