Inflation as an ideological construct

Why is it we so easily accept the framing of inflation as somehow a force of nature? Or in ‘economic’ terms, as an extraordinarily complex interplay of supply and demand? A blind force that ebbs and flows without direct human agency.

I think this is self-evidently untrue. It’s not at all controversial to see the system as an oligopoly of gigantic corporations, an immense force that’s amplified even further by extensive links of hard to decipher cross ownerships, partnerships, and strategic alliances. This massively fortified consolidated network of concentrated wealth has near full pricing power and uses it to maintain profit margins.

It’s grossly misleading therefore to merely say that inflation is rising at an annual pace of x% for to leave it there implies the price level is being set by fair market processes. Far more accurate to say that the forces of wealth, through the power of its consolidated corporate network, is raising prices at an annual rate of x% in order to offset wage growth and maintain profit margins.

Inflation isn’t a matter of productivity, bottlenecks, or wrongly set interest rates. The corporate network determines prices and thereby output levels. It’s illuminating to consider what would happen if wages grew but prices remained the same. Populations of the world would then have more to spend and their spending would flow right back to the corporate network as revenue. Profits would thereby be completely unaffected, although profit margins and the relative power of the ownership class would decline. The issue, we can thereby see, isn’t profit per se but power.

Price setting is one of the most important powers in the oligarchic system and it’s crucial for us to pierce the ideological pretense that it’s somehow carried out in a non-hostile neutral ‘economic’ way.