The Keynesian and Neo-Keynesians seek to deny this fact. They point to the fact that the amount of money tokens and credit put into circulation has increased massively, and yet the general price level has not risen significantly. Michael Roberts made this point some time ago.
He says,
“Indeed, for the last 20 years, central banks have failed to achieve their target rate of inflation of around 2% a year with zig-zags on interest rates and monetary controls.”
He continues,
“A Marxist model of inflation, which I have outlined previously, suggests that it is the movement of profits and investment demand, along with money supply growth, that will drive price inflation this year and next.”
And,
“this model forecasts US consumer inflation will go over 3% this year and next.”
Well, yes, it did, but, even at the time he wrote that, in the Weekly Worker, in May 2021, inflation had already surged past his year end figure, and continued to rise not to his predicted 3% plus figure, but to double digits!!!
This argument is facile. In the 1980's there was a technological revolution that qualitatively reduced the value of commodities over the subsequent 20 years. Personal computers costing a few hundred pounds replaced mainframe computers costing millions. Later, the cost of decoding the human genome fell from more than $1 billion to just a few hundred Dollars. In the first decade of this century, the global economy produced 25% of all the goods and services produced in Man's entire history! So, The Law of Value continues to operate, driving up productivity, and driving down unit values.
Suppose, in 1980, the total value of output is equal to 1 billion hours labour, and 1 billion use values are produced. On average, each unit has a value of 1 hour of labour. If 1 hour of labour is also the value represented by £1, then the total value of output is equal to £1 billion, and each unit has a price of £1. So, if, in 2010, the total value of output is still 1 billion hours of labour, equal to £1 billion, but, now, the total mass of use values is equal to 5 billion units, each unit has a value of 0.2 hours of labour, and a price of £0.20. Consequently, the general level of prices falls by 80%.
The fact that, as a result of the technological revolution of the 1980's, the volume of use values produced rose so prodigiously, compared to their total value, means that unit values, and so prices, should have fallen massively. For some commodities, as with computers and so on, that did indeed occur, but it was not true for the general level of prices, and so, using Marx's analysis above, its clear that the reason for this is that the quantity of money tokens put into circulation was way above what it should have been, as an equivalent form of value.
No comments:
Post a Comment