The Capitalist System is the whole cause of higher food prices and inflation

[LeninistKing]

THE CAPITALIST SYSTEM IS THE REAL CAUSE OF HIGHER FOOD PRICES AND INFLATION IN USA. DONT TRUST THE US GOVERNMENT, THE FEDERAL RESERVE AND THE WHOLE CAPITALISM SYSTEM !!


Don't trust the Federal Reserve, or the US Government, or the whole capitalist system. Because we've seen what they're doing. We see who they are really working for.

If we don’t trust, then we need to find a different path than conventional strategies. You need to try some entirely different strategies, and the path to those strategies is education.

The first step down that educational path is to come to understand what the Federal Reserve and Wall Street already know quite well, even if the general public does not. Inflation does not destroy wealth for a nation as a whole. Inflation redistributes wealth within a nation.

And if we have a massive round of inflation what may very well happen is that most of the country does indeed lose most of its wealth – but it’s crucial to understand that wealth is not destroyed.

Instead, the wealth is redistributed to the monopoly-capitalist class within the United States of America.

Do you know how that works? Think you should?

Read widely socialist books. Join socialist movements and socialist parties. Find new sources. Explore new concepts. Challenge your assumptions and beliefs. The world is not a fair place, and strategies that appear to be safely in the mainstream media might only bring victim status.

And remember: Let other people you know learn about socialism! Spread the word... the more people who know the truth, the greater the force against the capitalist system! Resistance forever!

Here are a good links toward the introduction of socialist ideology (The only solution for the United States):


http://www.socialistviewpoint.org
http://www.ifamericansknew.org
http://www.stopaipac.org
http://www.socialistworld.org
http://www.socialistaction.org
http://www.rwor.org
http://www.socialist.net
http://www.socialistworker.org
http://www.workers.org
http://www.venezuelanalysis.com
http://www.trotsky.net
http://www.marxists.org
http://www.socialisappeal.org
http://www.marxist.com
http://www.wsws.org
http://www.socialistalternative.org
http://www.permanent-revolution.org/


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AND REMEMBER TO STICK UP YOUR MIDDLE FINGER TO US, EUROPEAN, NATO, ISRAEL AND WORLD IMPERIALISM AND CAPITALIST OPPRESSION !!


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[Klaatu]

Recommended to me by a friend today at the college - helpful?

The Deep Capture Analysis - by Patrick Byrne
http://www.deepcapture.com/introduction-to-the-deep-capture-analysis/

John Paulson and the Greatest Pump and Short Fraud Ever
http://www.deepcapture.com/john-paulson-and-the-greatest-pump-and-short-fraud-ever/

[LeninistKing]

Hey my friend, thanx a lot for those 2 links, i will take a look at them and share it with other socialist friends i have

.



Recommended to me by a friend today at the college - helpful?

The Deep Capture Analysis - by Patrick Byrne
http://www.deepcapture.com/introduction-to-the-deep-capture-analysis/

John Paulson and the Greatest Pump and Short Fraud Ever
http://www.deepcapture.com/john-paulson-and-the-greatest-pump-and-short-fraud-ever/

[robbo203]

In a sense this is a bit of a ridiculous assertion - that capitalism is the cause of high food prices and inflation. It is certainly the context in which we experience these things but the cause?? Not so. There have been periods in recent history when prices dropped - when there was "deflation". But you still had capitalism then. So why prices not go up then but instead fell?

Actually the real reason why the general price level can change has to do with the amount of inconvertible currency ciruclating in the economy and the rate at which it circulates. Check out this article below from http://www.worldsocialism.org/spgb/pdf/me.pdf


