[Potemkin]

Oh dear, I have already said this before you even thought it several pages ago and numerous times actually. Some sectors will beat inflation, others will not, the overall total of 'wages' will never do so.

This does not logically follow. The increase in the overall total of wages is only one component of the rate of inflation; it could indeed beat the rate of inflation without necessarily triggering an inflationary spiral.

Orthodox capitalism you mean.

Marx based most of his economic theory on classical economics, most notably Adam Smith's work. The similarities are therefore not surprising. You clearly haven't read any Marx. Or any Adam Smith either, I'm guessing.

[SueDeNîmes]

You are not making sense.

To you, perhaps.

No, there is no winner from inflation.

That'd come as news to BP, ExxonMobil etc just now. Or to OPEC during the 1970s. If someone pays more, someone gets more, but the population in aggregate doesn't gain unless more stuff is produced.

Some firms raise prices more than their wage increase some don't, it all depends on their price strategy, what you still fail to comprehend is that wages are part of the inflationary mix. Wages are a subset of inflation, a subset can never be greater than a set., Not possible. Prices of private company products going up is also a subset of inflation.

I do not understand what is so difficult for you to grasp. Inflation is the total increase of prices and costs, part of that increase is wage increases, another part is commodity price increases, another part is housing prices going up. None of these parts will ever be greater than the whole.

Is this some kind of rocket science for you?

Nah, it just obviously ain't so (plenty examples of workers securing above-infaltion pay rises) and isn't even addressing the example I was addressing, i.e. wage-led inflation where pay rise = price rise. It was claimed that workers in that case gain nothing. Yeah they do as a matter of arithmetic, albeit at the expense of other consumers.

Ok, we have gone into magic fairy tale thinking now. Have "deliberately maintained positive inflation".

Most rich countries deliberately maintain a positive rate of inflation. I'm happy to leave any assertion to the contrary standing on its merits.

Deflation is even worse than high inflation.

Even Potemkin, the premier communist on this forum acknowledges that our current inflationary predicament can only be solved by increasing our economic output(growth) and not by redistributing wealth.

The rest of the irrelevant nonsense about inequality aside from being irrelevant and off-topic, they are just sauce.

And no we wll not turn this thread into a capitalist/communist inequality shitshow.

Commies have nothing to say about the inflationary problems we face and your "system" has no solutions for these problems.

And most of this has nothing to do with what I said.

[noemon]

This does not logically follow.

What are you on about? Of course it does. Can you say something of substance please? Anything?

The increase in the overall total of wages is only one component of the rate of inflation;

Correct.

it could indeed beat the rate of inflation without necessarily triggering an inflationary spiral.

No, it cannot. And besides which rate would that be, CPI at 11.1% today in the UK or RPI at 14.2%.

Or actual never-measured inflation 2,3 or more times that?

The government increases money they owe you(back taxes, pensions) by the CPI and money you owe them by the RPI.

The CPI is a benchmark that the government is happy with, a benchmark "they or we can beat". Itself a subset of inflation.

Because unless you beat this third unnamed and unmeasured last one, you have not beaten anything, all you have done is thrown fuel into the inflationary spiral leading to stagflation.

Btw, it is possible for total overall wages to beat the smallest inflation index but only because the CPI index is less than half of actual inflation and even this can only happen when lots of stars align, .ie when inflation is tame below 4%, not today and not during a high inflation crisis, only temporarily and only after a serious golden age style economic revival. And that only because the CPI is not even half of actual inflation.

Marx based most of his economic theory on classical economics, most notably Adam Smith's work. The similarities are therefore not surprising. You clearly haven't read any Marx. Or any Adam Smith either, I'm guessing.

The point is simple, redistribution will not cut it, only growth will.

To you, perhaps.

You are talking to me, your entire paragraph is nonsensical from which no meaning can be discerned. If you have a point to make, please do so.

That'd come as news to BP, ExxonMobil etc just now. Or to OPEC during the 1970s. If someone pays more, someone gets more, but the population in aggregate doesn't gain unless more stuff is produced.

Oh dear, they are not profiting because of inflation, they are causing inflation to profit and we respond with windfall taxes.

Their assets also get fucked from inflation just like everybody else's.

