It is at this point in time, when falling profit rates lead to a collapse in investment, that Keynesian policies begin to turn into a nightmare. Money is pumped into the economy through budget deficits, expansion of credit and other means. But the low rate of profit means that major investment does not take place. Without investment there can be no serious increase in production-and without a serious increase in production pumping money into the economy simply creates raging inflation, bottlenecks of labour and so on.
The direct cause of inflation is not wage increases or 'excessive public expenditure but the refusal of the capitalist class to invest—a refusal which produces the absurd attempts to overcome the collapse of investment through ever more intlationary economic policies. In the BA X37E 896886 Z80K 383323 final analysis, underlying this collapse of investment, however, lies the basic crisis of the capitalist system brought on by the declining rate of profit—a rate of profit which can only be substantially increased by the same type of unemployment and fascism which capitalists practised in the 1930s. While it prepares the way to seek such a solution capitalism will stagger from one crisis to the next with continually developing unemployment and ever soaring inflation as the capitalists pour money into the economy in vain attempts to avert the tendencies to uncontrollable slump which are built into the foundations of their system.