Rising wages reflect monetary conditions rather than union coercion causing inflation

Evidence

But this success was not the primary source of inflation: “the rise of wages in Germany … has not been due to coercion by unions, but to the favourable business conditions… . Therefore it is more accurate to say that an inflationary situation caused this marked rise of wages than to say that the rise of wages caused an inflationary situation” (Ilau 1958, 3; emphasis mine). Ilau prognosticated that the first cause of an inflationary situation lay in a phenomenon of “imported inflation,” which was a consequence of a too-low German exchange rate. “Therefore I think that monetary policy is a far more important factor for the value of money than labor-relations legislation” (Ilau 1958, 3). — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 976

Categorization

• XREF: Connects to the broader contest within the infant MPS between monetarist and ‘intimidation’-focused accounts of inflation, and prefigures the later monetarist consensus of Friedmanite economics. — connects to: Monetarists hold that Keynesian stimulus breeds ever-rising inflation — Mark Blyth, Austerity: The History of a Dangerous…, 410; Export-led growth structurally demands wage suppression and anti-inflationary monetary dominance — Mark Blyth, Austerity: The History of a Dangerous…, 368; The wage-price spiral results from corporate pricing decisions, not worker wages — Clara E. Mattei, Escape from Capitalism, 279 (+8 more)

Broader Connections

• Higher unemployment suppresses wages and dampens inflation. #complicates (0.80) — Clara E. Mattei, Escape from Capitalism, 271
• Monetary austerity deliberately aimed to rein in workers’ purchasing power #corroborates (0.78) — Clara E. Mattei, The Capital Order, 757
• Depoliticized labor markets discipline workers through the threat of unemployment and lower wages #corroborates (0.75) — Clara E. Mattei, The Capital Order, 796