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Speaker 1: Okay, that was that was that was slightly longer of

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Speaker 1: an a total shriek. Now was ex backing. Robert has

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Speaker 1: been coming after me for not doing a total shrieks

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Speaker 1: to start the podcast enough so that that's how we're

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Speaker 1: starting this episode. It could happen here the podcast where

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Speaker 1: we taken into Noverhre's victory Lap Because yeah, so, if

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Speaker 1: you've been following the discourse about inflation over the past

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Speaker 1: about two two and a half years, and especially in

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Speaker 1: the last like maybe year or so, so very interesting

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Speaker 1: stuff has been happening, and the stuff that we've talked

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Speaker 1: about on this show, and then also stuff that's been

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Speaker 1: sort of moving around in the sort of broader discourse

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Speaker 1: and has now reached like the IMF. And the thing

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Speaker 1: that's been happening is that the theory of inflation that

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Speaker 1: I've we've been pushing on this show and that also

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Speaker 1: very importantly that has been being developed by Strange Matters

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Speaker 1: has been like incredibly vindicated to the point of everyone

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Speaker 1: else adopting it and then claiming that they invented it.

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Speaker 1: So yeah, we're this is this is this is the

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Speaker 1: this is the Inflation Victory Lab episode. And to talk

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Speaker 1: about the fact that these two people and their colleagues

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Speaker 1: were right about inflation and a bunch of other stuff too.

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Speaker 1: Is John Michael Kolan and Steve Mann, who are both

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Speaker 1: co editors of the magazine Strange Matters, And yeah, both, Fiji,

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Speaker 1: welcome to the show.

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Speaker 2: Thanks so much for having us.

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Speaker 1: Yeah, and I'm excited about this because I've been wanting

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Speaker 1: to do this episode for like ever since. So the

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Speaker 1: the IMF tweeted out a graph that was arguing that like,

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Speaker 1: I think it's like fifty percent of inflation, and the

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Speaker 1: EU was based on corporate profits, which was like them basically,

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Speaker 1: and this is this is them, and like all the

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Speaker 1: mainstream economists are finally like having to admit that we

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Speaker 1: were fucking right about it inflation.

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Speaker 2: Yeah.

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Speaker 1: So I guess before we get into what we what

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Speaker 1: you two were arguing and what you collegues are arguing,

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Speaker 1: we should talk a bit about, like I guess who

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Speaker 1: you two are, and also like talk about Strange Matters

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Speaker 1: again because I think it's been a bit since y'all

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Speaker 1: have been on.

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Speaker 2: Yeah. Absolutely, So, Strange Matters is a this is our

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Speaker 2: kind of boiler plate, a magazine of new and unconventional thinking.

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Speaker 2: In economics, politics, and culture, and we have a political bent,

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Speaker 2: so we are broadly speaking all some flavor of libertarian.

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Speaker 2: Socialist is kind of the umbrella term that we've used

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Speaker 2: for ourselves, but that varies depending on the individual kind

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Speaker 2: of members of the team. So we've got people who

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Speaker 2: are anarchists, We've got people who are inspired by like

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Speaker 2: democratic and federalism. We've got like people who don't like

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Speaker 2: a lot of those labels but are really into like

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Speaker 2: direct democracy stuff. But like you know, the the four

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Speaker 2: of us basically converge on the direct democracy, you know,

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Speaker 2: socialism is putting people in charge of the decisions that

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Speaker 2: affect them kind of school of things. So in terms

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Speaker 2: of our economics pages, however, we've for the last couple

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Speaker 2: of years been really dedicated to publishing heterodox economists, economists

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Speaker 2: who don't correspond to the usually quite right wing mainstream

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Speaker 2: of the economics discipline, but challenging in fundamental ways. And

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Speaker 2: there's a bunch of different schools of heterodox economics, like

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Speaker 2: you know, everyone knows about, like Marxists, but there's also

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Speaker 2: post Kinesians and ecological economics and feminist economics and a

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Speaker 2: whole bunch of different schools. We've been dedicated to publishing

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Speaker 2: people from all those different schools and trying to kind

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Speaker 2: of get them to write in a style that's more

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Speaker 2: accessible for ordinary people, so that some of those ideas

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Speaker 2: actually start not just reaching the public, but actually reaching

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Speaker 2: each other because they don't really talk to each other

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Speaker 2: very much.

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Speaker 1: This is this is one This is one of the

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Speaker 1: big problems is like I mean even just inside of Marxism,

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Speaker 1: like if you if you get six Marxist in the

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Speaker 1: same we all have nine different positions and they'll all

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Speaker 1: be like ready to murder each other over it. And

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Speaker 1: that's that's just the Marxists, and then you expand out

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Speaker 1: to all the rest of the other Heterodoxicontaoist people, and

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Speaker 1: there's a lot of weird and sort of pointless rivalries

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Speaker 1: theories together.

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Speaker 2: Yeah. Absolutely, Yeah.

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Speaker 3: We tried to be a platform for diverging opinions to

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Speaker 3: actually be put into dialogue with each other, and we've

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Speaker 3: definitely I don't think there's been a single piece that

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Speaker 3: all of us have been in lockstep agreement on theoretically,

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Speaker 3: and I think that's a real strength. Actually, Yeah, like

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Speaker 3: there's there's quite a there's quite a few pieces that

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Speaker 3: at least one of us is like, I still don't

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Speaker 3: really know about this thesis, but I've been there have

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Speaker 3: been times in which I've been down on a piece,

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Speaker 3: but it does amazing, so let's go with it.

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Speaker 2: And also, you know, part of the reasoning for that

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Speaker 2: is not just to kind of like Lucy Goosey, let's

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Speaker 2: it's actually a very principled thing because part of the

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Speaker 2: story that we're telling with the magazine is how we

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Speaker 2: have these enormous problems, you know, climate change, the whole

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Speaker 2: crisis that the democracies have been going through since the

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Speaker 2: two thousand and eight crisis, the whole and since like

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Speaker 2: the rise of global fascism in the twenty tens, like

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Speaker 2: the what are we going to do about like the

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Speaker 2: Internet and its future? What are we going to do

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Speaker 2: about these these horrible culture war type issues that like,

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Speaker 2: you know, people talk about it as the culture of war,

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Speaker 2: but actually it's these massive reconfigurations that we have to

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Speaker 2: do of our consciousness in order to think about you know, gender,

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Speaker 2: national identity, and ethnic identity and all these other things.

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Speaker 2: In different in new ways that are actually like freeing

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Speaker 2: and emancipating and stuff like, Like all of these problems

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Speaker 2: are vast and nobody actually knows what the answer is,

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Speaker 2: and that includes leftists. Like there's a lot of these

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Speaker 2: problems that are either like too technical or to complex

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Speaker 2: needs to be a space where we kind of come

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Speaker 2: what are we going to do about this? And what

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Speaker 2: are our different perspectives and what's the what's the common ground,

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Speaker 2: and what are some little bits and pieces of things

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Speaker 2: that people have figured out that we can kind of

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Speaker 2: stitch together into something that will let us not just

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Speaker 2: get steamrolled by the fascists. And that that's the kind

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Speaker 2: of space that we're trying to be, and that's why

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Speaker 2: we try to accommodate these different perspectives, even though we

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Speaker 2: ourselves tend to come from rather strong perspectives both individually

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Speaker 1: Yeah, well, and I think we can like this inflation

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Speaker 1: sort of argument that's been playing over the past few years,

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Speaker 1: I think is a really like it's a really good

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Speaker 1: indication of how well this stuff can work. If it's

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Speaker 1: if it's like you know, like the fact that y'all

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Speaker 1: have basically had the inflation theory that like a bunch

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Speaker 1: of mainstream economists were going to stumble over in the

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Speaker 1: last like eight months, had effectively written we're discussing and

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Speaker 1: we're writing it like two years ago. Is a is

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Speaker 1: a sign that something is going right?

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Speaker 2: Yeah, we feel really vindicated.

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Speaker 1: Yeah, it's it's been very, very very funny to watch.

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Speaker 1: So I guess we should move into a bit about

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Speaker 1: what this theory actually is, and the very very short

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Speaker 1: version of it is that it's a supply chain theory

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Speaker 1: of inflation. It's a theory of inflation that tracks, you know,

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Speaker 1: tracks price increases based on like like price movement based

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Speaker 1: on stuff happening like backwards in the supply chain. And yeah,

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Speaker 1: that turns out to have been a really useful both

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Speaker 2: Yeah, I just really wanted to highlight that it's Steve

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Speaker 2: who wrote the initial essay where we first put those

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Speaker 2: pieces together, it's it's it's Steve's supply chain theory of

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Speaker 2: inflation were anybody else's, So I definitely I defer to

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Speaker 2: you in terms of, you know, laying the groundwork for it.

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Speaker 3: Well. I wrote a piece called Notes toward e Theory Inflation,

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Speaker 3: and it was kind of born partly out of frustration

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Speaker 3: over the fuzzy language in which economists will try to

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Speaker 3: speak about inflation. And when I was a grad student,

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Speaker 3: I would like encounter it not just from any particular school,

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Speaker 3: but from broadly speaking, most of the schools of economics.

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Speaker 3: And like it's been prior to this inflationary episode and history,

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Speaker 3: it has been almost forty years since we've experienced anything

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Speaker 3: like this. And you know, in the in the last

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Speaker 3: period of like runaway inflation in the eighties, people were

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Speaker 3: having a similar reckoning, although they didn't quite coalesce around

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Speaker 3: supply chain and cost puss related theories of inflation like

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Speaker 3: they are at this time. But like the theory like

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Speaker 3: in a nutshell, the supply chain theory of inflation is

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Speaker 3: essentially saying that along there there are groups of businesses

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Speaker 3: called supply chains who buy inputs from each other in

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Speaker 3: order to produce products and sell them to either the

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Speaker 3: the end user and over time, given stressful enough biophysical

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Speaker 3: conditions that they all find themselves in even if they

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Speaker 3: don't want to raise prices. And broadly speaking, we know

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Speaker 3: from empirical studies that most businesses most of the time

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Speaker 3: are very biased towards not raising prices. If the situation

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Speaker 3: gets dire enough and they've run they've exhausted all of

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Speaker 3: their non price based mechanisms for dealing with bottlenecks what

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Speaker 3: are called bottlenecks in the supply chain, Like they just

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Speaker 3: price in order to make enough revenue to socially reproduce

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Speaker 3: themselves and their supply chain. Of evidentially, they will exhaust

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Speaker 3: all options and there will be one person who's kind

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Speaker 3: of like the progenitor price increaser. And because like every

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Speaker 3: single and like, what is inflation really, it's a general

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Speaker 3: rise in prices. What are prices? Prices are things that

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Speaker 3: people themselves inside of firms, it's their job to set

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Speaker 3: and so any theory of inflation needs to start with

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Speaker 3: a theory of price essentially, and like, so these managers

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Speaker 3: whose job it is to set prices, when they change prices,

