Labor, inflation & the gold standard

I'm not sure if you are familiar with Mark Blythe. His work is gaining popularity in light of the failure and perpetuation of Austerity policies in Europe and the USA. He draws an interesting correlation between labor and stagflation. Basically that the inflation of the 70's was a result of Keynesian policy; the government targeting full employment empowering unions and driving up wages, stimulating a reactionary price hike in the value of commodities. This stagflation then led to the knee jerk Neo-liberal policies that focused on minimizing inflation and completely ignored employment. Stagnating wages resulted in deficit spending both in public spending and individual households. His solution to the current crisis seems to fall in line with the Bernie platform. Single payer healthcare, free college education etc. I understand that as a Marxist, you believe that it is naive to assume that there is any one factor that drives economic change, however I found this correlation to be very compelling as it illuminates the conflicts of and trials of capitalism for both Keynesian and Neo-classical models. In a society divided by class even when Labor is in a position of power, their advantage can be systemically undermined by manipulation of the value of currency. Do you think that this correlation exists? In relation to currency manipulation (which Adam Smith himself acknowledged), did unpinning the dollar from the Gold Standard make manipulation like this easier? It appears to me that interest, in terms of Macroeconomics was not a factor until post WW2.

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  • Dustin James
    tagged this with upvote 2017-12-22 18:35:28 -0500
  • Nicholas Anderson
    published this page in Ask Prof. Wolff 2017-12-19 21:29:54 -0500