Writing shit like this is not gulag territory any more. Carrying this much water this willingly demands worse consequences.
this post was submitted on 30 Nov 2025
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Chapotraphouse
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Public hangings after social murder trials - simples
Your puny little brains do not comprehend the arcane laws of economics but I, a credentialed neutral expert dispensing indisputable scientific facts, can assure you that bad things are the best scenario and that trying to improve society somewhat will inevitably end up making everything worse.
Before I read it, I think it's going to do a fallacious reverse-causation argument saying that lower prices will cause an economic depression/recession. Or, they'll say that higher wages need the higher prices.
Ironically, falling prices can both signal a recession and trigger one.
There it is.
I love how economists can say this and also say that capitalism is the best system possible in the same breath
they're just priests
We never moved past reading tea leaves
(all this shit definitely isn't made up btw)
Yeah the deflationary death spiral. Although the deflation of prices is usually the symptom of economic crisis rather than the cause. I saw a chart of the purchasing power of a dollar across the 20th century, and the peak was during the Great Depression.
From the section titled "What might actually work":
Colyar does think government policy could reduce prices in two major areas: housing and health care. The government is heavily involved in health care and could pursue policies that reduce costs. And government policy on zoning, land use and related issues could spur the construction of more housing, so that greater supply would help cut into soaring costs.
ABUNDANCE
"could help spur"
just fucking build it directly god damn 
Well, there is a kernel of truth in there. Universal healthcare and an ambitious programme of constructing good, cheap public housing where the need is greatest would have huge direct and indirect economic benefits for the mass of people.
But they're not going to do that, are they? At best they're going to fuck a bit around with zoning laws and private insurance regulation, rearranging the deck chairs on the Titanic.
Or, they'll say that higher wages need the higher prices.
They don't know about the falling rate of profit causing intensified exploitation of labor.
It’s not wrong that deflation is a much more dangerous situation than inflation. China and Japan have been going through a deflationary spiral, and it’s been dragging their economies down. Hence why the governments in China and Japan have been desperately trying to boost consumption to get into the inflation zone.
The problem with the US and Western neoliberal economies is that the wages are not rising faster than the inflation, as the wealth has been disproportionately concentrated at the top 1%, and this places a lot of financial burden on the working class.
This leads to another fundamental problem: if wages are being raised, how do you stop the wage-price spiral, where the rising wages also lead to an inflationary spiral?
The failure of the Fordist-Keynesian economists to stop the wage-price spiral in the 1970s directly led to the rise of neoliberalism under Thatcherism in the UK, and Reaganism in the US: if rising wages lead to uncontrolled inflation, then the only way (according to the neoliberals) to stop inflation is to crush the trade union movements and stop their wages from being raised.
Stalin’s USSR (1929-1955) had the only economic model in practice that I know of that succeeded in solving the wage-price spiral problem (wage increase without inflation), which gave support to the revolutionary contribution of Modern Monetary Theory (proposed 70 years later) in stopping inflation: the price anchor mechanism through jobs guarantee. Any other form of trying to control inflation, such as price controls, almost always end in failure.
So, it’s not wrong to say that deflation is worse than inflation. In fact, you really do not want to live in a deflationary economy. The question is what sort of economic policies you have to enact in order to solve these problems, and that requires an understanding of how fiscal policy and the monetary system interact within an economy, for which the neoclassical economists (whose theory justifies neoliberalism) have no answer for, so the way out is to crush the worker’s wages from rising and create an unemployment buffer to stop inflation.
The so-called "wage-price spiral" is bad economics not materialist analysis. It has been used by capitalists to justify not raising wages since Marx's time. Marx literally wrote Wages, Prices, and Profits to refute it and he further elaborates on these ideas in Capital Vol 2. Modern economists carry water for the capitalists in every argument they make. They literally invented neo-classical economics to refute Marx for being CORRECT. If the tea-leaf readers and bone throwers of the capitalist class are telling you its bad, it means its bad for capitalists NOT workers. Surprised to see anyone on here regurgitate capitalist propaganda let alone someone who has so much knowledge of theory.
Marx made important contributions to inflation theory but remember that he wrote Wages, Prices and Profits in the 1860s, when the world was still in the gold standard era i.e. a fixed exchange rate regime that exerted a natural deflationary force to the economy.
Marxist theory of inflation has developed much further in the hundred years since. Robert Rowthorn’s conflict theory in the 1980s is a much better representation of inflation in a modern economy, which took into account of endogenous money supply, the conflicting force between firm’s mark-up profit and leverage strength of the union in pushing for real wage increase, the central bank setting interest rates, and most importantly, the collapse of the Bretton Woods causing the natural deflationary force of the fixed exchange rate regime to be lifted and made the Keynesians lost control of the inflationary spiral.
That’s when neoliberals came in and brutally crush the unions.
I respect you've spent a lot of time in the shadow realm of modern economics and I understand that finance capital has more ways to punish workers. This, however, is not a refute on Marx's arguments against the so called wage-price spiral. Any wage increase won by the working class is a direct benefit to the working class. Saying otherwise only serves the capitalists and leads to to why the US no longer makes economy cars and affordable housing. Deflation, wage-price spirals, and every other argument as to why wages can't increase and prices can't fall is NOT for the benefit of the working class.