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Speaker 3: why did they do it? Well, we have answers going

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Speaker 3: back many decades, almost a century of the surveys of

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Speaker 3: economists who have gone out and actually conducted surveys asking

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Speaker 3: under what conditions would you raise prices? And at no

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Speaker 3: time did anyone say, oh, I raise prices because I

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Speaker 3: looked at monetary aggregates and I saw that there was

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Speaker 3: too much money, so I raised prices that and so

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Speaker 3: like that was kind of a starting point for me

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Speaker 3: when I read those these surveys conducted by Gardner Means,

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Speaker 3: who is an economists and doing this work in the

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Speaker 3: twenties and thirties long. If I don't burrow, I got

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Speaker 3: really excited because I'm like, oh, of course, well, of

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Speaker 3: course it's if inflation. There's so much mysticism about like

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Speaker 3: piles of money building up, and then it's like demand

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Speaker 3: pull and cost push, and like what does this all mean? Right? Well,

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Speaker 3: at the bottom of it, it's what are pricing managers

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Speaker 3: doing when they make that fateful decision to be the

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Speaker 3: first guy to raise prices? Because there is one. It

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Speaker 3: has to start with someone, and it's usually, like I

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Speaker 3: was saying, they've exhausted all of their other methods of

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Speaker 3: dealing with this, such as rationing inputs or economizing like

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Speaker 3: increasing their efficiency and their production, or diversifying their product

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Speaker 3: lines and all this stuff in order to maintain customer

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Speaker 3: goodwill throughout a period of of his coal stress to

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Speaker 3: the supply chain, and they're just going to raise prices

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Speaker 3: because they have to get a certain amount of revenue

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Speaker 3: in order to make it as a business. So that's

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Speaker 3: essentially what the supply chain theory is is that when

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Speaker 3: that happens, it propagates along supply chains first and then

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Speaker 3: because nowadays our economy is so extremely integrated, it's not

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Speaker 3: just one supply line. It's an entire supply chain network nowadays,

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Speaker 3: and it's global in scope, so even if it can't

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Speaker 3: it's it's increasingly less constrained to just like one industry

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Speaker 3: or even one country these days.

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Speaker 2: That was a that was a beautiful explanation. That's that's

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Speaker 2: probably the most concise that we've that we've accomplished yet

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Speaker 2: at boiling it down. I'll just because this is the

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Speaker 2: problem is that we could go on for like thirty

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Speaker 2: minutes about this. Yeah, just this. I guess I have

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Speaker 2: a couple of things to add that are just like

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Speaker 2: digging out a couple of nuances that I think are

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Speaker 2: important for listeners to stand. What Steve said about inflation

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Speaker 2: being about a continuous general increase in prices is really

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Speaker 2: really profound. I think the first person to articulate that

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Speaker 2: I'm aware of was John K. Galbraith in an essay

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Speaker 2: that he wrote about that, but in like the fifties.

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Speaker 2: But like, that's honestly not the way that we usually

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Speaker 2: think of it, right, Like, usually we think that inflation

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Speaker 2: is when money, the value of money goes down value

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Speaker 2: money buys you less than it usually does. And that

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Speaker 2: is not just because that's how we experience it in

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Speaker 2: our pocketbooks. Everything else is just scott more expensive. It

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Speaker 2: also has to do with the kind of history of

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Speaker 2: theories of inflation, because back in the day, the first

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Speaker 2: and og theory of inflation, which people still some of

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Speaker 2: them believe in, is the quantity theory of money, and

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Speaker 2: it basically envisions like the entire economic universe as a

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Speaker 2: bunch of like atomized individual agents. And by the way,

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Speaker 2: there's no like distinction between companies and households or anything

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Speaker 2: like that. Here, everyone's kind of like funny, everyone's an

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Speaker 2: individual agent. And there's a bunch of stuff that already

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Speaker 2: exists out there in the economy. How it was produced,

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Speaker 2: I mean, you deal with that in a production function.

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Speaker 2: Other than that, like you don't talk about it. So

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Speaker 2: there's a bunch of existing stuff out there in the economy,

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Speaker 2: and it's scarce, right, so like how is it going

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Speaker 2: to be distributed? Well, we're trading the stuff that we

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Speaker 2: have for the stuff that we need. And when things

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Speaker 2: are more scarce, they're more valuable. When things are more abundant,

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Speaker 2: they're less valuable. And when we want them more they're

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Speaker 2: more valuable, we want them less, they're less valuable. So

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Speaker 2: that's kind of like like the very basic universe that

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Speaker 2: they're kind of like operating in. And money was just

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Speaker 2: seen to be one one good being traded like any other.

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Speaker 2: It just so happens to be the one that we

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Speaker 2: trade in exchange for everything else. So rather than doing

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Speaker 2: barter like like of every thing, you know, this many

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Speaker 2: chickens for this amount of haircut, you know, like, instead

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Speaker 2: it's like, you know, we choose one thing to be

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Speaker 2: exchangeable for everything else, but it still has a value,

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Speaker 2: which is basically determined, according to this theory, by how

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Speaker 2: much of it there is. So if you increase the

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Speaker 2: money supply, money gets less valuable, which is why you know,

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Speaker 2: everything becomes more expensive, prices go up. Whereas if the

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Speaker 2: money supply shrinks, you know, then the value of money

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Speaker 2: is higher relative to the goods that it buys, so

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Speaker 2: therefore prices will go down. This was the theory that

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Speaker 2: was developed in like the sixteen and seventeen hundreds to

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Speaker 2: try to explain a massive global inflation that happened then

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Speaker 2: in the so called price revolution of the seventeenth century.

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Speaker 2: And frankly everyone by the twentieth century knows that there's

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Speaker 2: huge issues with this, so they start trying to evolve

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Speaker 2: away from it, away from the quantity theory of money,

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Speaker 2: because it has no real empirical basis. I mean, some

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Speaker 2: people tried to kind of like you know, juke the

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Speaker 2: stats to make it look like there was but like, really,

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Speaker 2: our best estimates of the money supply have no real

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Speaker 2: good correspondence to prices in the economy. It's not it

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Speaker 2: doesn't really work that way.

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Speaker 1: So yeah, this is this is the sort of modern

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Speaker 1: version of this is called monetarism, which is like that's real. Yeah,

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Speaker 1: And this is like, this is maybe the only thing

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Speaker 1: I have ever seen, even like most neoclassical economists drop

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Speaker 1: because it's empirically wrong, like it's stunning, Like you do

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Speaker 1: you know how wrong something has to be for neo

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Speaker 1: classical economists to go, wait, hold on, maybe this isn't right,

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Speaker 1: like I it's it's incredible.

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Speaker 2: But the problem is that they retreated into theories that

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Speaker 2: are not necessarily right either. Yeah, perhaps perhaps groping their

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Speaker 2: way clumsily towards the truth, but not really that right.

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Speaker 2: So this is this is where all that pull and

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Speaker 2: push stuff comes in, and it's it's it's a little

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Speaker 2: too technic to get into. Steve's essay has like the

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Speaker 2: full version of it, but basically they started evolving away

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Speaker 2: from a theory where the absolute amount of money in

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Speaker 2: the economy is what matters most, and towards theories where,

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Speaker 2: for example, it's the amount of money relative to the

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Speaker 2: goods that can be bought by it. So if you

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Speaker 2: have a bunch of people spending money to buy stuff,

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Speaker 2: but there's not enough stuff to meet that demand. Then

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Speaker 2: that will basically mean that there's like scarcity and shortages

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Speaker 2: and things like that, and that will cost prices to

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Speaker 2: go up. Although why they do, like the underlying microeconomics

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Speaker 2: of why prices go up when they're shortages and stuff,

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Speaker 2: this theory doesn't really address because it's a macro theory

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Speaker 2: and it'll kind of like fall back on supply and

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Speaker 2: demand stuff or various kind of weird hydraulic metaphors about

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Speaker 2: like well god, yeah, yeah, yeah, you know, it's so

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Speaker 2: it doesn't really like like you know, different people will

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Speaker 2: have different versions of this that have totally differ and

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Speaker 2: explanations of why it's happening, but they'll generally say, if

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Speaker 2: you look at the economy as a whole, if the

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Speaker 2: stuff that's being made is less than the orders being

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Speaker 2: put in for it, then that causes inflation because you're

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Speaker 2: just not producing enough stuff. And they call that demand

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Speaker 2: pull because the poll of basically it's like demand pulling,

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Speaker 2: you know, for stuff that isn't being produced, so it's

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Speaker 2: like okay, well that that causes price rises. There was

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Speaker 2: a parallel development where they're trying to get away from

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Speaker 2: the QTM another way where some people were like well,

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Speaker 2: what's the most important single cost for businesses across the

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Speaker 2: economy And they say labor obviously, right, like everyone needs

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Speaker 2: to pay somebody to do wages to keep the business going.

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Speaker 2: So they just said, okay, well, if the cost of

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Speaker 2: labor goes up across the economy, then that will cause

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Speaker 2: prices to go up. So that's called cost push, which

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Speaker 2: now theoretically this could be true of any cost. And

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Speaker 2: this is kind of like where you know Steve's theory

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Speaker 2: comes in is because it actually like starts talking realistically

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Speaker 2: about what the cost of businesses are. But originally this

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Speaker 2: was again a macro theory, so they picked the one

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Speaker 2: cost that's common to all the things in the economy

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Speaker 2: and they said that basically, inflation is the cost of

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Speaker 2: workers agitating for higher wages, which leads wages to go up,

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Speaker 2: which causes cost push inflation, the cost go up, so

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Speaker 2: that pushes puts pressure down the supply chain because it's

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Speaker 2: it's a cost for everybody downstream of it, so then

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Speaker 2: it causes it to the prices to go up. Now,

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Speaker 2: the problem with these theories is that like they're very

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Speaker 2: like rigid. It's like it has one cause and it's

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Speaker 2: also like, you know, and it's this one thing and

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Speaker 2: it has to operate across the entire economy. Right, But

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Speaker 2: that's not actually how our economy is put together. Because

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Speaker 2: our economy is not this general equilibrium produced by the

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Speaker 2: trading of individual agents who are buying cheap and selling

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Speaker 2: deer to each other. That whole universe doesn't really exist.

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Speaker 2: The universe that we actually live in is one where

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Speaker 2: businesses are not isolated. They're interdependent. Right Like the the

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Speaker 2: you know, the people who collect sands, you know, from

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Speaker 2: the earth and other minerals, feed into the factories that

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Speaker 2: turn it into glass, which feeds into the construction industry

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Speaker 2: that puts those glass well actually, no, sorry I missed

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Speaker 2: a step there. You know, it feeds into the factories

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Speaker 2: that turn that glass into windows, which then feeds into

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Speaker 2: the construction industry, which puts them into buildings that then

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Speaker 2: feeds into like real estate conglomers that rent it, which

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Speaker 2: then feeds into businesses and households that live there. Right Like,

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Speaker 2: that's the entire supply chain, and all those businesses depend

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Speaker 2: upon each other because they're each other's customers. So how

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Speaker 2: much glass do they make in the in the glass factory?

