In the neoliberal era, what has moderated inflationary pressures is the stagnation of wages.

Vernengo's short history of inflation and how it applies to the current COVID-19 induced "crisis" is very, very good. As we read of inflation figures almost every other day, and are constantly bombarded with news of Fed interest rate hikes, it's difficult for the common person, especially one that is left and working class-leaning, to make sense of it all. Should we consider inflation temporary? Even if it's not, is it good or bad for the common individual? We seem to get perspectives from both sides: that inflation can be "redistributive" or that its effects are largely felt by the working class.

Vernengo first discards the two "radical" views of inflation: the conservative one that government spending on the welfare state is to blame, and a progressive one that "ubiquitous corporations with vast oligopolistic power" are to blame for their price setting and increased profits during the pandemic. Both views have some truth to them, but that truth is small and insignificant compared to real factors. The true cause lays in the classic argument between demand-pull and cost-push inflation.

And his answer is that throughout recent history, mainly the neoliberal era, "what has moderated inflationary pressures is the stagnation of wages." That was very shocking to read in a socialist journal for someone unfamiliar with inflation and economics more broadly. This is because we have been taught, both through real-world scenarios and propaganda, that inflation is a horrible evil. I'm not arguing that inflation is not terrible - look at inflationary periods in recent history and how they have affected the lives of everyday people and it can speak for itself.

However, we must take the mindset of critiquing the capitalist system to see that inflation may be a constraint of the system, that when broken, leads to crises that affect everybody. By living in a capitalist system, we accept a sort of contract that says we will play by it's rules. If we don't, and let inflation run wild, the organizational structure that capitalism provides us as a society can crumble. Read Liaquat Ahamed's Lords of Finance if you want a real-life example of how spiraling inflation after WWI set the stage for WWII.

To try and clarify what I mean further, inflation is a challenge to the economic structure of capitalism. It's not "evil" in itself - in fact, Vernengo and many on the left argue that inflation has redistributive elements, especially when the primary cause is the rise of real wages and therefore price increases to accomodate that wage increase (cost-push inflation). It challenges the capital accumulation structure by devaluing money that capitalists hold. Many will argue that this is crazy, inflation is not redistributive because it wrecks havoc on the working class and the economy more broadly. And this is true - but it's not because inflation is bad, it's because inflation violates the constraint of capitalist accumulation fundamental to capitalism.

The answer is not to let inflation run, however, hoping that it will truly redistribute wealth. Economies would tank and we would go through a period of great instability. What we must recognize is how something so fundamental to a just and fair society, rising wages, can cause havoc to the system that we are living in. Capitalism is not designed for equality, and as we have gone through economic systems in the past (feudalism to capitalism), we must realize that the short term fixes to inflation to ensure stability (which are necessary), do not actually lead to a fairer and more just society. What we need is an economic system that supports wage increases, not one that punishes us for seeking equality.