Economics, Politics and The Age of Inflation

Chapter 6 : The Great Depression and the New Deal
Although all capitalistic crises are basically the same, each one varies with respect to its initiation, its length and depth, and the reactions evoked by it. It is the changing capital structure itself which accounts for these variations. Since capitalism is composed of numerous nation-states of dissimilar configurations but operates on a global scale, the international crises affect different countries differently. The economic crisis of 1929 differed from all preceding crises not only in its greater impact on the world economy but also in its political repercussions and their effects on capitalism’s further development. It is thus necessary to refer to both the identities and the dissimilarities, as well as to the abstract reasons for and their concrete appearances in any particular crisis, even though all crises are grounded in the capitalist system as such. The crisis of 1929 came as a great surprise to the Americans. But this was so only because preceding cri... (From : Marxists.org.)

Chapter 5 : State Capitalism & the Mixed Economy
Marx’s Capital bears the subtitle Critique of Political Economy to show that it was intended as a critique of capitalist society and of the economic theories arising out of it. The critique is made from the standpoint of the working class, that is, from its place in the production process, on which the capitalist mode of production and its laws of movement rest. When workers won the ten-hour day, Marx hailed this as a victory of the ‘political economy of the workers,’ implying that the opposition between capital and labor determined not only the real economic processes but political economy as well. As long as the class struggle is fought on the terrain of political economy, it remains within the capitalist relations production. To be done with these relations, the capital-labor relation, and hence political economy, must be abolished. Up to now the class struggle has been fought on the terms of political economy. To pass beyond this limitation requires... (From : Marxists.org.)

Chapter 4 : On the Concept of State-Monopoly Capitalism
In the first instance the term monopoly capitalism is no more than a correct description of existing society. Capitalism is pleaded by monopolies and in large part determined by them. The state, whose function is to protect the social structure, is thus the state of monopoly capital. This is by no means a new phenomenon in capitalist society: it has always been a feature of capitalism, if not as pronounced in the past. According to Marx, who has given us the best analysis of capitalism, capitalist competition presumes monopoly, i.e., capitalist monopoly over the forces of production. The antagonistic class relations that result from this require control of the state, which at the same time represents the national interests of capital at the level of international competition. A capitalism of pure competition exists only in the imagination and in the models of bourgeois economics. But even bourgeois economists speak of natural monopolies and monopolistic prices. Although,... (From : Marxists.org.)

Chapter 3 : The Destruction of Money
Money as a means of exchange and as a hoard of wealth appears in many forms; as such it is as old as commerce itself and is encountered in the most diverse kinds of societies. Under capitalism, in addition to these general functions, it also exercises the specific function of embodying the social relations of production. In capitalist commodity production the commodity of labor power is exchanged for money. The purchaser of this special commodity uses it to enlarge his capital, measured in money terms. The primary aim of production is, accordingly, not the creation of goods for use; rather, it is only a means, albeit an indispensable one, for transforming a given quantity of capital into a larger quantity. Production of this sort is possible because labor power, as a commodity, has the ability to produce more than capitalists must pay for it; the basis of production, then, is the social relation between wage labor and capital. In the circulation process capital alternat... (From : Marxists.org.)

Chapter 2 : Deflationary Inflation
It is popular nowadays to distinguish between the inflation of time past and a new kind of inflation, which accordingly requires a new explanation, although in its monetary aspects inflation has the same features now as before: rising prices or the diminishing buying power of money. While its opposite, deflation, was viewed as contracted demand resulting in falling prices, inflation was explained by insufficient supply, driving prices up. Since, however, in this view it is the commodity market that determines price formation, little attention was paid to monetary policy. Money was seen merely as a veil concealing real processes, obfuscating them, but altering little in their essential nature. This theory was also accompanied by the illusion, still lingering today, that the quantity of money in circulation in the economy has an important influence on commodity prices and that price stability depends on an equilibrium between the quantity of money and the total volume of g... (From : Marxists.org.)

Commenting on the proceedings of the 1977 convention of the American Economic Association, an editorial in The New York Times lamented the fact that “today’s economists seem mere dabblers in the sweep of intellectual history. They may be richly rewarded by business for their stabs at forecasting and their analyzes of government regulation or floating exchange rates. But where are the attacks on the biggest problem of our time: achieving growth without spiraling inflation?. . – Most economists were dismal scientists when they arrived. Despite the drinks and the chats, they were unchanged when they left three days later.” The economists are in a dismal state precisely because they look upon their discipline as a scienc... (From : Marxists.org.)

The Crisis of The Mixed Economy
To understand the present economic situation and where it is going, one must take a look into the events of the recent past. Developments since the end of World War II have taken place entirely within a new kind of capitalism calling itself a “mixed economy.” This implies state economic interventions that differ from the interventionist policies of the past century in extent but not so much in the means applied. State interventions under a mixed economy find their reasons as well as their limits in the conditions of existence and accumulation of private capital. Quite apart from the instruments of power that the state uses to secure social stability on the domestic front and to support national interests in international competi... (From : Marxists.org.)