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Speaker 2: It depends on how much how many windows the window

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Speaker 2: factories that are all their customers order. That's what determines

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Speaker 2: how much they're gonna make. You know, this whole picture

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Speaker 2: of the world as supply chains is common sense to

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Speaker 2: anybody who actually like works a job, especially if they're

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Speaker 2: like in a man position where they have to maybe

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Speaker 2: be dealing with some of the supplier relations stuff or

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Speaker 2: customer relations stuff. Economists just don't talk about it. It's

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Speaker 2: not really in their models because their models are developed

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Speaker 2: from the ground up from this kind of like everybody's

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Speaker 2: just trading as individuals perspective. And that's a great deal

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Speaker 2: of the reason why Steve's theory is so powerful. Now.

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Speaker 2: A lot of this supply chain picture that I'm painting,

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Speaker 2: besides coming from the real world, it also came from

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Speaker 2: a particular heterodox economist that I wrote a very long

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Speaker 2: profile of called Frederick S. Lee.

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Speaker 1: Before we get into Lee, we unfortunately do need to

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Speaker 1: take an ad break because capitalism. But do you know

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Speaker 1: what Frederick Lee would have hated, and it's this ad break.

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Speaker 1: We're about to do it, all right, and we're back

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Speaker 1: to talk about Frederically, he was very cool and them

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Speaker 1: very excited.

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Speaker 2: Yeah, well, unfortunately started to the point. We're not gonna

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Speaker 2: talk a ton about him. The only really important thing,

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Speaker 2: so he was. He was a great guy. He was

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Speaker 2: an anarcho syndicalist. He was a lifelong member of the

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Speaker 2: i w W. He actually helped recover Joe Hill's ashes

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Speaker 2: from the federal government and properly bury them. That's not

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Speaker 2: in Part one of my profile, which is published. It's

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Speaker 2: in part two, which is coming up. But in addition

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Speaker 2: to that, he was also a great economic theorist, and

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Speaker 2: part of what he did is that he put together

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Speaker 2: the bits and pieces of this alternative picture of the economy, where,

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Speaker 2: for example, prices are not this thing that allocates resources

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Speaker 2: automatically through supply and demand and there and their price

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Speaker 2: changes are telling us what to how much to produce

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Speaker 2: and how much to consume, which is the kind of

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Speaker 2: like mainstream neoclassical picture. But rather prices are a markup

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Speaker 2: that businesses like set themselves. They're not receiving it from

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Speaker 2: the market. They set a price markup over their total

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Speaker 2: costs of production in order to get the money that

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Speaker 2: they need to keep the lights on and stay in business.

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Speaker 2: This all sounds very trivial, I know, but believe it

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Speaker 2: or not, in economics, this is like a revolutionary idea.

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Speaker 2: So then it's like, okay, well, if that's the way

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Speaker 2: that an individual company is, how are the companies linked together?

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Speaker 2: He basically comes to he doesn't call it this, but

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Speaker 2: to a supply chain view of the economy, especially in

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Speaker 2: his last textbook, which tries to create a model of

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Speaker 2: the economy as a whole, and he says that the

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Speaker 2: entire economy is basically just a circuit of supply chains.

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Speaker 2: It's all the businesses sort of linked up together, forming

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Speaker 2: a closed circuit that loops back on itself. And that

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Speaker 2: is the economy that we use to produce the goods

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Speaker 2: and services that just keep society going day to day,

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Speaker 2: week to week, year to year. So he Lee basically

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Speaker 2: had all of that and that was the main ingredient

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Speaker 2: that we used. But it was Steve who then took

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Speaker 2: that framework and used it to create a new theory

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Speaker 2: of inflation. Because if you have a world of the

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Speaker 2: supply chains, then it becomes very obvious that if prices

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Speaker 2: are gonna rise all across the economy, it's gonna be

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Speaker 2: because people's costs go up. So then the question becomes

434
00:24:11,320 --> 00:24:14,000
Speaker 2: why do people's costs go up? And the answer is

435
00:24:14,000 --> 00:24:17,800
Speaker 2: almost always what Steve called his progenitor price increase. This

436
00:24:17,800 --> 00:24:20,840
Speaker 2: this first guy who chooses to raise his prices if

437
00:24:21,280 --> 00:24:27,840
Speaker 2: and only if that person is even only if that

438
00:24:27,880 --> 00:24:32,440
Speaker 2: person is in the uh you know, in a position

439
00:24:32,480 --> 00:24:34,800
Speaker 2: in the supply chain where a bunch of people are

440
00:24:34,840 --> 00:24:38,960
Speaker 2: downstream of them. And that tends to happen when, for example,

441
00:24:39,640 --> 00:24:42,000
Speaker 2: an input that goes into the entire economy, like energy,

442
00:24:42,240 --> 00:24:44,919
Speaker 2: suddenly goes up in the price or becomes scarce, or

443
00:24:44,960 --> 00:24:49,600
Speaker 2: it happens when a natural disaster causes disruptions in a

444
00:24:49,640 --> 00:24:52,320
Speaker 2: couple of businesses that everybody else depends upon, or when

445
00:24:52,320 --> 00:24:55,840
Speaker 2: there's an adverse shift in the balance of payments, you know,

446
00:24:55,960 --> 00:25:00,560
Speaker 2: the the Let's say that the peso you know starts

447
00:25:00,640 --> 00:25:04,840
Speaker 2: becoming you know, versus the dollar. You know, the dollar

448
00:25:04,840 --> 00:25:08,440
Speaker 2: becomes much more expensive, So imports become much more expensive.

449
00:25:08,480 --> 00:25:12,679
Speaker 2: So any business that depends upon imports, you know, will

450
00:25:12,720 --> 00:25:15,480
Speaker 2: suddenly will suddenly have their costs go up. These are

451
00:25:15,520 --> 00:25:17,960
Speaker 2: the kinds of events that are like an external shock

452
00:25:18,320 --> 00:25:21,760
Speaker 2: that leads to arise in prices and keynodes in the

453
00:25:21,760 --> 00:25:24,120
Speaker 2: supply chain that because so many people are connected to

454
00:25:24,160 --> 00:25:28,879
Speaker 2: them as customers, their costs become more expensive, and that's

455
00:25:29,119 --> 00:25:32,720
Speaker 2: these costs increase travel across particular supply chains. So you

456
00:25:32,760 --> 00:25:35,320
Speaker 2: have to actually know how all the businesses are linked

457
00:25:35,359 --> 00:25:38,359
Speaker 2: together so that you can identify what the origin of

458
00:25:38,400 --> 00:25:42,119
Speaker 2: the stress was and see which particular supply chains is

459
00:25:42,160 --> 00:25:45,560
Speaker 2: traveling down. It's not this like this thing that has

460
00:25:45,600 --> 00:25:48,520
Speaker 2: to do with a single factor across the whole economy

461
00:25:48,760 --> 00:25:51,080
Speaker 2: or this or much less the amount of money that's

462
00:25:51,119 --> 00:25:53,560
Speaker 2: being printed. The amount of money is almost like irrelevant

463
00:25:53,640 --> 00:25:57,680
Speaker 2: in this situation basically. I mean, it maybe has relevance

464
00:25:58,040 --> 00:26:01,560
Speaker 2: inasmuch as, like you know, if people have the amount

465
00:26:01,600 --> 00:26:03,960
Speaker 2: of money in their pockets that they have, usually they

466
00:26:04,040 --> 00:26:08,280
Speaker 2: might start purchasing more things than can be produced at

467
00:26:08,280 --> 00:26:11,200
Speaker 2: this moment. But that's usually like like usually it balances

468
00:26:11,240 --> 00:26:13,680
Speaker 2: out in normal situations. The only reason why that would

469
00:26:13,680 --> 00:26:16,080
Speaker 2: be true is because there was some kind of disruption upstream,

470
00:26:16,320 --> 00:26:19,760
Speaker 2: so that what's normally produced isn't being produced, And so

471
00:26:19,800 --> 00:26:22,080
Speaker 2: you always have to look at the particular supply chains

472
00:26:22,080 --> 00:26:24,160
Speaker 2: and the kinds of stress that they might have. Did

473
00:26:24,160 --> 00:26:26,320
Speaker 2: I did I communicate that roughly? Right?

474
00:26:26,880 --> 00:26:31,760
Speaker 3: Yeah? Yeah, that was a fantastic summary. I have like

475
00:26:32,240 --> 00:26:35,639
Speaker 3: a few small notes just to add to it in

476
00:26:35,960 --> 00:26:40,160
Speaker 3: the sort of survey of existing theories of inflation that

477
00:26:40,240 --> 00:26:42,960
Speaker 3: I did in the paper that JMEC like very ablely

478
00:26:43,000 --> 00:26:47,719
Speaker 3: summaries for us, like specifically for the cost push guys,

479
00:26:49,080 --> 00:26:52,520
Speaker 3: they I think they have a tendency to focus on

480
00:26:52,760 --> 00:26:58,920
Speaker 3: like mecrodynamic forces at work in the lens of cost push,

481
00:26:59,320 --> 00:27:04,399
Speaker 3: like partly because it is like it really it relies

482
00:27:04,440 --> 00:27:08,080
Speaker 3: on high profile fights between labor unions and companies that

483
00:27:08,840 --> 00:27:11,639
Speaker 3: the audience already kind of understands, and it makes a

484
00:27:11,680 --> 00:27:14,080
Speaker 3: lot of sense that you would go to union fights

485
00:27:14,080 --> 00:27:17,960
Speaker 3: in particular since they're like one of the big items

486
00:27:18,000 --> 00:27:21,520
Speaker 3: that they typically fight over is cost of living adjustments

487
00:27:21,520 --> 00:27:24,679
Speaker 3: built into their wage increases. And so that's like an

488
00:27:24,680 --> 00:27:28,080
Speaker 3: obvious like, Okay, if there is ever a time in

489
00:27:28,119 --> 00:27:32,720
Speaker 3: which academic forces would convene in to specifically to raise inflation,

490
00:27:34,040 --> 00:27:36,760
Speaker 3: it would probably be fought over like the cola adjustments,

491
00:27:36,760 --> 00:27:41,440
Speaker 3: cost living adjustments, and like the that leaves so much

492
00:27:41,520 --> 00:27:45,680
Speaker 3: of the story untold. Focusing on cola adjustments in these

493
00:27:45,760 --> 00:27:48,879
Speaker 3: union fights leaves so much of the story untold because

494
00:27:48,920 --> 00:27:54,000
Speaker 3: it's it's putting like what's really this incredibly interdependent, micro

495
00:27:54,119 --> 00:27:59,480
Speaker 3: based phenomenon onto the backs of like one union against

496
00:27:59,560 --> 00:28:05,800
Speaker 3: one company fighting over one contract, and the way they

497
00:28:05,840 --> 00:28:07,919
Speaker 3: make it work in like a lot a lot of

498
00:28:07,960 --> 00:28:11,240
Speaker 3: the modern interpretations of cost push in this macrodynamic sense,

499
00:28:11,840 --> 00:28:14,439
Speaker 3: the way they square, the way they square how it

500
00:28:14,480 --> 00:28:18,600
Speaker 3: gets from that fight to become a generalized inflationary episode,

501
00:28:18,760 --> 00:28:21,840
Speaker 3: which is what people want to know about, Like they

502
00:28:21,840 --> 00:28:24,200
Speaker 3: don't want to know about one well, they want to

503
00:28:24,240 --> 00:28:27,280
Speaker 3: know about politically about a union fight, but in terms

504
00:28:27,320 --> 00:28:29,840
Speaker 3: of the economics, they want to know about the inflationary episode.

