INFLATION IN THE CONTEXT OF DEVELOPMENT

This dissertation seeks to examine and reconceptualize the methodological presuppositions of current work in development theory. Heretofore, the basic concepts underlying the large body of literature on the problem of underdevelopment have yet to undergo any but the most superficial inspection. As a result, theories of development are based either upon an analogy between the economic mechanisms of developed economies and the operation of the economies of less developed countries (as in neoclassical theories of development), or they are based on the relations between advanced capitalist countries and less developed countries (as in "dependency" theories). However, the extent to which internal mechanisms generate phenomena which are not assimilable to models based on developed capitalism remains unexamined. This problem is acute in the theories advanced to explain the high rates of inflation characteristic of many less developed countries. Inflation tends to be viewed either as strictly political, i.e., as a matter of monetary policy, or as a result of trade with advanced capitalist countries. In order to place development theory on a more scientific footing, we employ a number of the categories developed by French structuralists, e.q., Louis Althusser and Etienne Balibar. This procedure involves outlining a general concept of the transition from a precapitalist form of social organization to capitalism and examining the problem of inflation on this new terrain. Of special interest is the form of economic calculation implied by a particular mode of social organization and the transmutations undergone by this form in the process of transition to capitalism. Both the structure of relative prices and the absolute price level are studied in this light. Inflation, we show, plays a pivotal role in the struggle between social classes interested in maintaining the old order and those whose existence depends on a successful transition to capitalism.