Inflation: the theories and the facts
ALONG WITH EXPLAINING what inflation is and why it happens, another question
presents itself today. Why is is that a problem fairly widely understood half a century
ago now completely baffles the majority of politicians and economists? Some of them
admit that as far as they are concerned it is inexplicable and incurable; others offer
explanations which a look at past inflations would show to be quite untenable. And now
we have psychologists telling us it is not just an economic problem but is to be
explained as indicative of a deep-rooted dissatisfaction with life.
A few facts show the irrelevance of most of the theories of inflation now current.
Past inflations have always been halted when governments decided to halt them,
and British capitalism operated continuously for a century before 1914 without
any inflation at all. Are we to seriously believe that it was a century of
"satisfaction with life" on the part of the workers? And what of the ten years 1921-
31 when prices were not rising but falling, and the workers showed their
"satisfaction" by the General Strike?
Understanding inflation may not be particularly easy, but most of the difficulty is the
confusion introduced into it by economists. An economics handbook published in 1969
defined inflation in terms of its cause, depreciation of the currency: "high prices caused
by an over-issue of inconvertible paper money". That is how Marx and many other
economists correctly explained inflation, but nowadays most economists attempt to
explain it in terms of its symptoms not its cause.
They talk about two kinds of inflation, "cost-push or wage-push" and "demand-pull", the
one pushing prices up and the other pulling them up. That is about as useful a concept
as Dr.Doolittle's famous circus animal the Pushmi-Pullyu which had a head at both
ends. (It would appear that the economists' monster has both heads at the same end
but, like Dr.Doolittle's, they mostly take control alternately and not both at the same
time.)
If a general price rise had not been caused by currency depreciation its "cost" and
"demand" symptoms would also not be there; which is not to say that individual and
general price rises cannot happen for causes other than inflation. In the period 1820-
1914 in this country, when there was no currency depreciation and therefore no
inflation, there were alternate comparatively small falls and rises of the price level in
depressions and booms. But it never once rose above the level of 1820 whereas, with
inflation, the present price level is about six times what it was in 1938.
General price rises due to currency depreciation were known in previous centuries, but
it was a mark of 19thcentury British capitalism that, by deliberate government policy,
prices were kept comparatively stable by the avoidance of inflation. It did not stop the
growth of production and wages.
Marx dealt with one aspect of price changes in his lecture published in the pamphlet

Value, Price and Profit

, where he examined the erroneous proposition that wage

increases cause a general price rise; but he did not there deal with currency
depreciation or inflation. On the contrary, as he pointed out, he was dealing with the
situation as it existed in Britain when there was no inflation. He was therefore assuming
for his purpose no change whatever "in the value of the money wherein the values of
products are estimated".
His examination of inflation is in Capital, Volume 1, in the chapter "Money, or the
Circulation of Commodities" where he put forward the proposition, based on his labour
theory of value, that the excess issue of an inconvertible paper currency puts up prices.
J.M.Keynes in his Tract on Monetary Reform (1923, pages 42-3) gives a similar
explanation. Marx pointed out that beyond a certain point an excess issue of notes will
result in money "falling into general disrepute". Keynes, in the work referred to, dealt
with the way this condition of general disrepute developed in Germany in the great
inflation of the nineteen-twenties. Professor Edwin Cannan, without using the labour
theory of value, reached much the same conclusion from observation of what actually
happens (Modern Currency and the Regulation of its Value, 1931).
It should be noted that Carman, like Marx, dealt with "currency" (notes and coin). Some
modern "monetarists" have introduced more confusion by trying to base their theories
on "money" defined to include bank deposits as well as notes and coin.
What must be emphasised is that inflation is caused by those who control the
note issue, which in this country is the Government through the Bank of England.
It is often used in wartime because it is a speedy way of increasing government
revenue to meet additional war expenditure. In Germany in the nineteen-twenties,
in peace-time, it was a deliberate device (backed by big business) to pay off debts
in depreciated currency: inflation, at least in the short term, serves the interest of
debtors against lenders.
MARX AND INFLATION
Marx's treatment started with the economic law that the use of a particular commodity to
serve as the money commodity, e.g. gold or silver, rests on the fact that that commodity
like all other commodities is an embodiment of value, the amount of "socially necessary
labour" required to produce it. If for example one ounce of gold and one bicycle each
require ten hours' labour they are equal values, and gold can serve as the "universal
equivalent" for the exchange of all other commodities.
The conversion of value into price takes place through the minting of coins of uniform
weight and purity. In Britain each £ or sovereign was, by law, fixed at a uniform weight
of gold (about a quarter of an ounce). So the bicycle's price would be about £4 because
its value was equal to that of one ounce of gold. If the British government had fixed the
£ at one-eighth of an ounce of gold instead of one-quarter, the bicycle's price would
have been £8 not £4 and all prices would similarly have been doubled. If they had fixed
it at half an ounce, all prices would have been halved. On both suppositions, while the
price of the bicycle (or other commodity) would have been doubled or halved, its relation
to an ounce of gold would have remained unaltered.
The next stage in Marxian monetary theory was based on the proposition, confirmed by
long experience, that with a given total volume of production and buying-and-selling
transactions, and with gold minted into the £ or sovereign at about a quarter-ounce, a
certain total amount of currency would be needed. (The fact that the required total
varies from time to time with the velocity of circulation need not be gone into.) What
Marx put forward was that the total value of needed currency represented a total mass
of value, and therefore a total weight. of gold, and that if the total of gold is replaced
by inconvertible paper money and the paper money is then issued in excess, prices will
go up.
If the paper money is in excess, if there is more of it than represents the amount of gold
coins of like denomination which could actually be current, it will (apart from the danger
of falling into general disrepute) represent only that quantity of gold, which, in
accordance with the laws of circulation of commodities, is really required and is alone
capable of being represented by paper. If the quantity of paper money issued is, for
instance, double what it ought to be, then in actual fact one pound has become the
money name of about one-eighth of an ounce of gold instead of about one-quarter of an
ounce. The effect is the same as if an alteration had taken place in the function of gold
as a standard of prices. The values previously expressed by the price £1 will now be
expressed by the price £2.
(


Capital Vol. I, page 108 in Allen & Unwin edn.)

