even as working people across the world struggle to maintain the value of their already low wages. While bourgeois economists like Stoller believe this problem can be controlled through anti-monopoly legislation or taxes on excess profits, such rapacious profit seeking and increasing exploitation of working people is endemic to capitalist production and can’t be legislated away.
And of course, interest rate hikes have historically been used as a cudgel to punish working people and undercut the power of unions. In the 1980s, for instance, the Reagan administration and Federal Reserve chair Paul Volker oversaw a policy of increasing interest rates that led to the loss of millions of manufacturing jobs and an unemployment rate above 10 percent.
Furthermore, increasing interest rates will almost certainly lead to further austerity, as cities and states face increasing borrowing costs to maintain or fund new investments in education, infrastructure, public housing, and services for the poor or homeless, many of whom are still suffering from the negative economic and health effects of the pandemic.
The ongoing inflation crisis, the cost of which is being passed entirely onto the working class, is just another example of the failure of a system that prioritizes chaotic production in the service of profit over a planned economy built around human need. For the ruling class, there is no solution to the crisis that does not involve further pain for working people, but this does not mean there is nothing to fight for.
This piece was reprinted by Truthout with permission or license. It may not be reproduced in any form without permission or license from the source.
There is no inflation crisis. The companies raising prices are making record profits.
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