Capitalistic Renaissance     11: Inflation’s true definition

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The inability of wage earners to increase their labor price in tandem with price increases in the general economy is the true definition of inflation. Too much money chasing too few goods is a naïve view of inflation, another indication of the general misunderstanding of the debt problem and true capitalism.

A secondary point where we went wrong was in not relying on the use of equity from the generic public corporation as a social good. The pure goal of capitalism via its vehicle – the public company – is the self-interested creation of equity by any legal means. The combination of self-interest survival and all-inclusive capitalism brings to wage earners more wealth and more options to neutralize inflation.

The means to produce equity does not define capitalism. There is no harm done in repeating this subtle point. Credit (and its consequent debt) is not part of the pure concept of capitalism. The production of a car, oil extraction, the mining of gold, tree-cutting, etcetera are also not part of the concept of capitalism.

Until these production concepts are placed into the vehicle of a public corporation where consumers purchase the end products, the concept and power of capitalism cannot be used. It doesn’t matter what the end product is – a car or debt.

The only concept that defines capitalism is the creation of equity value for the shareholders. We have identified the root causes of the economic problem of “credit-debt” and therefore the solution of “equity-value” without disturbing the status quo.

Go to Section 12; The Solution