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'''Inflation''' is the general increase in the prices of goods and services in an economy. This corresponds to the reduction in the purchasing power of money; | '''Inflation''' is the general increase in the prices of goods and services in an economy. This corresponds to the reduction in the purchasing power of [[money]]; each unit of currency is able to buy less and less over time. | ||
Inflation can be caused by many factors, but it is most frequently seen in market-based [[Capitalism|capitalist]] economies. In [[Socialism|socialist]] economies, price levels are carefully regulated to ensure the [[proletariat]] has access to goods and services, but sometimes external factors can still lead socialist countries into inflationary crises. | Inflation can be caused by many factors, but it is most frequently seen in market-based [[Capitalism|capitalist]] economies. In [[Socialism|socialist]] economies, price levels are carefully regulated to ensure the [[proletariat]] has access to goods and services, but sometimes external factors can still lead socialist countries into inflationary crises. | ||
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== Socialist economies== | == Socialist economies== | ||
Social economies are far less affected by inflation than their capitalist counterparts. [[Post-Keynesian]] economists [[Joan Robinson]] and [[John Eatwell]] conceed that “One clear and indisputable advantage of socialist industry over private enterprise is that it can continuously maintain a ‘high and stable level of employment’ without suffering from inflation.”<ref>{{Citation|author=E.L. Wheelwright (ed), Frank J.B. Stilwell (ed), Joan Robinson, John Eatwell|year=1976|title=Readings in Political Economy|chapter=Part Four: A Perspective on Socialist Economic Systems|section=Socialist Economies|page=238|quote=One clear and indisputable advantage of socialist industry over private enterprise is that it can continuously maintain a ‘high and stable level of employment’ without suffering from inflation.|city=Sydney|publisher=Australia and New Zealand Book Co.|isbn=0855520612|volume=2}}</ref> Additionally, this quote exposes the inability for a ‘high and stable level of employment’ to exist under capitalism without increases to inflation. | Social economies are far less affected by inflation than their capitalist counterparts. [[Post-Keynesian]] economists [[Joan Robinson]] and [[John Eatwell]] conceed that “One clear and indisputable advantage of socialist industry over private enterprise is that it can continuously maintain a ‘high and stable level of employment’ without suffering from inflation.”<ref>{{Citation|author=E.L. Wheelwright (ed), Frank J.B. Stilwell (ed), Joan Robinson, John Eatwell|year=1976|title=Readings in Political Economy|chapter=Part Four: A Perspective on Socialist Economic Systems|section=Socialist Economies|page=238|quote=One clear and indisputable advantage of socialist industry over private enterprise is that it can continuously maintain a ‘high and stable level of employment’ without suffering from inflation.|city=Sydney|publisher=Australia and New Zealand Book Co.|isbn=0855520612|volume=2}}</ref> Additionally, this quote exposes the inability for a ‘high and stable level of employment’ to exist under capitalism without increases to inflation. | ||
Between 1960 and 1989, the [[German Democratic Republic (1949–1990)|GDR]] had an average annual inflation rate of 0.5% in the aggregate economy and 0% in consumer goods. Between 1980 and 1990, inflation in the aggregate economy was also 0%.<ref name=":05">{{Citation|author=Austin Murphy|year=2000|title=The Triumph of Evil|chapter=A Post-Mortem Comparison of Communist and Capitalist Societies Using the German Case as an Illustration|page=94|pdf=https://mltheory.files.wordpress.com/2017/06/austin-murphy-the-triumph-of-evil.pdf|city=Fucecchio|publisher=European Press Academic Publishing|isbn=8883980026}}</ref> | |||
==2022 global inflation crisis== | ==2022 global inflation crisis== | ||
Revision as of 23:21, 1 July 2023
Inflation is the general increase in the prices of goods and services in an economy. This corresponds to the reduction in the purchasing power of money; each unit of currency is able to buy less and less over time.
Inflation can be caused by many factors, but it is most frequently seen in market-based capitalist economies. In socialist economies, price levels are carefully regulated to ensure the proletariat has access to goods and services, but sometimes external factors can still lead socialist countries into inflationary crises.
Inflationary periods harm the poor and the wage-earners far more than the rich, as the rich tend to be hedged against inflation through ownership of non-currency assets.
"Under inflationary conditions, price rises exceed wage increases. This means that capitalist profits grow at the expense of a decreasing workers’ share in the national income. Inflation is a means of redistributing the national income in favour of the monopolies" – Otto Wille Kuusinen[1]
Impacts
Inflationary episodes can cause economic instability especially among the poor, which sometimes further develops into social and political instability.
Socialist economies
Social economies are far less affected by inflation than their capitalist counterparts. Post-Keynesian economists Joan Robinson and John Eatwell conceed that “One clear and indisputable advantage of socialist industry over private enterprise is that it can continuously maintain a ‘high and stable level of employment’ without suffering from inflation.”[2] Additionally, this quote exposes the inability for a ‘high and stable level of employment’ to exist under capitalism without increases to inflation.
Between 1960 and 1989, the GDR had an average annual inflation rate of 0.5% in the aggregate economy and 0% in consumer goods. Between 1980 and 1990, inflation in the aggregate economy was also 0%.[3]
2022 global inflation crisis
The globe is currently experiencing a severe inflationary crisis due to many factors: the attempt by the West to isolate Russia from the global markets thus driving up the scarcity and prices of goods, as well as rampant monetary expansion (commonly referred to as "money printing" although most new currency generated is digital, not physical in cash form).[4][5]
See also
References
- ↑ NEEDS PAGE NUMBER Fundamentals of Marxism Leninism by Foreign Languages Publishing House, Moscow 1963 (tweet source)
- ↑ “One clear and indisputable advantage of socialist industry over private enterprise is that it can continuously maintain a ‘high and stable level of employment’ without suffering from inflation.”
E.L. Wheelwright (ed), Frank J.B. Stilwell (ed), Joan Robinson, John Eatwell (1976). Readings in Political Economy, vol. 2: 'Part Four: A Perspective on Socialist Economic Systems; Socialist Economies'. Sydney: Australia and New Zealand Book Co.. ISBN 0855520612 - ↑ Austin Murphy (2000). The Triumph of Evil: 'A Post-Mortem Comparison of Communist and Capitalist Societies Using the German Case as an Illustration' (p. 94). [PDF] Fucecchio: European Press Academic Publishing. ISBN 8883980026
- ↑ "‘Breaking point’: soaring inflation drives cuts to hunger-relief programmes" (2022-05-21).
- ↑ "Consumer confidence takes inflation hit". MSN.