Inflation and Business: The capitalization process
DOI:
https://doi.org/10.22370/pe.2024.17.4697Keywords:
inflation, stagflation, money, capitalism, VeblenAbstract
Contrary to what monetarism postulates, inflation is not, in essence, a monetary phenomenon. Nor does it have its ultimate roots in supply shocks that raise production costs. Inflation is, in fact, a structural phenomenon inherent to capitalism and is accompanied by low levels, or stagnation, of production. The capitalist system is animated by the drive to make a pecuniary profit: to capitalize investment. This is what Veblen defined as business. The prerogatives of business, however, founded on the power given by property, oppose industrial efficiency and rather demand its sabotage. The practice of inflating prices is but an ultimate consequence of this very condition of capitalization.
Keywords: inflation, stagflation, money, capitalism, Veblen.
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