Nah, it just obviously ain't so (plenty examples of workers securing above-infaltion pay rises)

As I said several times, some sectors will beat inflation, others will not, overall total wages will never beat inflation.

and isn't even addressing the example I was addressing,i.e. wage-led inflation where pay rise = price rise. It was claimed that workers in that case gain nothing. Yeah they do as a matter of arithmetic, albeit at the expense of other consumers.

Perhaps you are imagining strawmen to justify yourself. No, such was not claimed.

Most rich countries deliberately maintain a positive rate of inflation. I'm happy to leave any assertion to the contrary standing on its merits.

Rich countries deliberately

No, once again you have got the whole thing wrong. All economies reject deflation, in all the world in all of history.

If you think you can make a point, please do so. But simply throwing word-salads in the air in the hope some keywords will stick is just ridiculous, please.

And before you mix this one as well. Deflating inflation is not a bad thing at all but deflation to negative territory is an ominous sign of an economic depression. To be avoided like the plague.

[noemon]

@Saeko

This is the same macro-economic book that I studied in uni:

https://www.dvusd.org/cms/lib/AZ0190109 ... demand.pdf

A brief & concise explanation of supply, demand, prices, money supply, interest rates and their relationships.

[Saeko]

@Saeko

This is the same macro-economic book that I studied in uni:

https://www.dvusd.org/cms/lib/AZ0190109 ... demand.pdf

A brief & concise explanation of supply, demand, prices, money supply, interest rates and their relationships.

Yeah, I know, I took the same course.

[JohnRawls]

@Saeko

This is the same macro-economic book that I studied in uni:

https://www.dvusd.org/cms/lib/AZ0190109 ... demand.pdf

A brief & concise explanation of supply, demand, prices, money supply, interest rates and their relationships.

Inflation is good for only one group of people: Indebted. Or more specifically indebted with larger bargaining power with their employers. The asterisk here is that debt is in your own currency.

If you are not part of that group then inflation will always be bad.

[noemon]

Great, so to recap.

Currently, we are experiencing an inflationary crisis, a part of that crisis is external to us due to energy prices and global supply chain issues feeding into the spiral of price rises. We can do little about this other than going to war with Russia to finish them off an hour earlier and re-establish our commercial supply chains by force.

The homegrown forces that feed into the inflationary spiral are:

1) The money supply growing exponentially in the past few years.
2) Unemployment being too low causing wage-price spirals in several sectors.

Objectives:

Increase growth.
Lower the money supply.
Find workers to import to increase unemployment but without reducing growth(.ie without reducing existing productivity)

How do we increase growth when at the same time we need to lower the money supply?
That is the million dollar question isn't it?

@JohnRawls Yeap, I mentioned that earlier but I do not think that it is all the indebted it is mainly government debt rather than private debt that gets reduced in real terms because with government debt there are more drag factors(higher tax receipts and a larger pool of taxed people due to the drag factors pushing them into higher thresholds) that achieve that. For example 4.3 million workers paid 40% income tax in 2019, 6.2 million workers will pay 40% income tax this year, in the UK.

[ckaihatsu]

Inflation is good for only one group of people: Indebted. Or more specifically indebted with larger bargaining power with their employers. The asterisk here is that debt is in your own currency.

If you are not part of that group then inflation will always be bad.

Capitalism's inherent economic factionalism goes *deeper* than this.

To begin, either you *have* money (discretionary-income), or you *don't*.

If you [1] *do* have money, then your interests are with the continued and increasing *value* behind whatever given face-values -- appreciation. (*Less* additional value diluting the total pool.) (*Rentier* capital / non-productive / rewarded with interest and/or rent payments from the pre-existing economy.)

If you [2] *don't* have money, then your interests are for *cheap, easy* money, as with more *face-values* / currency, at cheaper terms, to be *flipped* into a higher-rate vehicle as rates rise overall. If employed, wages may become *money*, like pensions, which are then more-*propertied* interests, paradoxically. (*More* additional values streaming into the pool to create velocity.) (*Equity* capital / commodity-productive / rewarded with surplus labor value, possibly indefinitely.)


Social Production Worldview

Spoiler: show

[Potemkin]

Find workers to import to increase unemployment

The lunacy of capitalism summed up in one phrase.

[JohnRawls]

The lunacy of capitalism summed up in one phrase.

