Inflation’s causes are structural. The immediate driver is profiteering and speculation — and a set of rules that encourage and protect such anti-social behaviour. But this opportunism rests on three underlying factors.
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First, the long term costs of energy are rising as the economy relies less on easy-to-reach fossil fuels. Second, the method of globalised, just-in-time extraction, production and distribution that developed over the past forty years helped keep prices of goods low, but created systemic fragility. Disruption to supply chains, from natural disasters, strikes or Covid 19, can cause logistical chaos, putting upward pressure on prices. Third, the mode of extraction, production and distribution is generating a growing stock of ecological blowback. Droughts, desertification, soil destruction, deforestation, groundwater pollution, ocean acidification, natural disasters are all caused or intensified by the prevailing capitalism and, in the long term, place upward pressure on production costs.
The response to inflation is political. In the immediate term, its questions are distributional: who pays and who doesn’t from rising costs? In the longer term, its questions are civilisational: how is production and distribution made relatively sustainable and equitable?
This process necessarily raises the temperature of social and class conflict. That can take the form of generalised social protest, such as recently in Sri Lanka or Bangladesh, or specific labour disputes, as workers reject bosses’ demands for real terms pay cuts.
A new wave of strikes is building around the world, preparing to crash down on the heads of bosses and governments. Workers in most sectors and most countries will face real term pay cuts as wage offers fall well below surging inflation. This process generates spontaneous resistance that can be transformed into power when organised in militant and effective trade unions. While all workers can fight back when they come together, logistics workers — such as truckers in South Korea, warehouse workers in the US, dockers in Germany — have particular leverage, frightening capital with their ability to snarl up supply chains.
Under capitalism, value is taken from the unpaid work of women, communities and the natural world and from the paid labour of workers. With bosses trying to force workers into a lower standard of living, the latter becomes obvious to millions.
If they can fight back, in their trade unions and in alliance with other people and interests exploited by the economic system, then the distributional questions that the rulers seek to hide will move centre stage. With this higher level of organisation and development of greater popular power, then the civilisational questions can be posed and a new world fought for.
That is the meaning of the old union saying “the cause of labour is the hope of the world”: workers, through trying to improve their lives, have the potential to open up a wider collective vista for humanity to live well, sustainably and at peace.
The Progressive International is already home to powerful trade union forces, such as Brazil’s 7.5 million-strong CUT, and more will join in the coming months. If you are a member of a trade union, please consider using its democratic processes to propose applying for membership of the PI to unite struggles across borders and fight for a global civilisation that places human life and wellbeing before the profits of the few.
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