Long experience has shown that Marx was right. Whatever inconvertible paper money
has been issued in excess for a considerable period it has raised prices above what
they would otherwise be.
In Britain the amount of notes in circulation in 1938 was £554 millions. It is now about
£5,330 millions. Since 1938 the needed amount has been affected by certain changes,
including greater total production (now more than double the 1938 level), and increased
population, which would operate to raise the needed amount of currency. Working in the
opposite direction has been the wider use of cheques, etc. and corresponding reduced
need for notes and coin.
In the 19th century the issue of notes in excess amount was effectively prevented by
law. Beyond a small fixed amount the Bank of England could only expand the note
issue by placing an equivalent amount of gold in its reserve, and the paper was tied to
gold by the requirement of "convertibility" - that is to say, the Bank of England was
compelled by law to give gold in return for notes at the legally fixed rate of about onequarter
ounce for each £l. Except for marginal variations the value represented by Bank
of England notes could not be different from the value of gold. Bank of England notes
"were as good as gold" and were everywhere accepted as such. Now there is no
convertibility, and in effect no restriction on the note issue.
A TWO-WAY FALLACY
The man largely responsible for the adoption of inflation as government policy (they now
call it "reflation") was the economist J.M. Keynes. Yet he did not knowingly and
intentionally advocate inflation as a long-term policy. (There were some people who did
just that.) What Keynes did was to say that if certain other things were looked after it
was no longer necessary formally to restrict the note issue:
Thus the tendency of today - rightly I think - is to watch and to control the creation of
credit and to let the creation of currency follow suit, rather than, as formerly, to watch
and control the creation of currency and to let the creation of credit follow suit.
Professor Cannan promptly warned that the doctrine was basically unsound and would
open the door to inflation. See Economic Journal, March 1924, and Cannan's An
Economist's Protest


, 1927, pages 370-384. Keynes's views won the day and came to

be accepted by the Tory Party and Labour Party and by the trade unions, not only as
monetary theory but because Keynes put them forward as part of his popular "full
employment" doctrine.
This doctrine was formally set out by the Tory, Labour and Liberal wartime government
in 1944 in the White paper Employment Policy. It was cautiously phrased but was
immediately followed by a more crude interpretation drawn up by the Labour Party in
Full Employment and Finance Policy


. Here it was laid down that if unemployment

threatened "we should at once increase expenditure, both on consumption and on
development - i.e. both on consumer goods and capital goods. We should give people
more money and not less to spend. If need be we should borrow to cover government
expenditure. We need not aim at balancing the budget year by year."
It is the Labour Party version that has been followed by Tory and Labour
governments, particularly in the past decade. It has included hoping for a much
lower level of unemployment than even Keynes thought possible - and part of the
belief has beenthe idea that increased spending increases production -
something which events show to be true, if at all, only for a short period.
The fallacy of the theory is well illustrated from the period 1965-72. In that period annual
consumer spending jumped from £22,943m. in 1965 to £39,263m. in 1972, an increase
of 70 per cent. In the same period registered unemployment jumped from 360,000 to
943,000 and production went up by only 17'/2 per ent. The principal result was that
prices rose by 47 per cent.
The policy is still being operated. One of the few forecasts about the present Labour
government that has proved correct was that made by the late Richard Crossman,
former minister in a Labour government, that the rate of inflation would be increased
(Times, 12th Sept., 1973).
There are two ways in which currency depreciation can be operated, the direct way
used by the German government in the 'twenties and the more indirect way used in
Britain. Professor F.W. Paish summarised them:
In some countries it [the Government] might simply print more notes and use them to
pay for its expenditure. Nowadays, in such a country as Great Britain, the government
would borrow from the banks, printing more notes to enable the banks to maintain their
cash reserves.
(Benham's Economics, 1967, p. 465)
The additional notes and coin get into circulation through the joint-stock banks (Lloyds,
NatWest, etc.) which bank with the Bank of England.
These banks withdraw notes and coin from the Bank of England and in turn the
additional notes and coin reach the individuals, shopkeepers and employers who make
withdrawals in that form from their deposits with the banks. The note issues are set out
in the Bank of England's Weekly Return. In the week ended 24th July 1974 there was
an increase in the notes in circulation by £52,193,306 tot a total of £5,098,767,831.
Many economists and politicians would be happy to see inflation going on indefinitely in
the belief that it keeps unemployment down. But whatever happens with moderate
inflation, even they cannot ignore that when inflation gets to the point that money falls
into "general disrepute", unemployment multiplies. In Germany in 1923, unemployment
was 4.2 per cent with another 12.6 per cent partially unemployed. Within the year it had
jumped to 28.2 per cent and 42 per cent respectively, representing together over
5 million workers in receipt of unemployment pay and an unknown larger number not
receiving relief. At this point the German government called a halt by replacing the
notes by a new gold-backed currency.
Realisation of this danger here has induced some politicians and economists to call for
the limitation of the note issue. In 1968 the Editor of The Times (15th October)
described the idea that price rises could be checked "by printing fewer notes" as a
"crude error". Now the Editor, Mr. Rees-Mogg, has been converted and is urging a
return to the gold standard (Times, 1st May 1974).
But at the same time they are fearful that the drastic action of entirely stopping the
increase of the note issue would, as in 1920, bring prices down but be accompanied by
a big increase in unemployment. So the line taken by one group of economists is to call
for a gradual reduction in the rate at which inflation is increasing. Professor A.A. Walters
of the London School of Economics is urging that such a slackening should be spread
over three years (Money and Inflation, Aims of Industry 1974, and Times, 23rd July
1974).
It only remains to point to the difference between Marx and other economists.
Marx was simply describing how capitalism operates, with inflation and without it.
He was not saying, as did Cannan, that it is better to run capitalism without
inflation, or saying like Keynes that a "full employment" policy will improve and
save capitalism.
In Marx's view capitalism inevitably produces unemployment and crises. For him
the task of the workers is to abolish capitalism and replace it with Socialism, in
which problems of prices, inflation, crises and unemployment will not exist.
(September 1974)

