Isabella M. Weber on Seller's Inflation and Strategic Price Controls

“Rising corporate profits were the largest contributor to Europe’s inflation over the past two years as companies increased prices by more than the spiking costs of imported energy,” says the International Monetary Fund.  Forty percent of Europe's inflation was attributable to corporate price gouging, reports the IMF. 

"We should recognize the recourse to higher interest rates for what it is: a strategy to dump the costs of inflation on to labor (by suppressing wages), on to social programs (through austerity), and on to future generations (by discouraging investment)," counters economist Isabella M. Weber.

If inflation was first post-pandemic supply shocks, inevitable, and inescapable after any global disruption in normal economic operations like a global pandemic, then the remedy was government supports for getting supply chains back on line and up to speed. I'm sure they were doing some of this. Think of gov efforts to help unsnarl the container ship flow in and out of ports in the US. And the solution for greedflation is strategic gov price controls or government procurements to stabilize prices, to reduce the impact of price gouging monopolists/oligopolists on inelastic demand markets. Again, some of this was done in the US, countering Russia and Saudi Arabia's move to drive up gas prices in '22, by releasing oil from US strategic reserves. 

But raising interest rates penalizes labor, wage workers, most, again, and lets corporate bad actors off the hook, again, and this gets no attention in the mainstream media in the US, NY Times or WaPo, and is ignored or scorned by the corporate toadies at Fox and on the right.   

Taking Aim at Seller's Inflation

Also, here's the story Weber wrote for the Guardian in 2021, first calling for strategic price controls to fight inflation. Krugman called her ideas "stupid," again belying the class war bias and free market dogma pervasive in mainstream economics in the US.  

Could strategic price controls help fight inflation? 

And another thing, Weber has a book, How China Escaped Shock Therapy? (2019). Fascinating economic history behind the fastest growing economy in the world for the last thirty years. I'll try to write more about it soon.