505
00:28:30,200 --> 00:28:33,320
Speaker 3: The way they square that is that there's typically like

506
00:28:33,480 --> 00:28:38,239
Speaker 3: in what they call an information diffusional component to this.

507
00:28:38,480 --> 00:28:41,240
Speaker 3: It's where and that's a fancy way of saying people

508
00:28:41,320 --> 00:28:44,280
Speaker 3: learn about the outcome of the fight and then replicate.

509
00:28:43,840 --> 00:28:45,560
Speaker 2: It monkey see monkey doo.

510
00:28:46,360 --> 00:28:50,000
Speaker 3: Yeah. So one union fight or one or one company

511
00:28:50,040 --> 00:28:53,560
Speaker 3: backclash against a union fight, word gets out, it spreads,

512
00:28:54,120 --> 00:28:58,560
Speaker 3: and it's all over the place. And that's really like

513
00:28:58,600 --> 00:29:03,320
Speaker 3: when you look at the the economic history of the

514
00:29:03,400 --> 00:29:07,840
Speaker 3: data of inflationary episodes, although there are union fights going on,

515
00:29:08,360 --> 00:29:11,840
Speaker 3: inflation is not springing up specifically from those fights in

516
00:29:11,880 --> 00:29:13,000
Speaker 3: the way that they're describing.

517
00:29:13,360 --> 00:29:14,800
Speaker 1: Yeah, and I mean, one of the things you can

518
00:29:14,800 --> 00:29:17,000
Speaker 1: tell this is obviously wrong is that they're just they're like,

519
00:29:17,360 --> 00:29:19,920
Speaker 1: at no point in the US's history has there ever

520
00:29:20,000 --> 00:29:22,360
Speaker 1: been enough percentage of the US population who are in

521
00:29:22,440 --> 00:29:25,400
Speaker 1: unions for this to mix, this to actually work, Like,

522
00:29:25,800 --> 00:29:28,840
Speaker 1: at no point even if you were to be really

523
00:29:28,880 --> 00:29:32,280
Speaker 1: generous to them and only look at union density and

524
00:29:32,440 --> 00:29:34,680
Speaker 1: like steel production, union density and stuff that are like

525
00:29:34,760 --> 00:29:36,800
Speaker 1: an important part of the supply chain, Like, it's just

526
00:29:36,840 --> 00:29:40,040
Speaker 1: not enough people, Like it can't it literally cannot be

527
00:29:40,160 --> 00:29:43,000
Speaker 1: true that it is purely like a union cost a

528
00:29:43,080 --> 00:29:45,360
Speaker 1: testment thing because they're just not enough people.

529
00:29:46,280 --> 00:29:49,200
Speaker 3: Yeah. So in these models, one of the important tasks

530
00:29:49,240 --> 00:29:52,600
Speaker 3: that they've given themselves is to estimate the coefficient of

531
00:29:52,680 --> 00:29:57,800
Speaker 3: information diffusional content from these union fights and like, so

532
00:29:57,920 --> 00:30:01,920
Speaker 3: they will try to estimate that coefficient and thereby out

533
00:30:01,960 --> 00:30:04,840
Speaker 3: build a model that outputs what price increase we can

534
00:30:04,880 --> 00:30:08,280
Speaker 3: expect from like labor militancy if you're on the right wing,

535
00:30:08,720 --> 00:30:11,880
Speaker 3: or company price gauging if you're on the left wing.

536
00:30:12,560 --> 00:30:15,120
Speaker 2: Yeah, and this is this is really just like a

537
00:30:15,320 --> 00:30:18,080
Speaker 2: perfect example. I think the Steve couldn't have possibly put

538
00:30:18,080 --> 00:30:21,920
Speaker 2: it better. Of the way that certain things that sound

539
00:30:22,040 --> 00:30:25,880
Speaker 2: super sophisticated and intelligent, because you know, you can have like,

540
00:30:26,080 --> 00:30:29,440
Speaker 2: you know, rather rather pink economists using this framework, right,

541
00:30:29,440 --> 00:30:32,600
Speaker 2: like you know, social democratic ones, you know. But the

542
00:30:32,600 --> 00:30:35,680
Speaker 2: thing is that, like it sounds really fancy to be

543
00:30:35,720 --> 00:30:38,800
Speaker 2: talking about like the district what was it the informational

544
00:30:39,160 --> 00:30:42,600
Speaker 2: informational communication coefficient or whatever like that sounds that sounds

545
00:30:42,600 --> 00:30:46,400
Speaker 2: incredibly sophisticated, right, but like, actually what it is is

546
00:30:46,440 --> 00:30:50,080
Speaker 2: that it's this kind of like Nutsoe story about how

547
00:30:50,160 --> 00:30:52,440
Speaker 2: the reason why price rises happen across the economy is

548
00:30:52,480 --> 00:30:58,040
Speaker 2: because people are picking union fights when like empirically, labor

549
00:30:58,080 --> 00:30:59,960
Speaker 2: economists often do this, like you know, the ones who

550
00:31:00,000 --> 00:31:02,280
Speaker 2: work for unions and stuff. It's like it is almost

551
00:31:02,320 --> 00:31:08,640
Speaker 2: always the case that wages lag cost of living, you know,

552
00:31:08,840 --> 00:31:11,680
Speaker 2: like significant, so cost of living goes up, and that's

553
00:31:11,720 --> 00:31:15,080
Speaker 2: why people at some point, usually years later, will try to,

554
00:31:15,200 --> 00:31:18,560
Speaker 2: if they're organized, agitate for for for higher wages to

555
00:31:18,640 --> 00:31:21,800
Speaker 2: catch up with cost of living. So like the causality

556
00:31:21,920 --> 00:31:24,920
Speaker 2: of it of cost push you know, probably is not

557
00:31:25,560 --> 00:31:29,600
Speaker 2: labor action. Like that's that's a sort of macro brain superstition.

558
00:31:30,000 --> 00:31:34,320
Speaker 2: But funnily enough, this is kind of like like the

559
00:31:34,320 --> 00:31:36,480
Speaker 2: devil is in the details. Because cost push as a

560
00:31:36,520 --> 00:31:40,760
Speaker 2: general framework ought to probably be the basis for any

561
00:31:40,840 --> 00:31:44,960
Speaker 2: reasonable theory of inflation, because the idea that it's costs

562
00:31:45,120 --> 00:31:48,960
Speaker 2: going up, that then whatever prices now stream of those

563
00:31:48,960 --> 00:31:52,360
Speaker 2: costs also go up, that is probably true. It's just

564
00:31:52,400 --> 00:31:54,880
Speaker 2: that you have to look at particular supply chains and

565
00:31:54,920 --> 00:31:57,600
Speaker 2: their costs and not just like their labor costs, but

566
00:31:57,720 --> 00:32:00,080
Speaker 2: all the costs that they have and what cost in

567
00:32:00,120 --> 00:32:03,840
Speaker 2: particular went up that affects those particular supply chains. Like

568
00:32:04,280 --> 00:32:06,440
Speaker 2: that's but that's a different story, and it's a story

569
00:32:06,480 --> 00:32:09,000
Speaker 2: that looks more like sieves and also a story that

570
00:32:09,040 --> 00:32:10,720
Speaker 2: looks more like what's been going on in the world

571
00:32:10,960 --> 00:32:11,880
Speaker 2: since twenty twenty.

572
00:32:12,640 --> 00:32:16,320
Speaker 3: Some of the critics when my paper and subsequent papers

573
00:32:17,160 --> 00:32:20,040
Speaker 3: that we're we're on the same vein as this came out,

574
00:32:20,600 --> 00:32:23,000
Speaker 3: is saying that we're just conflate, like how are you

575
00:32:23,040 --> 00:32:26,760
Speaker 3: guys really different than the cost push guys that you're

576
00:32:27,000 --> 00:32:30,400
Speaker 3: critiquing for part of your paper, And it's really comes

577
00:32:30,400 --> 00:32:33,760
Speaker 3: down to this kind of macro brain mecrodynamic interpretation based

578
00:32:33,760 --> 00:32:37,160
Speaker 3: on just wages or just like one union fight. And

579
00:32:37,200 --> 00:32:39,040
Speaker 3: then some like people see it and just copy it

580
00:32:39,200 --> 00:32:41,600
Speaker 3: or something, and it's just to least so much of

581
00:32:41,640 --> 00:32:42,680
Speaker 3: a story, I'm told.

582
00:32:43,280 --> 00:32:44,880
Speaker 1: Yeah, I mean, like I think, I think this is

583
00:32:45,120 --> 00:32:47,040
Speaker 1: like the strength of looking at it through a supply chain.

584
00:32:47,040 --> 00:32:50,760
Speaker 1: It's like you can have it, you know, it has

585
00:32:50,840 --> 00:32:54,600
Speaker 1: the what like for what for a normal person is

586
00:32:54,640 --> 00:32:56,800
Speaker 1: a really simple idea, but for an economist is like

587
00:32:58,520 --> 00:33:03,120
Speaker 1: unbelievably galaxy brain, absolutely impossible to comprehend idea that something

588
00:33:03,120 --> 00:33:07,480
Speaker 1: can have multiple causes at the same time, and those

589
00:33:07,600 --> 00:33:13,600
Speaker 1: multiple like those you can't literally just reduce an entire

590
00:33:13,960 --> 00:33:21,360
Speaker 1: like thing that's happening to exactly one driver, which you know,

591
00:33:21,520 --> 00:33:24,920
Speaker 1: you would think would be a pretty like not that

592
00:33:25,120 --> 00:33:29,320
Speaker 1: controversial thing. But then economists can't tell the difference between

593
00:33:29,360 --> 00:33:32,280
Speaker 1: a theory in which you can have multiple different things

594
00:33:32,320 --> 00:33:34,000
Speaker 1: that are working on a supply chain and a theory

595
00:33:34,000 --> 00:33:37,400
Speaker 1: where you can have like a thing yeah.

596
00:33:37,240 --> 00:33:38,040
Speaker 2: Yeah, exactly.

