Who profits off of inflation? Not workers whose real wages plunge as inflation ticks higher. Certainly not older people relying on fixed pensions. And definitely not new mothers who face high prices and shortages of baby formula. But one group benefits from inflation: capitalists.
The high inflation rate in the U.S. has proven a boon to big businesses. Under the cover of rising costs, businesses have been able to raise prices on their products across the board – even when this is completely superfluous. In fact, profit margins have been reaching 70-year highs despite the rising costs. One analysis of the recent price increases has found that over half have been driven by the pursuit of greater profits, and not by rising costs of materials or higher wages.
We quote from an opinion piece in the New York Times by Lindsay Owens:
Executives on their earnings calls crowed to investors about their blockbuster quarterly profits. One credited his company’s “successful pricing strategies.” Another patted his team on the back for a “marvelous job in driving price.” These executives weren’t just passing along their rising costs; they were going for more. Or as one C.F.O. put it, they were “not leaving any pricing on the table.”
The Federal Reserve chair, Jerome Powell, said that sometimes businesses are raising prices just “because they can.”
Businesses have been able to make these massive price increases with the excuse that there’s inflation – even though these corporations are what’s causing inflation. Under capitalism, the power to set prices and decide who can afford to buy the basic necessities of life is monopolized by the 1% who control the economy and own the banks and big corporations. The huge spike in inflation we’re seeing today is because capitalism runs on profits – and one way or another, corporations make those profits by squeezing us!