Sean Andrews quotes Mark Blyth: > Two factors unite all four sets of [neoliberal -- jd] ideas in opposition to > the ideas > and institutions of embedded [warfare/welfare state -- jd] liberalism. First > is the belief that > inflation is a greater threat to the general welfare than > unemployment.
It depends on your perspective. An anti-inflation tilt could be nothing but the unifying idea behind a coalition of diverse political-economic interests. Normal (non-hyper) inflation in many ways is the result of conflict over the distribution of income by different groups in society. In other words, the relatively high inflation of the late 1970s was the result of _class struggle_. Until the 1980s, every time business was able to boost prices to protect profitability, workers were able to hike wages to protect real wages. (The aggregate average real wage rose from 1973 to 1975 for manufacturing and from 72 to 73 and 75 to 76 for private non-production workers. The story was of course much more complex on ground level.) It wasn't just class struggle of course: oil producers were raising oil prices to find that they meant less in real terms as non-oil businesses raised prices (and/or the dollar fell) in response. Also, financial capital always seems to be hurt by inflation, no matter what the source (since they can't anticipate it). Class struggle is of course very scary to the organized and disorganized sections of the bourgeoisie. They want people to be passive. They also don't like losing control over the oil market (a fear that still motivates the Bushies). Conflict was also scary to many (most?) workers. Protecting real wages might be breaking the rules, upsetting the apple cart, etc. On the micro-level, workers often find themselves losing to inflation (as real wages fall) unless they struggle more (something that can be difficult). You can see why they might be (perhaps unenthusiastic) backers of an anti-inflation campaign. With labor's power fading and the radical rank-and-file efforts of the late 1960s/early 1970s squelched, it's no surprise that this anti-inflation coalition would reinforce the power of the powerful. > Second is the belief that phenomena such as > unemployment and inflation are due to the interventions of the state > into an otherwise naturally self-equilibrating economy. If the market > is seen as naturally self-equilibrating, then any level of employment > must accord with the natural rate. As such there can be no employment > policy other than "let the market clear." Inflation, however, augurs > no such laissez faire solution and requires firm government action. the latter is of course nothing but Miltie Friedman's "natural" rate hypothesis. -- Jim Devine / "In the years since the phrase became a cliché, I have received any number of compliments for my supposed ability to 'think outside the box.' Actually, it has been a struggle for me to perceive just what these 'boxes' were — why they were there, why other people regarded them as important, where their borderlines might be, how to live safely within and without them." -- Tim Page (THE NEW YORKER, August 20, 2007).
