An Unorthodox Analysis of Monetary and Fiscal Policy

Mainstream economic analysis omits references to social classes and class conflict. This omission shapes its interpretation of capitalist economies and the types of policies that mainstream economists favor. By contrast, I have developed an economic theory that is rooted in the conflict between industrialist capitalists, financial capitalists, and the working class. My analysis reveals the factors that determine the general rate of interest, and I show how the profit that workers produce is distributed between the industrial and financial sectors. Using this framework, I explain how the three monetary policy tools of the central bank may be used to alter the general rate of interest. I also explain how government deficit spending leads to a conflict over whether workers or capitalists will bear the burden of interest payments on the government debt.