Inflation is back in the establishment media headlines, as prices are rising across the economy. But rather like generals fighting the last war, business and economic journalists are dusting off models of inflation last used in the early 1980s. The idea, for example, that “inflation is always a monetary phenomenon” worked well as a description of the crises of the 1970s when the class structure was flatter and simpler and when planet Earth still contained massive volumes of untapped resources; including decent reserves of energy-cheap energy.
Throughout the post-war years – and largely as a consequence of energy-cheap energy – the workers’ share of the profits from manufacturing and trade had risen. Various national versions of America’s suburban dream became available to skilled and semi-skilled workers across the developed states. Where the wartime generation rented small terraced houses, the post-war generation bought roomy semi-detached homes. Where the wartime generation walked to work, the post-war generation drove a car or rode a motorbike. Where the wartime generation holidayed at a nearby seaside town, the post war generation took package holidays in Mediterranean resorts.
Insofar as it existed at all, unemployment was a choice or a “frictional” period of a few weeks as workers moved from one employer to another. Only those few with complex problems, such as disabled people, people with mental illness or people with drug or alcohol dependency tended to be long-term unemployed. And the lack of a pool of unemployed labour empowered trade unions by undermining management’s ability to threaten the sack. If workers were fired they could easily find work elsewhere. And firms that sacked workers often struggled to find replacements.
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