Authors: Andrew Trigg
Addresses: Department of Economics, Faculty of Social Sciences, The Open University, Walton Hall, Milton Keynes, MK7 6AA, UK
Abstract: The whole corpus of the economic establishment has reached a consensus that independent central banks should target inflation. Using the base rate of interest, aggregate demand should be set to ensure that there is an equilibrium level of employment and unemployment. The upshot is that any attempts either by workers to increase wages, or by government to stimulate higher employment, are futile - resulting in spiralling wage and price inflation. In this paper, a Marxian critique of inflation targeting is suggested. Using Marx's theory of exploitation, wage labour can be shown to eat into the vast pool of profits, without any impact on inflation.
Keywords: inflation targeting; class conflict; Marxian critique; Marx; new Keynesian; Marxist economics; spiralling wages; price inflation; interest base rate; central banks; employment; unemployment; theory of exploitation.
International Journal of Pluralism and Economics Education, 2013 Vol.4 No.3, pp.274 - 281
Received: 08 May 2021
Accepted: 12 May 2021
Published online: 11 Dec 2013 *