597
00:33:38,160 --> 00:33:43,000
Speaker 3: Yeah. So like in the COVID inflation that was that

598
00:33:43,800 --> 00:33:48,600
Speaker 3: transpired just after the first of these pieces of ours

599
00:33:48,640 --> 00:33:52,000
Speaker 3: came out, like it wasn't into full swing anyway in

600
00:33:52,080 --> 00:33:55,800
Speaker 3: terms of in terms of being like a national phenomenon

601
00:33:56,160 --> 00:33:59,600
Speaker 3: until just after like there, yes, there there would be

602
00:33:59,640 --> 00:34:04,400
Speaker 3: there's getting of the labor militancy upsurge happily, but does

603
00:34:04,440 --> 00:34:07,760
Speaker 3: like some people tried to light like the people who

604
00:34:08,280 --> 00:34:10,560
Speaker 3: were predicting no inflation, but then we started to see

605
00:34:10,600 --> 00:34:13,160
Speaker 3: a little bit of it, started to attribute it to

606
00:34:13,400 --> 00:34:18,160
Speaker 3: this like macrodynamic cost push story eventually of like well,

607
00:34:18,239 --> 00:34:21,120
Speaker 3: either like but you can you can tell that they

608
00:34:21,360 --> 00:34:24,400
Speaker 3: are kind of hedging because there will be there's like

609
00:34:24,440 --> 00:34:27,680
Speaker 3: a bifurcation of interpretations of it, like one is the

610
00:34:28,920 --> 00:34:32,440
Speaker 3: like it really is, just you can tell it's not

611
00:34:32,440 --> 00:34:35,200
Speaker 3: that strong of a theory because there are two like

612
00:34:35,360 --> 00:34:40,800
Speaker 3: diametrically opposed interpretations saying that like, oh, you'res this corporate

613
00:34:40,840 --> 00:34:47,840
Speaker 3: price gouging or it's workers causing inflation themselves, which like

614
00:34:47,920 --> 00:34:52,520
Speaker 3: if like James was saying, there's a lag typically associated

615
00:34:52,520 --> 00:34:54,400
Speaker 3: that workers are just trying to catch up with the

616
00:34:54,400 --> 00:34:57,239
Speaker 3: prices that were being raised by firms in order to

617
00:34:57,320 --> 00:34:58,920
Speaker 3: keep up with inflation they generate.

618
00:35:01,120 --> 00:35:05,560
Speaker 2: Yeah, if actually, if we could talk more, I was

619
00:35:05,600 --> 00:35:08,440
Speaker 2: I was hoping that I could actually get into the

620
00:35:08,440 --> 00:35:10,920
Speaker 2: COVID inflation and it's caused us a little bit. If

621
00:35:10,920 --> 00:35:14,359
Speaker 2: that's okay with folks, because I not only because it's

622
00:35:14,360 --> 00:35:16,600
Speaker 2: important in itself, but because I think this was actually

623
00:35:16,600 --> 00:35:19,239
Speaker 2: one of our first successes as a magazine. So we

624
00:35:19,360 --> 00:35:22,840
Speaker 2: launched as a magazine in April I think it was

625
00:35:22,840 --> 00:35:25,960
Speaker 2: of twenty twenty two, but we've been working on the

626
00:35:25,960 --> 00:35:32,279
Speaker 2: magazine from like twenty twenty on, so like those two.

627
00:35:33,360 --> 00:35:36,600
Speaker 2: It was March of twenty twenty two, the that's right,

628
00:35:36,960 --> 00:35:41,520
Speaker 2: but but we'd been working on the magazine all through

629
00:35:41,560 --> 00:35:46,800
Speaker 2: like twenty twenty and twenty twenty one and twenty And

630
00:35:47,120 --> 00:35:52,080
Speaker 2: the thing is that Steve's Peace was kind of like

631
00:35:52,320 --> 00:35:56,160
Speaker 2: taking shape, and you know, we as editors, but then

632
00:35:56,200 --> 00:35:58,280
Speaker 2: also as people who were like helping with the research

633
00:35:58,360 --> 00:36:00,680
Speaker 2: and talking things out internally and talking with other people

634
00:36:00,719 --> 00:36:03,480
Speaker 2: outside the collective, we're all kind of like sort of

635
00:36:03,520 --> 00:36:07,200
Speaker 2: imbibing it and thinking about it. When COVID hit right

636
00:36:07,719 --> 00:36:10,320
Speaker 2: and one of the things that was rather magical, And

637
00:36:10,360 --> 00:36:13,239
Speaker 2: there is written evidence of this, funnily enough, not as

638
00:36:13,239 --> 00:36:15,440
Speaker 2: an article because the magazine didn't exist yet, but as

639
00:36:15,480 --> 00:36:18,880
Speaker 2: a Twitter thread that I made actually on March third

640
00:36:19,280 --> 00:36:22,560
Speaker 2: of twenty twenty one. And the reason I'm being so

641
00:36:22,560 --> 00:36:25,960
Speaker 2: specific about dates is because of what happened where we

642
00:36:26,400 --> 00:36:28,799
Speaker 2: and I was just summarizing basically conversations that we had

643
00:36:28,800 --> 00:36:34,319
Speaker 2: been having inside the magazine internally. You know, that was

644
00:36:34,360 --> 00:36:37,719
Speaker 2: when some of the news stories were starting to come

645
00:36:37,719 --> 00:36:41,279
Speaker 2: out about shortages that were being caused by COVID. So

646
00:36:41,440 --> 00:36:45,400
Speaker 2: most famously the chips shortage were semiconductors, which take like

647
00:36:45,440 --> 00:36:47,440
Speaker 2: a year to make, like from the moment that the

648
00:36:47,560 --> 00:36:49,759
Speaker 2: order is put in to the moment when the thing

649
00:36:49,840 --> 00:36:52,480
Speaker 2: is actually shipped, it's like a year. And if that

650
00:36:52,520 --> 00:36:54,600
Speaker 2: process is disrupted, you have to start from the beginning.

651
00:36:54,800 --> 00:36:58,799
Speaker 2: So the shutdowns in China shut down semiconductor production, and

652
00:36:58,840 --> 00:37:01,120
Speaker 2: actually I say China, but it was really China and Taiwan,

653
00:37:01,400 --> 00:37:04,440
Speaker 2: like because because the both of those places have major

654
00:37:04,680 --> 00:37:12,720
Speaker 2: chips companies, and the that basically screwed up chips production

655
00:37:13,320 --> 00:37:15,799
Speaker 2: for like as long as the shutdown happened, and then

656
00:37:15,840 --> 00:37:18,240
Speaker 2: after that at a lag of like a year at least,

657
00:37:19,920 --> 00:37:22,240
Speaker 2: and then that in turn caused a bunch of other shortages.

658
00:37:22,320 --> 00:37:25,680
Speaker 2: The fact that we were all inside meant that like

659
00:37:26,000 --> 00:37:29,960
Speaker 2: there was a huge problem in food, both in agriculture

660
00:37:30,040 --> 00:37:34,080
Speaker 2: itself and in food processing factories, you know, where the

661
00:37:34,400 --> 00:37:35,880
Speaker 2: raw products that we take out of the earth are

662
00:37:35,880 --> 00:37:39,640
Speaker 2: turned into the packaged you know, bits and bobs that

663
00:37:39,800 --> 00:37:42,760
Speaker 2: you know, go to restaurants or to you know, food

664
00:37:42,760 --> 00:37:46,040
Speaker 2: product factories and things like that, Like you couldn't get

665
00:37:46,080 --> 00:37:48,719
Speaker 2: people to work there, or if they did, you know,

666
00:37:48,920 --> 00:37:50,719
Speaker 2: and you tried to like pay them a sure or whatever,

667
00:37:50,760 --> 00:37:53,319
Speaker 2: they would get sick so they would stop production. So

668
00:37:53,680 --> 00:37:57,200
Speaker 2: there was a labor shortage in agriculture as well. Then

669
00:37:57,239 --> 00:38:01,759
Speaker 2: there was a container shortage right in in shipping, where

670
00:38:01,760 --> 00:38:04,720
Speaker 2: we weren't producing enough containers to actually ship stuff around

671
00:38:04,719 --> 00:38:07,680
Speaker 2: the world. And if you can't do that, well, everything

672
00:38:07,800 --> 00:38:10,279
Speaker 2: is made. Everything that somebody needs to make something is

673
00:38:10,320 --> 00:38:12,600
Speaker 2: often now made in another country or at least another

674
00:38:12,640 --> 00:38:14,920
Speaker 2: part of a country, you know, that's connected by trucks.

675
00:38:15,040 --> 00:38:17,960
Speaker 2: So if there's no containers, how do you get stuff

676
00:38:17,960 --> 00:38:19,239
Speaker 2: from one place to the other? And the answers that

677
00:38:19,280 --> 00:38:21,320
Speaker 2: you don't So they were just piling up like mountains

678
00:38:21,360 --> 00:38:25,680
Speaker 2: in the in the docks of various countries, including here

679
00:38:25,719 --> 00:38:28,759
Speaker 2: on the West Coast and the East coast. So all

680
00:38:28,800 --> 00:38:33,000
Speaker 2: of these shortages caused by the pandemic. Basically we're hitting

681
00:38:33,160 --> 00:38:37,600
Speaker 2: key sectors of the economy, right that everybody depends upon.

682
00:38:37,640 --> 00:38:42,480
Speaker 2: So transportation, everybody needs it, you know, semiconductors, a whole

683
00:38:42,520 --> 00:38:45,800
Speaker 2: bunch of manufacturing needs it. So that's why cars suddenly

684
00:38:45,840 --> 00:38:48,840
Speaker 2: got super expensive, is because the chips in the machines

685
00:38:48,880 --> 00:38:51,400
Speaker 2: that make the cars got more expensive and scary, and

686
00:38:51,440 --> 00:38:54,040
Speaker 2: not just expensive, it's scarce, like you just couldn't get them.

687
00:38:55,360 --> 00:38:58,360
Speaker 2: And then food everybody depends on, and you know, like

688
00:38:58,440 --> 00:39:02,239
Speaker 2: everybody buys groceries, restaurants needed, so restaurant prices went up.

