Blog-Reference and Blog-Reference
Inflation theory is wrong, it is essentially the commonplace Quantity Theory that is at the back of peoples’ minds.#1
The lethal flaw of MMT policy is NOT inflation but distribution.#2 The government can replace taxation and, in addition, increase spending at any time for any consumptive purpose by deficit-spending/money-creation. This has two effects
- The household sector = ninety-nine-percenters is taxed in real terms by a one-off price hike (NOT inflation). Open taxation turns into stealth taxation, and in real terms, NOTHING changes.
- Because Public Deficit = Private Profit, the one-percenters enjoy an immediate profit boost. In addition, part or all of the increased public debt can become a long-term source of interest income depending on whether and how the public debt is consolidated.
The replacement of taxation by deficit spending clearly benefits the one-percenters. In essence, MMT argues that public deficit is good for the ninety-nine-percenters and for democracy. The fact of the matter is that public deficit is good for the one-percenters and for the Oligarchy.#3
The whole inflation issue has never been anything else than a red herring.#4
#1 Economists never understood how the price mechanism works
#2 MMT was right all along: Gov-Deficits do NOT cause inflation
#3 Keynes, Lerner, MMT, Trump and exploding profit
#4 For the full-spectrum refutation of MMT see cross-references MMT
Related 'The Third Way: Towards the happy zero-tax economy' and 'MMT was right all along: Gov-Deficits do NOT cause inflation' and 'Attention: there are THREE types of inflation' and 'A la recherche de l'inflation perdue' and 'MMT is ALWAYS a bad deal for the 99-percenters' and 'Inflation: back to basics' and 'How some MMTers got inflation wrong'.
You cite Marx “In studying such transformations it is always necessary to distinguish between the material transformation of the economic conditions of production, which can be determined with the precision of natural science, and the legal, political, religious, artistic or philosophic – in short, ideological forms in which men become conscious of this conflict and fight it out.”
The philosopher and sociologist Marx never understood the “material transformation of the economic conditions of production, which can be determined with the precision of natural science”, that is, how the price- and profit mechanism works.#1, #2, #3
Marx was a soapbox economist and this excludes him forever from science and any scientific debate. The same applies to the philosopher Tom Hickey.
#1 Capitalism, poverty, exploitation, and cross-over exploitation
#2 Proﬁt for Marxists
#3 For the basic economic Laws see Wikimedia AXEC112c.