Duncan wrote in [OPE-L:3892]:
> >3. What is the relationship between the law of the tendency for the
> >general rate of profit to decline and the counteracting factors to the
> >LTGRPD to changes in the average price level of commodities?
> I would argue, none. The LTGRPD has to do with aggregate or average
> patterns of technical change and the evolution of the value of labor-power,
> not with average prices.
Can foreign trade and/or an increase in share capital affect average
prices?
If there is a depression of wage below their value and/or cheapening of
the elements of constant capital couldn't that affect average prices?
> I'm not sure there is
> very good evidence linking the rate of inflation to the state of the
> business cycle in state-credit based systems.
Isn't there reason to believe that since aggregate demand, income, and
consumption spending is increasing (and the IRA is decreasing) during the
expansion, this can have an inflationary effect?
> I'm also not sure what the "division" between money capital
> and real capital is, nor even what "real capital" means, unless it means
> the money value of the components of capital corrected for inflation, in
> which case it would seem to be inflation that affects the relation between
> money and real capital.
Perhaps "real capital" is a misleading term, but it was used in contrast
to money capital ("Geldkapital") in the Fernbach (Penguin) translation of
VIII in the titles of Chs. 29, 30, and 31 (in the original German "real
capital" is "wirkliches Kapital"). [In the Kerr and International
editions, the translation is the same].
> >7. What is the relation between changes in stock market activities
> >(prices, timing, organization) to inflation?
> Complicated, but there's quite a bit of work on this in the finance
> literature. The problem is that moderate rates of inflation have big and
> non-uniform effects on corporate earnings due largely to peculiarities of
> the U.S. tax code, but also to some degree to the particular nature of
> capitalist production in different sectors.
What are some sources on this (especially related to the "particular
nature of capitalist production in different sectors")?
> >9. When the process of the concentration and centralization of capital has
> >developed to such an extent that many branches of production come to be
> >dominated by oligopolies, how can oligopolistic price determination affect
> >inflation?
> I would say, not at all, because oligopoly has to do with the
> redistribution of value through prices, not with the average level of
> prices.
*If* oligopolies are able as a result of product differentiation and
advertising to (during some periods of time) mark-up the price above
value of means of consumption, wouldn't this decrease real wages and be
inflationary (or would it simply represent a redistribution of income
between capital and labor?)?
> Whether it's oligopoly or just sectoral price changes, the cost of
> reproduction of labor power can be significantly affected by relative price
> changes. For example, the much-noted stagnation of real wages in the U.S.
> over the last 20 years holds for real wages deflated by a cost-of-living
> index such as the CPI, but not for the "product wage", that is wages
> deflated by an index of average prices over the whole economy. Part of this
> deviation seems to have to do with the very rapid increase in the cost and
> use of medical services.
Then, wouldn't the competitive structure of markets in the medical
services sector have an effect on the pace of inflation?
> >11. What affect do wage-struggles have on the rate of inflation?
> Better to answer this in historically specific terms: England in 1870,
> Italy in 1970, the U.S. in 1996.
OK, what effect did wage-struggles have on the rate of inflation in
England in 1870, Italy in 1970, and/or (?) the US in 1996?
> I would argue that monetary policy and the size of the "money supply" are
> of relatively little direct importance in determining the rate of inflation
> in countries like the U.S. where the state credit is good. The story can be
> very different when the only way the state can borrow is to have the
> central bank monetize the debt, but then monetary and fiscal policy become
> closely intertwined.
I'd like to hear some more about this.
> by price supports for commodities in certain
> >branches of production? ... other?
> Price supports ought to influence relative prices, not average prices, at
> least proximately.
They "ought to"? In an international economy, wouldn't price supports for
"uncompetitive" firms in an individual nation, have an effect on the rate
of inflation in that nation?
> >15. What were the causes of hyperinflation in many countries in Latin
> >America during the 1980's? In Russia in the 1990's?
> I think these are cases where the state depended on central bank
> monetization to finance their deficits. An interesting question is what
> contradictions in these economies the inflation actually mediated, since I
> don't think it had much impact on real wages (since workers became
> sophisticated about indexing wages) nor in terms of an "inflation tax" on
> holders of currency (since nobody held much of the currency once the
> hyperinflation got started.)
I agree with you -- it's an interesting question. What do others think?
Thanks for the comments.
In solidarity, Jerry