689
00:39:02,280 --> 00:39:06,800
Speaker 2: So you can see how specific sectors having these problems

690
00:39:07,120 --> 00:39:10,440
Speaker 2: traveled down specific supply chains to produce the cost increases

691
00:39:10,680 --> 00:39:13,440
Speaker 2: that we all started seeing. But here's the thing. All

692
00:39:13,480 --> 00:39:17,279
Speaker 2: that stuff was happening from twenty twenty on. I did

693
00:39:17,320 --> 00:39:22,799
Speaker 2: this thread on March third of twenty twenty one. But

694
00:39:22,880 --> 00:39:24,360
Speaker 2: the thing is that at that point there was not

695
00:39:24,440 --> 00:39:29,480
Speaker 2: yet inflation. We predicted that there was going to be inflation,

696
00:39:29,680 --> 00:39:33,080
Speaker 2: and there was a lot of people, like including left wingers,

697
00:39:33,120 --> 00:39:36,040
Speaker 2: including heterodox economists, who got really angry about this because

698
00:39:36,200 --> 00:39:39,799
Speaker 2: for them, inflation fear mongering. You know, this was in

699
00:39:39,840 --> 00:39:42,640
Speaker 2: the context of the government printing out all the stimmy checks, right,

700
00:39:42,800 --> 00:39:46,160
Speaker 2: so inflation fear mongering for them is kind of like

701
00:39:46,320 --> 00:39:48,480
Speaker 2: something that a right winger would do, you know, by

702
00:39:48,480 --> 00:39:50,520
Speaker 2: saying the government's printing too much money, So there's going

703
00:39:50,560 --> 00:39:53,200
Speaker 2: to be inflation, you know, quantity theory of money stuff,

704
00:39:53,280 --> 00:39:55,960
Speaker 2: Milton Friedman stuff, the stuff that they had experienced in

705
00:39:56,000 --> 00:39:58,680
Speaker 2: the turn to neoliberalism from the seventies to the eighties. Right,

706
00:39:59,440 --> 00:40:02,200
Speaker 2: I understand, and that fear. But the thing is this

707
00:40:02,280 --> 00:40:07,000
Speaker 2: wasn't fear mongering. These shortages for very clear reasons that

708
00:40:07,040 --> 00:40:09,680
Speaker 2: were clear if you had the supply chain theory of

709
00:40:09,719 --> 00:40:12,600
Speaker 2: inflation framework, which unfortunately only we did because we hadn't

710
00:40:12,600 --> 00:40:15,640
Speaker 2: published it yet. Like you know, it was very clear

711
00:40:15,640 --> 00:40:18,520
Speaker 2: that these shortages were going to cause cost increases in

712
00:40:18,880 --> 00:40:23,160
Speaker 2: very well linked together, you know, nodes within supply chains

713
00:40:23,160 --> 00:40:25,319
Speaker 2: that we're going to travel down those supply chains and

714
00:40:25,360 --> 00:40:30,560
Speaker 2: basically be economy wide. So I said so because I

715
00:40:30,560 --> 00:40:32,480
Speaker 2: had a hunch that it was going to be true,

716
00:40:32,600 --> 00:40:33,920
Speaker 2: and that it would be a big deal if it

717
00:40:33,960 --> 00:40:37,239
Speaker 2: was true, for you know, validating these discussions that we

718
00:40:37,239 --> 00:40:41,239
Speaker 2: were having internally. So I said, some predictions. One, there's

719
00:40:41,280 --> 00:40:43,120
Speaker 2: going to be inflation in the next year or two,

720
00:40:43,200 --> 00:40:46,720
Speaker 2: potentially lots. Two it will be caused by cost increases

721
00:40:46,760 --> 00:40:49,480
Speaker 2: due to the chips shortage and COVID induced bottlenecks, and

722
00:40:49,520 --> 00:40:52,960
Speaker 2: agriculture and manufacturing three, they'll try to blame the stimmy

723
00:40:53,040 --> 00:40:57,160
Speaker 2: checks and attempt to implement austerity. Now, at the time

724
00:40:57,160 --> 00:41:00,000
Speaker 2: of that first tweet, inflation was at two point six percent,

725
00:41:00,600 --> 00:41:04,759
Speaker 2: which is like within normal bounds, although slightly higher than

726
00:41:04,800 --> 00:41:09,080
Speaker 2: have been before. By the end of that year, even actually,

727
00:41:09,080 --> 00:41:10,560
Speaker 2: I think just a few months later, it was at

728
00:41:10,600 --> 00:41:14,920
Speaker 2: four point seven percent, and in twenty twenty two it

729
00:41:14,920 --> 00:41:17,560
Speaker 2: would peak at eight point seven three percent, which was

730
00:41:17,600 --> 00:41:20,000
Speaker 2: like the most inflation that we've seen since the Crisis

731
00:41:20,000 --> 00:41:26,120
Speaker 2: of the seventies fifty years ago. Like, so we you know,

732
00:41:26,280 --> 00:41:28,320
Speaker 2: the first success that we had as the magazine, before

733
00:41:28,320 --> 00:41:30,359
Speaker 2: we even came out as a magazine, is that we

734
00:41:30,400 --> 00:41:35,840
Speaker 2: successfully predicted the biggest inflationary crisis since the Crisis of

735
00:41:35,880 --> 00:41:38,279
Speaker 2: the seventies, and not only predicted it, but predicted its

736
00:41:38,280 --> 00:41:43,360
Speaker 2: specific causes. Because as the thread kind of was continually

737
00:41:43,440 --> 00:41:46,839
Speaker 2: updated over the course of that next year, like you know,

738
00:41:47,120 --> 00:41:50,359
Speaker 2: people started looking digging in and actually, like a lot

739
00:41:50,400 --> 00:41:54,200
Speaker 2: of journalism was uncovering that precisely those bottlenecks were leading

740
00:41:54,239 --> 00:41:59,040
Speaker 2: to cost increases, you know, the and there were other

741
00:41:59,080 --> 00:42:00,680
Speaker 2: ones that were kind of added to it. So when

742
00:42:00,719 --> 00:42:04,080
Speaker 2: the Ukraine War started in twenty twenty two that increased

743
00:42:04,360 --> 00:42:07,640
Speaker 2: global inflation because Ukraine is the world's single biggest and

744
00:42:07,640 --> 00:42:10,000
Speaker 2: by a lot, supplier of wheat, which is a key

745
00:42:10,040 --> 00:42:14,520
Speaker 2: staple in diets across the planet. So the shortages that

746
00:42:14,560 --> 00:42:17,080
Speaker 2: were created by the Ukraine War, by Russia's blockades, and

747
00:42:17,120 --> 00:42:19,760
Speaker 2: also just by bombing and you know, the war disrupting

748
00:42:19,760 --> 00:42:21,520
Speaker 2: the labor market over there and all these other kinds

749
00:42:21,520 --> 00:42:24,280
Speaker 2: of things that meant that there was less wheat being exported,

750
00:42:24,320 --> 00:42:28,319
Speaker 2: which created bottlenecks in those supply chains, which led to

751
00:42:28,320 --> 00:42:30,560
Speaker 2: the global increase in the price of wheat, which led

752
00:42:30,560 --> 00:42:35,040
Speaker 2: to the global increase anything that uses wheat, bread, you know,

753
00:42:35,120 --> 00:42:44,920
Speaker 2: and other food products. So beer, actually, well I'm not

754
00:42:44,960 --> 00:42:47,800
Speaker 2: wrong about that, right, Beer uses wheat. I should actually

755
00:42:47,800 --> 00:42:51,400
Speaker 2: know that from any way. Bread, yeah, I think I

756
00:42:51,400 --> 00:42:54,640
Speaker 2: think so I had to do a double take there.

757
00:42:54,840 --> 00:42:57,359
Speaker 2: So anyway, the point is that this was like a

758
00:42:57,400 --> 00:43:00,760
Speaker 2: really big deal because like there were a lot of people,

759
00:43:01,000 --> 00:43:05,080
Speaker 2: including like in the Biden administration, who were denying that

760
00:43:05,120 --> 00:43:11,200
Speaker 2: inflation was happening even as it was happening, And eventually

761
00:43:11,239 --> 00:43:13,520
Speaker 2: they kind of shifted to a story where it was like, well,

762
00:43:13,800 --> 00:43:17,839
Speaker 2: it'll be transitional, because only demand pull inflation is real, right,

763
00:43:17,920 --> 00:43:21,040
Speaker 2: this is clearly a cost push thing created by these shortages.

764
00:43:21,280 --> 00:43:24,240
Speaker 2: But like demand pull is the real form of inflation

765
00:43:24,440 --> 00:43:26,720
Speaker 2: is when there's like too much money in people's pockets.

766
00:43:26,760 --> 00:43:29,680
Speaker 2: And that's not what's happening clearly, So we'll be fine.

767
00:43:29,719 --> 00:43:32,600
Speaker 2: You just have to wait, right, which is not Actually

768
00:43:32,640 --> 00:43:35,160
Speaker 2: the attitude that you have to take. Inflation is inflation

769
00:43:35,600 --> 00:43:39,080
Speaker 2: and like you know, the the if the causes or

770
00:43:39,120 --> 00:43:41,920
Speaker 2: these disruptions and supply chains, you actually, I mean, this

771
00:43:42,000 --> 00:43:45,120
Speaker 2: is like the really edgy take. You actually have to

772
00:43:45,239 --> 00:43:49,600
Speaker 2: spend more money in order to unplug these bottlenecks. You know,

773
00:43:49,840 --> 00:43:52,080
Speaker 2: It's far from inflation being a product of there being

774
00:43:52,080 --> 00:43:54,359
Speaker 2: too much money in the economy. You might actually need

775
00:43:54,400 --> 00:43:58,799
Speaker 2: to do government spending to for example, hire people, you

776
00:43:58,840 --> 00:44:02,160
Speaker 2: know and take extra steps for precaution for their safety

777
00:44:02,280 --> 00:44:05,719
Speaker 2: to unplug bottlenecks created by labor shortages. Or you might

778
00:44:05,760 --> 00:44:09,520
Speaker 2: have to like you know, rapidly invest you know, on

779
00:44:09,560 --> 00:44:11,680
Speaker 2: a large scale, almost as if you're in a war,

780
00:44:12,040 --> 00:44:15,120
Speaker 2: in order to create a new industry to like, you know,

781
00:44:15,680 --> 00:44:19,560
Speaker 2: to to replace something like containers that that that you

782
00:44:19,560 --> 00:44:22,319
Speaker 2: would normally import, you know, or something like that. So

783
00:44:22,360 --> 00:44:24,880
Speaker 2: like like these are these are the kinds of actions

784
00:44:24,920 --> 00:44:28,840
Speaker 2: that a more muscular approach to the inflation would have

785
00:44:29,040 --> 00:44:31,000
Speaker 2: would have been. But instead they basically just waited for

786
00:44:31,040 --> 00:44:34,600
Speaker 2: the supply chains to fix themselves, even when multinational corporations

787
00:44:34,600 --> 00:44:37,640
Speaker 2: and their boards of directors were begging the government to

788
00:44:37,680 --> 00:44:42,200
Speaker 2: actually intervene more, which is insane with economic planning, you know,

789
00:44:42,239 --> 00:44:45,600
Speaker 2: you would never expect to hear something like that, but

790
00:44:45,680 --> 00:44:47,319
Speaker 2: it was in the things like the pages of the

791
00:44:47,320 --> 00:44:48,400
Speaker 2: Financial Times.

