> "The New Zealand economist Bill Phillips, in his 1958 paper "The
> relationship between unemployment and the rate of change of _money
> wages_(emphasis added -CB) in the UK 1861-1957" published in Economica,
observed an inverse relationship between_money wage_ changes and>
unemployment in the British economy over the period
> examined."
>
> On capitalists raising prices when wages go up, that is what Citizen
Weston> was arguing and Marx was replying to in _Value,Price and Profit_.
Prices> need not go up, if profits go down...
Jim D: Marx was right, under the gold standard (which prevailed at the
time), which prevents any price inflation. Nowadays, prices may or may not
rise with money wages, but capitalists have much more control over prices
than under the gold standard. Currently, it's import and export competition
(along with the dollar exchange rate) which determines how much power the
businesses have over prices.
^^^^
CB: A couple of questions:
How does going off the gold standard give capitalists more control over
prices ?
My impression on inflation is that capitalists like some price rises and
dislike others. Or maybe some capitalists like some types and some dislike
some types. Capitalists like price rises for their sales, but then Creditor
Capitalists lose profit on interest from general inflation. Also, maybe, in
sales between capitalists, the buyers don't want higher prices.
Anyway, if true, this seemingly would complicate how "capitalists" would use
their greater control of prices in the non-gold standard system.
Jim : what works empirically may change. For example, to many
economists("monetarists") in the 1970s, it looked as if one could easily
control inflation by restricting the growth of the money supply (based on an
empirical generalization). But then when Volcker applied this advice,the
empirical generalization began to break down.
^^^^^
CB: Did the Phillips Curve empirical generalization really stop working , or
did economists (Friedman ?) who didn't like that it (seemingly) was so pro
working class , uhhh, falsely claim that it was no longer valid ?
Secondly, could the configuration of economies cause the Phillips Curve to
become empirically valid again sometime, ( assuming it was not valid for a
while) ?
I'm sort of amazed at all these economic ideas and schools that come and go
over the years. Can it really be that Keynesianism was only valid for the
time it was in vogue ? How could Samuelson, and neo-classical synthesis be
the prevailing or a main theory , and now it is just passe ? Wasn't it
Friedman (!) who said "we are all Keynesians now" and then seemingly it is
he who started the ball rolling to end the Keynesian dominance. It's hard to
understand how each period can be so "empirically" unique from all others.
I have to suspect that there is _political_economy still, but the politics
is not admitted. It's very suspicious that Friedman began the "invalidation"
of a school of economics that clearly seems relatively much more pro working
class than his thinking and what follows. And then economists say that
Friedman theories are passe. Well, if they are passe, why isn't Keynesianism
reinvigorated ?
^^^^^^
Jim: Price control made more sense in the 1970s than it does today, because
more domestic markets were oligopolized then than now.
^^^^
CB: In auto, has the reduction in oligopoly been by entry of foreign "big
biznesses" ?
Why does price control make more sense with more oligopoly ?
More later after I study what follows more
^^^^^
