The Bank of England governor, Andrew Bailey, recently warned against the threat of inflation caused by increasing wages. This is straight forward victim blaming, even the FT pulled him up on this, Martin Sandbu asked why did he not call on powerful businesses to “moderate” their profits, rather than asking less powerful workers to “moderate” their wage demands. Perhaps, as Sandbu observes, because mainstream economics has a “blind spot” for the power of capital, and correcting this would mean asking uncomfortable questions about “who bears the cost” of rising inflation and who benefits.
Inflation is about profits and capital maintaining and increasing its margins, it’s not a natural phenomenon beyond human control. Here we demystify and explain the real reasons behind the cost of living crisis.
Additional reading
The Political Economy of Price Inflation
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