Is it though? It provides decent buffer against manpower shortages and increases the ability to expand when expansion is possible increasing the amount of goods and services within the society. You might argue here that it decreases the bargaining power of the workers since more are available, but as said before, harder work will always be paid more and easier work will always be paid less in a capitalist society. You yourself agreed just increasing wages to 1 000 000 solves nothing. This is what you are arguing, that worker shortages should persist and workers will have more bargaining power to increase their wealth indefinitely.

It also always baffled me why Communists find this particular thing bad. Some country is providing employment to people from other countries which probably have worse conditions. Isn't this a good thing and sort of like a "communist ideal"?

[ckaihatsu]

workers will have more bargaining power to increase their wealth indefinitely.

*Now* you're getting it -- ! (grin)

It also always baffled me why Communists find this particular thing bad. Some country is providing employment to people from other countries which probably have worse conditions. Isn't this a good thing and sort of like a "communist ideal"?

*This* communist is *all* for the workers trumping geography, in all its forms. (grin) (sorry) (grin)

[JohnRawls]

*Now* you're getting it -- ! (grin)





*This* communist is *all* for the workers trumping geography, in all its forms. (grin) (sorry) (grin)

Okay and? I do not understand what is your point? If total wealth of society is in goods and services then the size of wage is secondary, no? Standard of living is dependent on our access to goods and services in a very simplistic sense and money is just the medium through which we do it. If workers salaries increase faster than the wealth then this whole increase will just be adjusted by inflation and nothing will change. The situation will still remain the same that harder work will still be paid more and easier work will still be paid less just the number will get bigger for everyone. Come to think of it, nor it does encourage people to actually do harder work of sorts and gives the illusion that everything is okay.

In some sense you are arguing for stagnation both from motivational and economic side of things.

[noemon]

The lunacy of capitalism summed up in one phrase.

Maintaining minor resource reserves is capitalist now? It isn't. In Soviet Russia they knew all about maintaining reserves and stockpiles, especially of manpower. Quite the contrary Potemkin, capitalist countries tend to maintain very low reserves of everything instead relying on the market and are happy to submit themselves to market-punishment during shocks when they are left naked without manpower, gas reserves, petrol reserves, etcetera.

Not to worry mate, they go into benefits and register as employed in the books.

[noemon]

In some sense you are arguing for stagnation both from motivational and economic side of things.

Of course they are, in this thread alone the commies have argued for stagflation in several instances.

They simply revert back to that naturally due to their aversion to reality but perhaps mostly due to their plain ignorance.

[ckaihatsu]

Okay and? I do not understand what is your point? If total wealth of society is in goods and services then the size of wage is secondary, no? Standard of living is dependent on our access to goods and services in a very simplistic sense and money is just the medium through which we do it. If workers salaries increase faster than the wealth then this whole increase will just be adjusted by inflation and nothing will change. The situation will still remain the same that harder work will still be paid more and easier work will still be paid less just the number will get bigger for everyone. Come to think of it, nor it does encourage people to actually do harder work of sorts and gives the illusion that everything is okay.

In some sense you are arguing for stagnation both from motivational and economic side of things.

The 'total wealth of society' is in *infrastructure*, both 'public' / governmental, and private.

That's what all the fuss is about, ultimately -- the means of mass industrial production. The Industrial Revolution quickly outstripped society's combined form of social-organization, capitalism, and the *mismatch* has been that way ever since. *Socialism* / collectivization, is the more-appropriate approach for an *industrial*-driven political economy that produces a material *abundance* -- truly worldwide today, and globally integrated.

Labor *intrinsically* has its own collective interest in *controlling production*, meaning its own labor power, at the factory / workplace. *That's* the collective political 'motivation', instead of doing all that work for the sake of private equity, or whatever. 'Stagnation' applies to the whole capitalist economic system, and not necessarily to workers interests for a bigger slice of the pie, and for not-stagnation in their *wages*, as is happening *now* within the economic weather of increasing costs and *wage*-stagnation.


Social Production Worldview

Spoiler: show

Pies Must Line Up

Spoiler: show

[JohnRawls]

The 'total wealth of society' is in *infrastructure*, both 'public' / governmental, and private.

That's what all the fuss is about, ultimately -- the means of mass industrial production. The Industrial Revolution quickly outstripped society's combined form of social-organization, capitalism, and the *mismatch* has been that way ever since. *Socialism* / collectivization, is the more-appropriate approach for an *industrial*-driven political economy that produces a material *abundance* -- truly worldwide today, and globally integrated.

