Oct 11, 2021
Prices are rising fast. The official inflation rate is close to 6%, higher than it has been in 20 years. What’s worse, basic necessities that working people spend the most on, like rent, energy, transportation, and many kinds of foods, like meat and dairy, are rising at double digit rates.
That’s not all. Need a new car? The average price is $12,000 higher than last year. Two-year-old “pre-owned” cars are just as bad, costing what new cars used to cost.
The news media blames the price increases on the chaotic reopening from the pandemic and economic slowdown. They say the reopening has caused shortages and bottlenecks that are a normal part of the ups and downs in the market economy, of companies “struggling” to meet “supply and demand.”
In reality, this latest economic chaos shows how backward and destructive these companies’ profit-driven economy really is. Rather than plan and invest in preparation for the economy’s eventual recovery, the big companies that dominate the economy did the exact opposite. They kept costs as low as possible for as long as possible to increase their short-term profits. Car companies didn’t bother to order enough computer chips to build new cars. Shipping companies didn’t bother to stock enough containers. Oil and gas producers slashed production and distribution worldwide.
Then these companies turned around and used the shortages that they themselves created to charge much higher prices for the very same products! Car companies, meat producers, supermarket chains, and energy companies have all cashed in by charging much higher prices. Here’s one typical CNBC headline: “Ford Raises its 2021 Outlook after Surprise Higher Second Quarter Profit.” Some surprise!
These shortages also super-charged speculation and debt supplied by the banks, leading to much higher profits for banks and finance companies, and pushed up prices even more.
No wonder that the latest U.S. corporate profits were 24% higher than they were before COVID hit. These companies engineered these profits … at the expense of the working population.
In fact, companies use inflation and higher prices as a weapon against the working class, a way to steal even more money from us. Any tiny wage increases these companies may have granted “out of the goodness of their heart” is quickly eaten up by much higher prices.
In order to stop higher prices from driving down our standard of living, working people have to fight for much higher wages, and—in order to preserve their purchasing power—people have to fight for wages to rise along with price increases.
If the point of the capitalist economy is for workers to sacrifice even more to make a few people even richer, then who needs it? The working class has to fight to defend itself—and that fight will also have to prepare to challenge the disastrous control over the entire economy and society by a tiny minority for its own profit, the capitalist class.