Thank you for your warm reply, Hari, yes, I agree with you on the point that Flassbeck and Lapavitsas are wrong on inflation, and no, I can't remember Marx argueing that money supply is the main driver of inflation (change of market prices during and across industrial cycles). It remains to be seen whether the current "quantitative easing" of the ECB (EUR 1100 billion for buying bonds up to autumn 2016) will have any effect on the current deflationary tendencies within the Euro area.
Regarding different causes of inflation I'd like to recommand Krüger, Stephan (2012): Politische Ökonomie des Geldes. Gold, Währung, Zentralbankpolitik und Preise [Political Economy of Money. Gold, Currency, Central Bank Policy, and Prices] - no English translation available yet], especially part four: Prices - inflation and deflation. data: http://d-nb.info/1009779990 contents: http://d-nb.info/1009779990/04 abstract and preface: http://www.vsa-verlag.de/nc/detail/artikel/politische-oekonomie-des-geldes/ I'd like to add some political remarks. Flassbeck - http://www.flassbeck-economics.de/ - and Lapavitsas - http://www.researchonmoneyandfinance.org/index.php/component/finder/search?q=costas+lapavitsas - used their argument "unit labour costs, not the money supply, are the main determinant of inflation for the union as a whole, as well as for its national entities" as a reason for their conclusion, that the break-up of the Euro area (and hence the institutions of the European Union to some extent) is their preferred alternative for overcoming the economic, social, and political crises in Europe. "Indeed, as the economic costs of membership are increasing and the benefits shrinking, several countries have to consider the exit option." [p. 37] "Many people still dream of a politically fully unified Europe that would help overcome the difficulties currently faced by EMU. In our view that dream should not guide politics. Given the obvious inability of the European institutions to appropriately manage the currency union, realistic observers have to admit that currency union was too ambitious a goal. The attempt to advance more rapidly on the way towards political union by means of a currency union has not worked out. Now, paradoxically, Europe has to retreat if it is to progress again." [p. 38] As far as I know comrade Lapavitsas is still pleading that Greece should leave the Euro area - in contrary to the position of Milios, Varoufakis, et al. F&L's paper got a certain political importance when Oskar Lafontaine and Sahra Wagenknecht picked up F&L's argument in advance of the German Left Party's Congress in 2013, due to adopt the manifesto for the 2014 European elections. At the end both Lafontaine and Wagenknecht - and the supporting current "anticapitalist platform" - moved back and did not submit their motion to the delegates. At the end delegates adopted a distinct pro-European manifesto. A summary of what was at stake theoretically and politically can be read here: http://www.sozialismus.de/fileadmin/users/sozialismus/pdf/Sozialismus_Heft_06_2013_Bischoff_Radke_Europa.pdf The outcome of the Congress was a precondition for the rather good election result of the German Left Party (DIE LINKE), and just as important, a clear demarcation line against the emerging right populist party AfD ("Alternative for Germany"). Both Syriza and the Left Party are part of the current faction of left and green parties in the European Parliament: http://www.guengl.eu/ It remains to be seen to what extent this Parliamentary Group can support the new Greek government and its goal to renegotiate the "standby arrangements". Sometimes even references involve political implications of some significance. Hinrich hari kumar wrote: > > Thank you very much for these references. Very useful mine of 'facts' > rather than opinions. > > Admittedly, I do have to spend a lot more time than I have done so far > on them. However in one document from the Rosa Luxemburg Institute, it > is stated by Flassbeck & Lapavitsas (F & L): > > "With open eyes and without ideologi- cal barriers the ECB would have > found early on that unit labour costs, not the money supply, are the > main de- terminant of inflation for the union as a whole, as well as > for its national entities. > >From p.16 : In: > Flassbeck, Heiner; Lapavitsas, Costas (2013): The Systemic Crisis of the Euro > - > True Causes and Effective Therapies. > http://www.rosalux.de/news/39476/flassbecklapavitsas-studie-the-systemic-crisis-of-the-euro-true-causes-and-effective-therapie.html > > My question to you and all on the list may be viewed as naive - nonetheless: > I had always understood that it was indeed the money supply driving > inflation. Indeed as I recall it in prior writings that Marx had also > believed that. > What am I missing? Is the view expressed by F & L - in fact correct? > > Thanks in advance for your views. > Hari Kumar _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
