On Jul 4, 2007, at 11:39 AM, Yoshie Furuhashi wrote:
> There are orthodox capitalist instruments for controlling inflation:
> raise interest rates, remove state interventions (such as duties on
> certain food imports), and let the market do its work (though orthodox
> capitalist policy over all can help guerrilla insurgency against the
> government grow: "India's Hidden War," 27 October 2006,
> <http://www.channel4.com/news/articles/ontv/unreported_world/india
> +indias+hidden+war/248548>).
> Would Doug recommend them for Iran and Venezuela, which are pressured
> to implement them by their own capitalists as well as the ruling-class
> media worldwide?
Progressive governments should be concerned about inflation; it puts a real strain on working people, and can undermine political support over time. It matters where the inflation is coming from - if it's coming from loose monetary policy, big deficit spending, and stretching resources then something is going to break. Obviously orthodox capitalist policies are not the way to deal with the problem. I don't really know what the answer is, but promising things you can't deliver and then pushing inflation higher in your attempt to try is politically suicidal. Since I have less than nothing invested in the Iranian regime, I'm not going to worry about their fate, but I do have a lot of hope for Venezuela, so I'm really nervous about seeing prices rise there.
Doug