Labor *intrinsically* has its own collective interest in *controlling production*, meaning its own labor power, at the factory / workplace. *That's* the collective political 'motivation', instead of doing all that work for the sake of private equity, or whatever. 'Stagnation' applies to the whole capitalist economic system, and not necessarily to workers interests for a bigger slice of the pie, and for not-stagnation in their *wages*, as is happening *now* within the economic weather of increasing costs and *wage*-stagnation.


Social Production Worldview

Spoiler: show

Pies Must Line Up

Spoiler: show

Sure whatever if you wanna consider it like that. Building infrastructure is a service or product depending on what you building. Operating it is a service. You are not arguing for that though, you are arguing for increasing wages for everyone without increasing the need to use that infrastructure(demand for infrastructure) or increasing the amount(supple of infrastructure) of that infrastructure. You are actually arguing for expanding the money supply without increasing wealth while making building that infrastructure more and more costly at worst or keeping it the same in relative terms if all other industries catch up to your trickery.

So at best, nothing really changes and at worst, you are making it harder to generate wealth through infrastructure.

Then there is the argument that I said before. Communism has no idea what to do beyond that. Just building something without considering price, demand and supply is not going to work. It only works when you have man and women to move in to cities from rural areas to factories so you create demand by that process. But what exactly do you do when the minimums are met and people have additional things that they want or don't even know they want yet? After that it becomes very complicated at balancing cost-effectiveness, productivity, employing new methods of production, investment, r and d and so on. This is the modern economy at its core, at least for the Western countries.

Your suggesting a simplistic solution that might have worked if all lived in tribal societies. We just don't.

[ckaihatsu]

Sure whatever if you wanna consider it like that. Building infrastructure is a service or product depending on what you building.

Okay -- from *labor*, correct, with the labor-power being *commodified* by capitalism into the service or product -- ?

Operating it is a service. You are not arguing for that though, you are arguing for increasing wages for everyone without increasing the need to use that infrastructure(demand for infrastructure) or increasing the amount(supple of infrastructure) of that infrastructure.

Hey -- *surprise* me. *Increase* usage. Go nuts.

You are actually arguing for expanding the money supply without increasing wealth while making building that infrastructure more and more costly at worst or keeping it the same in relative terms if all other industries catch up to your trickery.

No, you're thinking of MMT and MMTers like SA. I'm, uh, just *auditing* this thread. (grin)

So at best, nothing really changes and at worst, you are making it harder to generate wealth through infrastructure.

The variable / calculation you're missing here is that of *the class divide*.

We can actually put the numbers *aside* for a moment and look at who / which-interests actually make the gears turn, and in which direction.

If you're so disinterested in the balance of class forces, as you seem to be, then please acknowledge that it's the *workers* who are the ones at the workplace, producing commodities, as you've noted.

Then there is the argument that I said before. Communism has no idea what to do beyond that. Just building something without considering price, demand and supply is not going to work. It only works when you have man and women to move in to cities from rural areas to factories so you create demand by that process. But what exactly do you do when the minimums are met and people have additional things that they want or don't even know they want yet? After that it becomes very complicated at balancing cost-effectiveness, productivity, employing new methods of production, investment, r and d and so on. This is the modern economy at its core, at least for the Western countries.

Your suggesting a simplistic solution that might have worked if all lived in tribal societies. We just don't.

No, actually, *my own* 'labor credits' / 'communist supply and demand' model is *modern* and treats the individual individually within its model-economy.

The labor credits help-out [...] by showing discrete, relative levels of support from the liberated laborers *themselves*, since labor credits in-hand indicate a person's past work done, giving them the fractional authority to select *specific* available-and-willing liberated-workers for new labor efforts, for policy-package-designated work roles, and for the detailed scheduling of those work roles, going-forward. Yet the labor credits are *still* not money, because the market of exchange values is no longer required for the material-economic function of discerning (organic) demand, whether large or small.

https://web.archive.org/web/20201211050 ... ?p=2889338

[JohnRawls]

Okay -- from *labor*, correct, with the labor-power being *commodified* by capitalism into the service or product -- ?





Hey -- *surprise* me. *Increase* usage. Go nuts.