Two different things here.
First, wage-price spiral is not a problem until you have full employment and all resource utilization is fully occupied. In that case, GDP can only be driven by inflation. Strong unions can push through real wage increase and cut into the capitalist profit, which was why the UK went into an inflationary spiral as it did in the 1970s because the capitalists did not want to give up their profit. The Keynesians did not have an answer for that, hence the neoliberals came in and crushed the workers unions.
Second, I agree with you that under current neoliberal system, where full employment is not reached, there won’t be wage-price spiral. Hence, you won’t find it in the IMF study that Roberts quoted.
However, for any socialist who is serious about bringing full employment for the economy to ensure the prosperity of the working class, you cannot avoid this problem. As I already presented, you either go with Stalin’s mechanism or the MMT price anchor mechanism.
If you ignore this problem, you WILL get inflationary spiral as the Keynesians did, and the next thing you know, your government is overthrown. Again, ignore this at your own peril. So many left wing governments continue to regurgitate neoliberal model and see how they end up.
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This leads to another fundamental problem: if wages are being raised, how do you stop the wage-price spiral, where the rising wages also lead to an inflationary spiral?
Not a real thing. Never happened irl, its a propaganda bit to scare workers. Prove it and you'll get that fake ass nobel prize in economics. We demand raises because prices have already gone up, not the other way around. Rising wages are a response to raising prices. But they will of course lie and say that you asking for more will mean that they'll HAVE to raise prices.
https://thenextrecession.wordpress.com/2022/11/20/the-wage-price-spiral-refuted/
Doesn't Wray talk about a few instances of a spiral during his mmt talks? His take was that they do happen but only at absolute full employment.
Yes, that was a problem that the Keynesians in the UK could not solve. The US inflation was more complex, because it was also driven in part by the spike in energy price during the oil crisis.
FYI I already commented to the poster that the IMF study that Roberts quoted used data from the 1970s-2010s, when the NAIRU framework was already firmly in place, so wage increase has already been heavily curbed. No surprises there at all.
Irrelevant. The IMF study used data from the 1970s onward to the 2010s, at which point NAIRU (non-accelerating inflation rate of unemployment) has already been pushed heavily by the IMF and OECD after the collapse of the Bretton Woods to many developed and developing economies. Neoliberalism was already in full force, of course wage is catching up to the inflation because wage growth has already been pre-emptively crushed under the NAIRU framework!
Also funny that IMF is being quoted here because that’s literally IMF justifying how their neoliberal framework was the correct one.
Applying our definition to the data sample with aggregate nominal wages identifies 79 episodes. The first episode is identified in 1973, and the last in 2017 (Table 3.2). When using the narrower but more widely available wage concept covering only the manufacturing sector, 100 episodes are identified (Table A.4). Episodes with price and wage accelerations has become less prevalent since the 1970s (Figure 3.1). This pattern is clearest when using the narrower wage concept, given the longer time-coverage of this variable (Figure 3.1, panel B).
lmao, guess what happened in the 1970s?
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It’s not wrong that deflation is a much more dangerous situation than inflation
By which metric? GDP growth, maybe. Well-being of the workers, I'm not so sure.
China and Japan have been going through a deflationary spiral, and it’s been dragging their economies down
True, but again, reversing the omelette, at what cost? I'm a Spaniard, Spain is one of the few countries in the EU with a "healthy" GDP growth. Since 2020, with Germany sunken into recession, Spain has a stable 2%-ish GDP growth yearly, yet purchase power keeps going down because of inflation and lack of correspondingly rising wages. Checking the Instituto Nacional de Estadística (INE, national institute of statistics)'s consumption surveys, purchase power is worse in 2025 for the vast majority of house units than it was 20 years ago. Compare that to China consistently achieving increases of purchase power year after year, 2024's report pointing to a 5% purchase power increase over one year.
I fundamentally agree that, in principle, "price-wage spiral" is a thing that an advanced socialist market economy needs to take into account. However, I also believe that there's no fundamental reason for a socialist economy to use markets in 2025 (except as a possible transitional phase), the whole "information of markets and prices" neoliberal stuff has been dispelled by Marxian economists such as Paul Cockshott and the revival of Labour Theory of Value using computational techniques and empirical studies.
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Actually I want higher prices. I love supporting local businesses
Huh that’s funny, because the rich never worry about deflation of wages…
What a coincidence, policies making life more affordable for the rich is somehow good, but for the have-nots? Now it’s bad.
B U T A T W H A T C O S T ?
less, presumably
I actually love not being able to afford basic necessities
Raise wages then? Oh wait, that's bad too.
The people for whom this system works best say we can't change the system. Can't argue with that.
Prices can stay high if you increase my fucking wages you fucks
Is this article’s argument really ‘starve for the economy’?
Bezos Post Bezosposting
Finally economists have come around on this. It has been clear from the beginning, prices must not be lowered, price must be abolished.
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