792
00:44:48,640 --> 00:44:50,279
Speaker 1: Speaking of the Financial Times, we do we do need

793
00:44:50,320 --> 00:44:54,480
Speaker 1: to take another ad break. Unfortunately. Yeah, do you know

794
00:44:54,520 --> 00:44:58,320
Speaker 1: what the Financial Times will not be doing. It's buying

795
00:44:58,360 --> 00:45:01,040
Speaker 1: ads on this show. Hasn't happened yet. Could happen, would

796
00:45:01,040 --> 00:45:16,680
Speaker 1: be very funny, but it has not happened yet. All right,

797
00:45:16,719 --> 00:45:20,680
Speaker 1: we're we're now back for ads. But yeah, I endeavored

798
00:45:20,680 --> 00:45:24,319
Speaker 1: to have better ad pivots. But you know, you get

799
00:45:24,320 --> 00:45:24,880
Speaker 1: what you get.

800
00:45:25,400 --> 00:45:28,279
Speaker 3: Speaking of like what they could have done differently, like

801
00:45:28,360 --> 00:45:31,920
Speaker 3: they there's a whole World War two playbook essentially that

802
00:45:31,960 --> 00:45:35,799
Speaker 3: they just didn't chose, they're ignorant of, or chose to

803
00:45:35,840 --> 00:45:40,279
Speaker 3: ignore of, like a system of price controls, rationing, and

804
00:45:40,600 --> 00:45:45,400
Speaker 3: rapid redeployment of resources to to unstuck the bottlenecks along

805
00:45:45,560 --> 00:45:49,600
Speaker 3: and across supply chains on the domestic side to support

806
00:45:49,640 --> 00:45:52,640
Speaker 3: the warfront. There's no war going on for us directly

807
00:45:52,760 --> 00:45:55,880
Speaker 3: right now, but it could it could have easily been replicated.

808
00:45:56,880 --> 00:46:00,360
Speaker 1: Yeah, and that's something I think is really interesting because eventually, actually,

809
00:46:01,000 --> 00:46:04,160
Speaker 1: like as the inflationary crisis sort of went on, like

810
00:46:05,000 --> 00:46:07,400
Speaker 1: you did see a little bit of people trying stuff

811
00:46:07,480 --> 00:46:10,200
Speaker 1: like this, like you saw Germany, if I remembering right,

812
00:46:10,280 --> 00:46:15,080
Speaker 1: Germany did these price controls on on, like natural gas

813
00:46:15,120 --> 00:46:19,600
Speaker 1: prices and stuff. But that gets into another interesting thing,

814
00:46:19,840 --> 00:46:24,160
Speaker 1: is which is that So Yeah, I think we should

815
00:46:24,160 --> 00:46:27,520
Speaker 1: get into a bit of this sort of like the

816
00:46:29,440 --> 00:46:33,240
Speaker 1: I don't know how you describe it, the mainstream adoption

817
00:46:33,640 --> 00:46:38,720
Speaker 1: of like a version of y'all's theory that eventually started happening,

818
00:46:38,719 --> 00:46:44,799
Speaker 1: that eventually started to push like some of this stuff, which, yeah,

819
00:46:44,800 --> 00:46:49,480
Speaker 1: I guess we should introduce another person who I don't

820
00:46:49,520 --> 00:46:52,719
Speaker 1: know the relationship between exactly what of your stuff she

821
00:46:52,840 --> 00:46:55,799
Speaker 1: read is sort of unclear. But one of the things

822
00:46:55,800 --> 00:46:59,080
Speaker 1: that happens in this sort of period is this German

823
00:46:59,120 --> 00:47:06,520
Speaker 1: economist name Isabella Weber, who wrote a like fine like

824
00:47:06,840 --> 00:47:12,239
Speaker 1: the mostly Reasonable book about I like try the economists

825
00:47:12,280 --> 00:47:15,480
Speaker 1: behind the like the reform period in the eighties and

826
00:47:15,560 --> 00:47:21,239
Speaker 1: China like started pushing well, actually, this is some thing

827
00:47:21,280 --> 00:47:24,280
Speaker 1: where I'm sort of unclear at the timeline. I started

828
00:47:24,280 --> 00:47:26,960
Speaker 1: pushing the greedflation thing, although she had a different name

829
00:47:27,000 --> 00:47:30,880
Speaker 1: for it. Yeah, I was wanting were talking about that

830
00:47:30,920 --> 00:47:33,600
Speaker 1: sort of whole thing because that was really interesting, sort

831
00:47:33,600 --> 00:47:38,040
Speaker 1: of like turn in the whole inflationary discourse inflation.

832
00:47:38,200 --> 00:47:43,400
Speaker 3: Yeah, I think the prior so like prior to Waber's

833
00:47:43,440 --> 00:47:48,920
Speaker 3: piece coming out in the earliest phases of COVID in

834
00:47:49,000 --> 00:47:52,600
Speaker 3: twenty twenty and twenty twenty one, before there was any inflation,

835
00:47:53,440 --> 00:47:56,800
Speaker 3: there was a group of left wing like a fairly

836
00:47:56,880 --> 00:48:01,320
Speaker 3: large swath of like left wing academics, aggressives and liberals,

837
00:48:01,840 --> 00:48:05,840
Speaker 3: and also Biden, the Biden administration itself, saying that inflation

838
00:48:05,880 --> 00:48:11,640
Speaker 3: would be transitory and that we should it will if anything,

839
00:48:11,680 --> 00:48:14,160
Speaker 3: it would be moderate, but would come right back down

840
00:48:14,840 --> 00:48:17,120
Speaker 3: because like, supply chings are so much more nimble now

841
00:48:17,760 --> 00:48:20,279
Speaker 3: than they were in like the seventies and eighties, and

842
00:48:20,360 --> 00:48:23,160
Speaker 3: like liquidy sources are so much more plentiful that they

843
00:48:23,160 --> 00:48:26,480
Speaker 3: have so many Like I'm probably giving them too much credit. Actually,

844
00:48:26,560 --> 00:48:30,000
Speaker 3: I think they literally just were like, yeah.

845
00:48:29,800 --> 00:48:32,240
Speaker 2: There was no because that I remember, like that would.

846
00:48:32,000 --> 00:48:34,360
Speaker 3: Be basically have it because actually I'm filling the in

847
00:48:34,440 --> 00:48:37,200
Speaker 3: the blanks for them as I go. I think they

848
00:48:37,200 --> 00:48:39,440
Speaker 3: were just saying it's going to be transitory because it

849
00:48:39,480 --> 00:48:45,319
Speaker 3: hasn't happened. Yeah, and like when it obviously in late

850
00:48:45,880 --> 00:48:49,879
Speaker 3: twenty twenty two to through the middle of twenty twenty three,

851
00:48:49,960 --> 00:48:52,160
Speaker 3: when there was obvious evidence that that wasn't the case,

852
00:48:52,280 --> 00:48:56,319
Speaker 3: then they like really didn't, like they went like hard

853
00:48:56,320 --> 00:48:59,959
Speaker 3: to starboard and said, like, Okay, the inflation that we see,

854
00:49:00,080 --> 00:49:03,239
Speaker 3: it's because of corporate greed and it just reduces to

855
00:49:03,280 --> 00:49:08,040
Speaker 3: that now. Yeah, and so it's like a purely opportunistic

856
00:49:08,120 --> 00:49:10,840
Speaker 3: thing between of like the largest corporations. And then you know,

857
00:49:10,880 --> 00:49:13,640
Speaker 3: maybe later people saw that and did monkey see monkey do,

858
00:49:13,880 --> 00:49:16,080
Speaker 3: but it's it's because of them.

859
00:49:16,520 --> 00:49:20,759
Speaker 2: And to be fair, like the tricky thing here is that, like,

860
00:49:21,000 --> 00:49:23,640
Speaker 2: so I'll preface this by saying that, like, you know,

861
00:49:23,920 --> 00:49:25,560
Speaker 2: and I think this is true Steve too, Like I

862
00:49:25,560 --> 00:49:28,359
Speaker 2: really respect us of Bella Vapor's work when it's good,

863
00:49:28,440 --> 00:49:30,400
Speaker 2: you know, and which is often you know, Like I

864
00:49:30,440 --> 00:49:34,600
Speaker 2: think that that she's a very solid heterodox economist who

865
00:49:35,320 --> 00:49:40,799
Speaker 2: has some really important refutations of mainstream ideas, and as

866
00:49:40,840 --> 00:49:43,640
Speaker 2: an example of the good stuff. For example, she actually

867
00:49:44,000 --> 00:49:46,680
Speaker 2: uh one of her one of the underrated aspects of

868
00:49:47,480 --> 00:49:51,120
Speaker 2: a paper that kind of pushes what is popularly known

869
00:49:51,120 --> 00:49:53,400
Speaker 2: as the greed inflation thing. The better part of that

870
00:49:53,440 --> 00:49:56,480
Speaker 2: paper is that it actually creates a map of the

871
00:49:56,600 --> 00:50:01,359
Speaker 2: current to today's supply chains in the US, like you know,

872
00:50:01,400 --> 00:50:05,279
Speaker 2: and and identifies the keynodes you know. And she's a

873
00:50:05,520 --> 00:50:09,160
Speaker 2: method called input output input output tables, which Steve and

874
00:50:09,160 --> 00:50:10,719
Speaker 2: I have written about and we're gonna write about it

875
00:50:10,719 --> 00:50:12,840
Speaker 2: more on the magazine. This is like the main tool

876
00:50:13,160 --> 00:50:15,240
Speaker 2: that you can use to do real economic planning.

877
00:50:15,560 --> 00:50:17,880
Speaker 1: JMC has been sending me input output tables for like

878
00:50:18,239 --> 00:50:19,320
Speaker 1: seven years now.

879
00:50:21,560 --> 00:50:23,160
Speaker 2: Yeah, I just scream about it.

880
00:50:24,480 --> 00:50:27,360
Speaker 3: Yeah, I should make it clear. It's like the iotable

881
00:50:27,400 --> 00:50:29,520
Speaker 3: stuff is amazing, and I think I think people just

882
00:50:29,600 --> 00:50:33,319
Speaker 3: latched on to kind of really not like hardly the

883
00:50:33,360 --> 00:50:35,920
Speaker 3: most important part of your piece.

884
00:50:36,800 --> 00:50:39,279
Speaker 2: Yeah, and that, by the way, I mean, I don't

885
00:50:39,280 --> 00:50:42,719
Speaker 2: know if she read Steve's piece or not, but it

886
00:50:42,840 --> 00:50:45,480
Speaker 2: is a huge vindication of Steve's piece, which came out

887
00:50:45,520 --> 00:50:48,480
Speaker 2: like a year and a half before, you know, because

888
00:50:48,520 --> 00:50:51,600
Speaker 2: because it's basically mapping the supply chains that Steve talks

889
00:50:51,600 --> 00:50:55,280
Speaker 2: about using io tables and saying, Okay, these are the nodes.

