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Why Problems Do Not Go Away: The Case of Inflation

Published online by Cambridge University Press:  03 March 2009

Elias H. Tuma
Elias H. Tuma
Affiliation:
Professor of Economics, University of California, Davis, CA 95616
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Abstract

Problems persist despite efforts to solve them because those efforts are irrelevant, inadequate, or unsupported. A behavioral structure consisting of the philosophy of the system in which the problem resides, its institutions, administration, and the operation that implements its policies is devised to analyze persistent problems such as inequality, underdevelopment, and inflation. As a chronic problem in the United States and other capitalist economies, inflation reflects a contradiction within the behavioral structure. Its resolution requires reinstatement of perfect competition, which is improbable, or change of the philosophy, which is revolutionary and equally improbable; hence, inflation will persist regardless of the measures taken against it.

Type
Papers Presented at the Fortieth Annual Meeting of the Economic History Association
Information
The Journal of Economic History , Volume 41 , Issue 1 , March 1981 , pp. 21 - 28
Copyright
Copyright © The Economic History Association 1981

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References

1 The philosophy concept proposed here may have certain similarities to other sociological and economic concepts of society. Other concepts are included in works by Smelser, Neil J., Theory of Collective Behavior (New York, 1963);Google ScholarEisenstadt, S. N., Revolution and the Transformation of Societies (New York, 1978);Google ScholarLyman, S. M. and Scott, Marvin B., The Drama of Social Reality (New York, 1975), ch. 6;Google ScholarRothman, S., “Barrington Moore and the Dialectics of Revolution: An Essay Review,” American Political Science Review, 64 (03 1970), 61–82;Google ScholarKramnick, Isaac, “Reflections on Revolution: Definition and Explanation in Recent Scholarship,” History and Theory, 11, no. 1 (1970);Google ScholarDavis, Lance and North, Douglass, Institutional Change and American Economic Growth (Cambridge, 1971).Google Scholar

2 Reports of increasing profits, even those put out by the corporations, are sometimes disputed by the public institutions, as if the corporations would care to overestimate their net incomes.

3 One “radical” potentially effective set of measures to do away with inflation might be to institute price controls in combination with a balanced budget and guaranteed full employment. This set of measures would change expectations, redistribute responsibilities, and render the continuation of inflation extremely difficult if not impossible without suffering the costs of reduced production and employment.