[OPE-L:6282] RE: Historical, real and current costs

andrew kliman (Andrew_Kliman@CLASSIC.MSN.COM)
Sun, 15 Mar 98 20:03:53 UT

A reply to the PIAF:

From: owner-ope-l@galaxy.csuchico.edu on behalf of aramos@aramos.bo
Sent: Sunday, March 15, 1998 2:09 PM
To: ope-l@galaxy.csuchico.edu
Cc: Multiple recipients of list
Subject: [OPE-L] Historical, real and current costs

"1. Do you think that a possible cause of deflation is a reduction in the
issue of paper money by the Central Bank?"

Yes, at least temporarily. There are certain practical and institutional
limitations on how much and how rapidly the velocity of circulation can
change. The answer also depends on how well developed debt relations are.

"2. Why do you think that the New Interpretation people could be reluctant to
accept the reasoning in terms of deflation/inflation?
In some sense this kind of reasoning is almost "common sense" in "Economics"."

This is an excellent question. It does seem that it would be self-evident to
an economist that deflation is occurring and that one needs to adjust the
sales revenue in order to compute real profit.

I'd rather not speculate here about why the "New Interpretation people" and
other proponents of the simultaneist MELT are reluctant to accept this
reasoning. Many of them are on this list, and they can speak for themselves.

"John Cassidy''s article ... [contains] a big mistake, attributing Marx''s
theory an "internal inconsistency", something that many Marxists consider a
"minor point", although it has an enormous impact on the common


But do you really think anyone actually considers this a minor point?


Andrew Kliman