[Klaatu]

The whole thing is not all that complicated, basically. In a nutshell, this is
how inflation works, and why it happens:

Consider a very small island, with 10 shipwrecked inhabitants. They have
trade with each other. One is a baker, one is a farmer, one builds the huts,
etc, everyone sells their talent to the others.

They invent a monetary system (one rare seashell = one dollar) Every
person has one "dollar." (just to keep the math simple here)

Now suppose another person joins the group (he floats in from the sea)
Now everyone must share their money (like the good socialists they are)
but that means that everyone is now poorer (each now only owns 91 cents.)
This also reduces trade (since everyone has less money to spend)

The better solution would be find one more seashell (worth exactly one
dollar) to give to the new comer, so that he too, can trade with the group.
Now everything is back to an even keel.

But suppose, we added not one, but two, seashells to this economy. Now
everyone has one dollar plus an extra 11 cents. What does this do? It allows
everyone to raise their prices by 11 percent. And they will raise them,
because their own "costs" have jumped 11 percent (a phenomenon isn't it)

Increasing population necessitates increasing the supply of money, but
increase that supply too much, and prices naturally rise. Too much inflation
of money supply allows prices to rise, uncontrolled. Too little, and recession
and stagnation result.

[Manifesto]

I don't remember where I heard this but is it true that milk companies dump most of the milk in order to raise the prices?

[robbo203]

Increasing population necessitates increasing the supply of money, but
increase that supply too much, and prices naturally rise. Too much inflation
of money supply allows prices to rise, uncontrolled. Too little, and recession
and stagnation result.

Partly correct, partly incorrect. Recession is not the consequence of insufficient money supply. This is the fallacy of underconsumptionism theories like Keynesianism. If it were true, inflation would eliminate recessions and you wouldnt have such a thing as "stagflation". Recesions are the result of disproportionate growth within capitalism not the lack of money to buy goods with

[Klaatu]

Recession is not the consequence of insufficient money supply.

But it can be, at least in part. For example, (this has happened many times in the
past 40 years: 1973, 1979, 1990, and 2006) oil prices spike, and then, not only
does it cost more to fuel up your car, (and other forms of transport) but everything
else rises too: It costs more money for fuel to ship products to market, it costs more
to make plastics, dyes, pharmaceuticals, (or anything made from petroleum)
The original fuel price shock ripples through the entire economy, since everything
is ultimately tied to energy.

In a sense, "insufficient money supply" indeed is the cause of slowdown, insufficient
not so much because of lagging governmental "money creation." Rather it is the "upward
price pressure" which creates an effect of "insufficient" money supply. That is to say,
there is only enough money to pay the higher prices demanded. In other words, people
have to pay higher prices for everything, therefore there is lack of (their) money available
to buy other things, like a new car or new stereo. Hence slowdown.

Thus the ultimate result of the oil price shock (I call it a "shockwave") can be stagnation or recession.

As proof of this, bear in mind that every recession since 1970 has been in the immediate wake of
a sudden drastic increase in the world price of oil.