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; that 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.
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)[2][3]
See also
References
- ↑ NEEDS PAGE NUMBER Fundamentals of Marxism Leninism by Foreign Languages Publishing House, Moscow 1963 (tweet source)
- ↑ "‘Breaking point’: soaring inflation drives cuts to hunger-relief programmes" (2022-05-21).
- ↑ "Consumer confidence takes inflation hit". MSN.