The wage-price spiral results from corporate pricing decisions, not worker wages

Evidence

Contrary to how it is presented in economics textbooks, the wage-price spiral is not automatic, it is not deterministic, it is not a fact of the universe; rather, it is the result of specific political decisions made by those who hold capital and who do not want to (or cannot) bear the burden of increasing labor costs. As critical economist Richard D. Wolff emphasizes, inflation embodies the quintessentially antidemocratic nature of our economic organization. Indeed, there is nothing transcendent about price setting: corporations are the ones that set prices. Neoclassical economics hides this reality with its abstraction about perfectly competitive markets. In these economists’ wage-price narrative, the silent blame for inflation falls on workers, seen as responsible for the imbalance that jeopardizes society as we know it, rather than on corporations. — Clara E. Mattei, Escape from Capitalism, 279

Categorization

• QUESTION: How does price-caps and tax history during world wars bear on today’s inflation policy debates, and why isn’t it mainstream?
• XREF: connects to: The wage-price spiral reflects corporate price-setting decisions, not automatic economic law. — Clara E. Mattei, Escape from Capitalism: An Intervention, 279; Rising wages reflect monetary conditions rather than union coercion causing inflation — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 976

Broader Connections

• The wage-price spiral reflects corporate price-setting decisions, not automatic economic law. #corroborates (0.95) — Clara E. Mattei, Escape from Capitalism, 279
• Rising wages reflect monetary conditions rather than union coercion causing inflation #qualifies (0.75) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 976