No, you're thinking of MMT and MMTers like SA. I'm, uh, just *auditing* this thread. (grin)





The variable / calculation you're missing here is that of *the class divide*.

We can actually put the numbers *aside* for a moment and look at who / which-interests actually make the gears turn, and in which direction.

If you're so disinterested in the balance of class forces, as you seem to be, then please acknowledge that it's the *workers* who are the ones at the workplace, producing commodities, as you've noted.





No, actually, *my own* 'labor credits' / 'communist supply and demand' model is *modern* and treats the individual individually within its model-economy.

Creating something will not create automatic demand for it unless the product didn't exist before. There is a limit at how much infrastructure is needed.

[ckaihatsu]

Creating something will not create automatic demand for it unless the product didn't exist before. There is a limit at how much infrastructure is needed.

Certainly, and that's what civil-society is *for* -- or *should*-be-for, anyway.

You're implying a critique of bureaucratic centralism, and I *got* you there -- Stalinist 'bureaucracy' implies 'specialized standing separatist administration', which is problematic in *any* variation because it's a structural *schism* within the post-commodified 'liberated labor' population, post-capitalism.

*Truly* post-capitalist, post-commodified labor would have a collective, respective 'co-administration' component as an inherent 'add-on' complementary portion of *any* social work role, *over* the work role itself, in coordination with everyone else -- as *I* think of it.

[T]he layout of *work roles* would be the 'bottom' of 'top-down' (though collectivized) social planning, and would be the 'top' of 'bottom-up' processes like individual self-determination.

http://www.revleft.com/vb/threads/19...29#post2879529


If a standing, specialized administrative body / *institution* is used, that practice would encourage elitism and would *not* be a direct bottom-up inputting of mass sentiment into the collective decision-making process.

If different distinct factions *competed* like teams over the control of this-or-that project, that would just be the same as 'turf' and patronage networks that we have today, under capitalism, resembling feudalism.

My model framework, instead, allows *proposals* and (finalized or less-than-finalized) *policy packages* to compete, at a daily pace of updates / iterations, so that the focus is always on objective *material* factors, instead of on relatively-arbitrary *groupthink*, individual careerisms, and inter-group competition over turf and control. The use of individually-prioritized daily demands ranking lists enables a fine-grain distinction on the whole between Policy Package 'A' and Policy Package 'B', amid any and all others. If people feel that Policy Package A doesn't include a sufficient number of work roles for the task at hand, they may flock to Policy Package B, which features 50% more work roles, for better overall quality, possibly requiring a greater funding of labor credits for those willing to step into those numerically larger, socially-required work role positions.

[Steve_American]

Come on mate, what you said applies mainly to no 2. After all what happens to the income that these workers do not use for expenditure?


How? :?:


Catching up to inflation with wage rises is zero-sum for a given amount of available goods, services and people.

You never manage to catch up because wage rises are a subset cause of inflation. The more a company increases its wage cost the more it increases its prices, and moreover the domino effect is multiplying every time there is a price rise in the mix.

Genuinely mate, people need to seriously understand that it is not possible to catch up to inflation and that it never has been possible. It is a self-defeating exercise called stagflation which is even worse than high inflation. If you want to save yourself from inflation you need to tame it and bring it back down decisively. Playing catch up with it merely aggravates its cascade and provides more energy to the snowball.



Potemkin merely said that real wealth is the total value of good and services, which means that growing the total wealth is the only way out of this predicament and not by redistributing existing wealth. Potemkin said the most conservative thing one can possibly say.

In a recession or period when the economy is slow, increasing the production of goods and services would be a great thing to do. However, capitalists will never do that in a recession, because there is not enough demand to absorb the current production. So, capitalists will never invest to increase production of a thing that they either can't sell or can only sell at a price less than the current price.

This why Keynes proposed deficit spending in a recession or depression. Only by the Gov. increasing demand directly by buying stuff or indirectly by providing money to people (by hiring them or giving them the cash) will capitalists increase production in a recession.

In the past, starting a war was a good excuse for a Gov. to start deficit spending and hiring men into the army.

Two days ago I saw a video where he said that Hitler in 1 year ended unemployment by massive deficit spending to build up the military for the coming war and he didn't have inflation because he kept wages and prices from increasing with laws or jawboning. He had enough power to jawbone effectively.
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