Ask Prof Wolff: 3 Ways Government Has Historically Curbed Inflation

A Supporter of Democracy at Work asks: "Is there anything the Biden administration can do to decrease the rate of inflation significantly, even though it is worldwide? Is there any approach to price controls that could really work?"

This is Professor Richard Wolff's video response.

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“Marxism always was the critical shadow of capitalism. Their interactions changed them both. Now Marxism is once again stepping into the light as capitalism shakes from its own excesses and confronts decline.”

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[paulschumacher]

Politicians don't consider (or even allow to be mentioned) these proposals, because politicians work for their employers: rich donors. Great analysis and historical insights, by the way.

[kevinschmidt]

First, end inflation causing sanctions on Russia.
Second, cut inflation causing warmongering budget in half.
Third, support mom and pop businesses, as well as startup businesses.
Fourth, rebuild and improve infrastructure.
Fifth...

[dalisabe]

Inflation is not a divine built-in law, but a man-made condition and consent. The idea of injecting money into the economy to help poor people, which never happens by the way, is not out of the norm, and shouldn’t cause inflation unless it creates a supply problem. The reality though is we have too much stuff that needs to be consumed and it is the dream of every industry to be able to sell all its inventory. The reason we have shortage now is due to our idiotic relationships with the world, which we have been depending on in supplying our needs. Wars we create and outrageous pandemic restrictions as well other wasteful spending is what is causing our problems. If creating money out of thin air is a decision that we have the power to exercise, why don’t we have the power to regulate prices? You see, the inconsistency is biased in favor of the wealthy and it is totally hypocritical. Much of our economic parameters are controlled through decision-making, and if we dig deep into it, we find out that most of it defies logic and reason, so is robbery and theft on a massive scale.

[murraymadness]

Gasoline is essentially a utility for the USA. You can't live without it just like electricity or internet or sewer service. One has to drive a car.
So why is it not regulated like a utility? The government should just nationalize the oil/gas business. At the very least they can impose windfall profit taxes,
but they do nothing about it as the oil/gas industry funds the elected reps. Citizen United needs to be repealed, without that, nothing good can happen in the USA

[russtaylor]

The Prof should be on national TV with this obvious and logical offer of solutions while the democrats-in-name-only shrug their shoulders. Thank you Sir.

[zehrajafri]

Great job as alway's. Keep the truth alive for humanity and the planet and to wake up humanity. ❤ ❤ ❤ 💚 💚 💚

[matthewsapiano]

Wouldn't increasing taxes on the rich and corporate profits also reduce inflation, sadly would have to be done through legislation

[adambrock]

we waste enough that if any one living in America is doing without, it is simply due to greed . Manmade problems

[murraymadness]

Raising interest rates does not stop inflation either..for those saying other methods don't work or have bad side effects.
I'd also add the majority of people in the USA have no significant savings to earn interest nor can save more instead of spend it.
Raising Interest rates on mortages DOES have an effect on housing prices, and of course they ignored years of housing prices skyrocketing, it isn't until wages go up that the federal reserve has to do anything.

[emiebex]

Thanks Professor Wolff for laying this all out to understand.

[perfectlyGoodInk]

I agree there are alternatives to monetary policy that the duopoly is failing to discuss (support #ProportionalRepresentation if you want to break up the two-party system), and while rationing seems promising, I think there are better options than the other two proposals that Prof. Wolff presents.

Did we institute price controls? Yes. Did they work in fighting inflation? No, inflation continued past the end of Nixon's term well into Ford, Carter, and Reagan's. Why? Because price ceilings create shortages and price floors create surpluses. The price system is an importance signal for both suppliers and demanders to adjust the quantity they supply and demand. Both price controls and utility commissions seem problematic in this respect.

What do I think is a better way? Well, inflation results from demand outstripping supply. Monetary policy attacks this by reducing the amount of available money to spend. *Fiscal* policy can do likewise either by increasing taxes and/or reducing federal spending (indeed, MMT proponents want fiscal policy to control inflation instead of monetary policy).

But, of course, voters rarely vote for politicians who propose or enact either of these things. This is why neither of these nor rationing is on the table even in countries with multi-party systems (a big argument for central bank political independence in case Erdogan in Turkey wasn't convincing enough), but all that could change if we demanded it.

[sheilagolden]

Great presentation, with real answers to problems presented as impossible-to-solve. Hope this gets many more views.

[emiebex]

I never understood how raising the interest rates on Loaning Money brings inflation down, considering the price of goods is usually set by the CEO's & Shareholders of the company.

[alexissashanicolle]

Something to keep in mind, when the US government banned salary increase, they got around it by offering health care as a benefit. Now we have a major disparity between employees who have insurance and those who don’t. I am not in favor of banning salary increases. I understand our system is not perfect, no system is, but mandated salary freezes from the government undermines what should be a free market economy. Yes inflation is high these days, but freezing wages is not the answer.

[JCResDoc]

yeah, this all sounds more correct. -JC

[superxpeh]

It's sounds, just, like Marx-Lenin theory, about imperialism power
It's looks, like, in USA main controls of country deals belongs to reach people

[son-of-the-republic]

The definition is wrong. The original definition of inflation is; “the expansion of the money supply”.

Once you understand this there is only one solution to stop it, not 3. Stop increasing the supply of money.

[andrewthurman]

Can you really compare a manufacturing economy against a service economy by the size of their GDP? Is that really apples to apples?

[shellb]

I have been a long time listener of you and other political podcasts. I have never heard anything like Maryanne Williamson’s hour long interview on youtube, of Nancy Mclean, historian and author of ‘Democracy in Chains, ’ from 2 months ago. It is both an enlightening and very scary talk of how we got to where we are. Please listen to it, to maybe help us move forward. Thank you,

[helengarrett]

O.k. so now you know the remedy what are you going to do? You can sit by passively and sink or you can get off the sofa and work for your own best interests. Do something today. What? If you have a smart phone, a tablet or a computer send your Congressperson, both Senators and the President an email every single morning. Tell them what Professor Wolff suggests. Demand action. That's the easy thing. It will take ten minutes. Then join an organization that will help you.