If you define "inflation" as "inflation + increased wages" and you discard stagflation as a special case of inflation, your comment holds up, it's just not the case anywhere in developed countries for the past 40 years. The reality for most workers is that, as of the past 20 years, inflation doesn't correlate with increased wages, so discarding the whole "inflation = suffering" that most workers actually feel in their bank accounts feels sophistic to me.

You have $1000 income, Treat is $100 a piece. If you take out a $2000 loan, you can get 20 Treats this month.

Next month, your income has doubled, so you have $1000 + $2000 = $3000, you use $2000 to pay off your debt, you still have $1000 left in your bank account

Not true to many workers. In Spain, when the inflationary episode of 2022 hit, it turned out that most mortgages had a variable interest rate, so if a mortgage used to be 500€/month, it went to 750€/month, so people not only had to afford more expensive goods with meager salary increases, their debts also increased because banking institutions have shielded themselves from inflation when giving out debt by applying variable interest rates.

For many private firms, they take out commercial loans for investment, for expansion of production, hiring workers etc. Under an inflationary scenario, the loans become cheaper to service, wages can be raised etc as long as profit is expanding. This also means you can hire more workers, expand productive capacity which will lessen the inflation over time.

How much have productive capacity and number of workers increased by in Europe and the USA over the past 3 years? Also, is debt in practice cheaper to take on during inflation when central banks in capitalist countries consistently decide to rise interest rates under inflation?

But if the deflation has made your house worth only $70k, you’re pretty much screwed!

In a country like China, where there is a home ownership rate of 90+%, this might seem obvious. Go to Germany with a <50% home ownership (disproportionately affecting low income workers) and let's see who's actually hurt or benefitted by a lowering of housing prices and profitability of housing as an investment.

At the core of the issue, I think this is just a matter about our definitions of inflation vs stagflation. If your point is "there hasn't been inflation exclusively in most of the developed world for the past 20 years, there has been stagflation", then I guess sure, I agree.

[–] xiaohongshu@hexbear.net 1 points 3 days ago

it's just not the case anywhere in developed countries for the past 40 years.

How much have productive capacity and number of workers increased by in Europe and the USA over the past 3 years?

That’s literally what I said at the top comment. The wealth is being concentrated at the top 1% due to neoliberal policies and monopolists charging what they want (this is known as the sellers inflation, which Marx talked about). This happens due to a lack of strong labor union movement that can push wage growth through the price increase set by the capitalists.

What I am saying is that deflation is much more dangerous than inflation, because inflation, as you described, can be easily fixed through policy change - you simply expand the productive capacity, more workers can be employed, and the increased supply of goods will lessen the inflation. The fact that your neoliberal governments refuse to help poor people is beside the point.

Deflation is much harder to get out because once baked in, can spiral very easily. This is because money is debt… it has a time component, and if the system does not have a debt cancellation mechanism, it can drag the entire economy down. This is a problem you don’t have to face under inflation.