Recent U.S. Labor Department statistics have shown that there has been inflation of 6.2% in the last year in the United States. This is the highest annual rate of inflation in the United States since 1990!
Essential items such as gas, food, and clothes are all undergoing unprecedented price increases. The capitalist billionaires have seen their personal wealth increase during the pandemic, while the increases in cost of living increase the burden of working people who are barely making it by. These high levels of inflation are not only being felt by workers in the United States, but by workers across the world.
Many politicians and news commentators say that inflation is caused by the government “printing money” for stimulus packages and COVID relief. This is simply not true. Just because more money is circulating in the economy, does not cause prices to rise automatically. These levels of inflation stem from corporations raising prices to compensate for the profits they lost due to the COVID pandemic.
There is an endless debate about how to tweak the capitalist economy or its central institutions to reduce inflation (government spending, Federal monetary policy, etc.). This debate ignores the fact that the capitalists always find a way to increase their profits at the expense of the workers. If inflation is reduced, the big squeeze will come by other means. Inflation is just one “trick in the toolbox” of the capitalist class to squeeze the workers harder. They can cut our wages, they can outsource jobs to other countries, they can tax us more, or they can inflate prices. The result is the same: more labor for us. We will need to work more hours to buy the same stuff. And the capitalists rake in more profit at our expense.
There is only one thing that can put a break on this process and that is workers’ power. We have the power to reduce our exploitation by organizing together and fighting for higher wages, better benefits, affordable housing, and human rights. The history of capitalism shows that workers’ struggles are the only way to shift some of the wealth from capitalists to workers.
At its root, inflation is caused by the overproduction and waste inherent to capitalism. All this overproduction is forced on us by the capitalists who need to make profits – a return on their investments. This translates to economic growth: corporations get bigger and produce more every year. And the more the economy grows, the more labor is needed to continue maintaining and expanding this bloated global machine. So year after year, the working-class majority is forced to put in more hours and get less in return.
Overproduction not only causes inflation, but is the root of all the crises of this system: poverty, slavery (yes it still exists), the destruction of land, water, endless wars, climate change, and the current mass extinction that threatens our survival on Earth. Today, even the capitalist press is sounding alarms!
Just like other societies based on oppression throughout history, capitalism has a lifespan. And now it is nearing its death. The question is only will it take humanity down with it or can we build a better system? Will capitalism end by driving us to extinction, or will we build a socialist society?