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Inflation is a class issue
As ministers and the mass media try to block pay rises using the threat of further inflation, STEWART McGILL looks at why prices are rising and what we should do about it

CAPITALIST economics maintains that cost increases, particularly wage rises, have to be passed onto the consumer as if it’s a law of physics.

They never ask why profit margins have to be maintained and real wages suppressed. Prices only have to go up to maintain the profits that go to capital. Inflation is like anything else in capitalism, a function of unequal power relations and the drive to accumulate, “profit-pull”, not “cost-push”.

The Economic Policy Institute in the United States showed that since mid-2020, 54 per cent of price rises were attributable to fatter profit margins, only 8 per cent to increased labour costs.

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