890
00:50:55,440 --> 00:50:59,120
Speaker 2: If prices go up here, everything downstream of them will

891
00:50:59,160 --> 00:51:03,640
Speaker 2: go up, and those the and and that basically hits

892
00:51:04,000 --> 00:51:07,200
Speaker 2: most sectors of the economy, like and knowing what those

893
00:51:07,239 --> 00:51:09,719
Speaker 2: nodes are is like super important because then you can

894
00:51:09,719 --> 00:51:12,359
Speaker 2: figure out how to protect them, you know, like that's

895
00:51:12,400 --> 00:51:15,360
Speaker 2: that's actually like one of the key things that you know,

896
00:51:15,400 --> 00:51:18,120
Speaker 2: one wishes that that that that governments were doing, it

897
00:51:18,120 --> 00:51:19,640
Speaker 2: would be one of the few useful things that they

898
00:51:19,640 --> 00:51:25,439
Speaker 2: could do in a situation like this, right, But unfortunately

899
00:51:25,520 --> 00:51:30,080
Speaker 2: there's another aspect of her work which is more and

900
00:51:30,120 --> 00:51:32,319
Speaker 2: this also comes from heterodox theory, but it's just not

901
00:51:32,560 --> 00:51:35,560
Speaker 2: good theory in my opinion. And it's this whole deal

902
00:51:35,840 --> 00:51:39,799
Speaker 2: with like, okay, inflation, with prices going up. So why

903
00:51:39,840 --> 00:51:43,600
Speaker 2: are the prices going up? Well, a lot of them

904
00:51:44,480 --> 00:51:48,439
Speaker 2: are going up because corporate management sees that everybody's talking

905
00:51:48,440 --> 00:51:51,839
Speaker 2: about inflation. Now, maybe their costs. They're not in one

906
00:51:51,840 --> 00:51:55,280
Speaker 2: of these sectors where upstream their suppliers are raising prices.

907
00:51:55,280 --> 00:51:59,080
Speaker 2: They're actually getting the same prices for their ingredients as always.

908
00:51:59,760 --> 00:52:03,920
Speaker 2: But because everybody's talking about inflation, they're expecting prices to

909
00:52:03,960 --> 00:52:09,759
Speaker 2: go up, right, so why not just raise prices, you know,

910
00:52:09,880 --> 00:52:14,879
Speaker 2: like like the and and so like. That basically ended

911
00:52:14,960 --> 00:52:20,320
Speaker 2: up that that that basically ended up being a theory

912
00:52:20,480 --> 00:52:23,000
Speaker 2: of like, well, a lot of the price rises that

913
00:52:23,040 --> 00:52:25,840
Speaker 2: are going up is because of corporate greed, and corporations

914
00:52:25,880 --> 00:52:28,279
Speaker 2: are always greedy. But a situation where people are talking

915
00:52:28,280 --> 00:52:32,520
Speaker 2: about inflation means that they can that they can basically

916
00:52:32,760 --> 00:52:37,000
Speaker 2: uh uh do a price get away with a price

917
00:52:37,080 --> 00:52:40,160
Speaker 2: rise that they wouldn't be able to get away with normally. Now,

918
00:52:40,280 --> 00:52:43,120
Speaker 2: there might be situations like this. I'm not even denying

919
00:52:43,200 --> 00:52:46,799
Speaker 2: that that's the case. Like there are clearly, you know,

920
00:52:46,840 --> 00:52:50,240
Speaker 2: based on a couple of journalistic exposes, some companies whose

921
00:52:50,280 --> 00:52:52,719
Speaker 2: costs have not really gone up, but they're raising the

922
00:52:52,760 --> 00:52:55,080
Speaker 2: prices opportunistically so that they can do higher payoffs for

923
00:52:55,120 --> 00:52:59,920
Speaker 2: the shareholders and upper management. However, as a primary ex

924
00:53:00,000 --> 00:53:04,960
Speaker 2: explanation for why the inflation happened, as an argument for

925
00:53:05,040 --> 00:53:08,440
Speaker 2: the main cause of the inflation, and therefore for what

926
00:53:08,480 --> 00:53:11,320
Speaker 2: the main solution should be, just slapping on price controls

927
00:53:11,360 --> 00:53:15,319
Speaker 2: and saying no, you can't do this. I don't think

928
00:53:15,360 --> 00:53:19,680
Speaker 2: that that's tenable, because there are clearly biophysical stressors in

929
00:53:19,760 --> 00:53:22,239
Speaker 2: at least the places that are experiencing them, that are

930
00:53:22,280 --> 00:53:25,120
Speaker 2: traveling down supplytions where if you slap price controls down,

931
00:53:25,200 --> 00:53:27,719
Speaker 2: that's not going to get you more chips that at

932
00:53:27,840 --> 00:53:30,360
Speaker 2: least not by itself, and in itself, price control should

933
00:53:30,360 --> 00:53:32,960
Speaker 2: be part of the picture, but that's not, especially in

934
00:53:33,000 --> 00:53:36,280
Speaker 2: situations where there is corporate greed sort of driven price rises.

935
00:53:36,440 --> 00:53:39,399
Speaker 2: But that's just not an explanation for everything. And some

936
00:53:39,440 --> 00:53:43,239
Speaker 2: of Weber's followers, not necessarily her, but some of the

937
00:53:43,280 --> 00:53:46,399
Speaker 2: people who are like promoting this perspective are doing so

938
00:53:46,719 --> 00:53:50,640
Speaker 2: again partly in order to avoid conversation, in my opinion,

939
00:53:50,719 --> 00:53:55,040
Speaker 2: about these kinds of biophysical bottlenecks and how they might

940
00:53:55,080 --> 00:53:59,160
Speaker 2: be they might be undone, and it's a huge issue.

941
00:54:00,000 --> 00:54:02,400
Speaker 2: One thing to kind of like conclude is that, like,

942
00:54:03,480 --> 00:54:06,680
Speaker 2: you know, this, this whole thing that we've been saying

943
00:54:07,120 --> 00:54:11,759
Speaker 2: about the supply chain as disruptions to the supply chain

944
00:54:11,840 --> 00:54:15,759
Speaker 2: as the cause of a progenitor and price increased by

945
00:54:16,000 --> 00:54:19,040
Speaker 2: people in the affected sectors, which in turn, through their

946
00:54:19,040 --> 00:54:22,080
Speaker 2: connections to a bunch of customers, leads to price rises

947
00:54:22,080 --> 00:54:25,480
Speaker 2: across at least sectors of the economy. That whole story

948
00:54:25,600 --> 00:54:28,759
Speaker 2: allowed us to kind of see all this. A lot

949
00:54:28,800 --> 00:54:31,800
Speaker 2: of the inflation that's happened in the world since twenty twenty,

950
00:54:31,840 --> 00:54:34,600
Speaker 2: we saw it coming, and we saw specific causes coming.

951
00:54:35,800 --> 00:54:39,160
Speaker 2: And now no less a capitalist institution than the imf

952
00:54:39,920 --> 00:54:44,439
Speaker 2: right has kind of been forced reluctantly, I would say,

953
00:54:44,520 --> 00:54:50,239
Speaker 2: in some ways to admit that, as Christine Legard said recently,

954
00:54:51,520 --> 00:54:56,040
Speaker 2: you know, energy played a significant role, then food kicked in,

955
00:54:56,400 --> 00:54:59,640
Speaker 2: and energy is now fading, you know. The now they

956
00:54:59,680 --> 00:55:02,120
Speaker 2: still make it about wages, right, I mean, that's that's

957
00:55:02,160 --> 00:55:04,120
Speaker 2: the thing that ends up happening in a crisis like this,

958
00:55:04,280 --> 00:55:08,480
Speaker 2: is that they do want to blame wage increases. But

959
00:55:09,560 --> 00:55:14,840
Speaker 2: it is quite clear that even the authorities have needed

960
00:55:14,880 --> 00:55:20,600
Speaker 2: to kind of admit that these specific, measurable biophysical crises

961
00:55:21,239 --> 00:55:24,200
Speaker 2: have been the source, the main source of the inflation.

962
00:55:24,520 --> 00:55:26,920
Speaker 2: And then a great deal of the of the battle

963
00:55:27,040 --> 00:55:32,720
Speaker 2: has been over who's going to kind of like who

964
00:55:32,760 --> 00:55:35,200
Speaker 2: who's going to have to narrow their ambitions for their

965
00:55:35,239 --> 00:55:38,319
Speaker 2: goals as a result of it, capital or labor. And

966
00:55:38,360 --> 00:55:40,760
Speaker 2: this is where I think VAPOR is on firmer ground,

967
00:55:41,600 --> 00:55:45,160
Speaker 2: not as an explanation for the inflation. But afterwards, the

968
00:55:45,239 --> 00:55:48,319
Speaker 2: after inflation is already kicked in, who ends up having

969
00:55:48,360 --> 00:55:52,959
Speaker 2: to quote unquote foot the bill, right is there's now

970
00:55:53,080 --> 00:55:57,239
Speaker 2: like less money coming in in these companies. So do

971
00:55:57,280 --> 00:56:00,520
Speaker 2: you give it to workers so that they can, you know,

972
00:56:00,680 --> 00:56:03,080
Speaker 2: since their money buys them less, you know, compared to

973
00:56:03,200 --> 00:56:06,239
Speaker 2: rising costs of living, you give them a little bit

974
00:56:06,239 --> 00:56:08,120
Speaker 2: more so that they can like kind of like balance

975
00:56:08,160 --> 00:56:11,920
Speaker 2: it out. Or do you give it to management? You know. Now,

976
00:56:11,960 --> 00:56:14,880
Speaker 2: obviously if it's management making the decision about what to

977
00:56:14,920 --> 00:56:16,640
Speaker 2: do with the company surplus, because we live in a

978
00:56:16,640 --> 00:56:19,439
Speaker 2: capitalist economy, that's a dictatorship with the big owners, guess

979
00:56:19,480 --> 00:56:23,879
Speaker 2: what they're gonna say, you know, And now you have

980
00:56:23,920 --> 00:56:27,960
Speaker 2: a therefore a class struggle, the distributional conflict that some

981
00:56:28,000 --> 00:56:30,600
Speaker 2: of the kind of traditional cost push theorists always talk

982
00:56:30,640 --> 00:56:34,719
Speaker 2: about between capital and labor over what to do with

983
00:56:35,000 --> 00:56:39,839
Speaker 2: these rising markups in firms. Now they would say that's

984
00:56:39,840 --> 00:56:42,719
Speaker 2: why the inflation happened. I think I would say, and

985
00:56:42,760 --> 00:56:44,719
Speaker 2: I think Steve would be in agreement with this, that

986
00:56:45,600 --> 00:56:49,160
Speaker 2: it's what happens after inflation, an inflationary crisis kicks in,

987
00:56:49,520 --> 00:56:52,480
Speaker 2: and then there's a battle between capital and labor over

988
00:56:52,719 --> 00:56:55,279
Speaker 2: who gets screwed as a result. I think that that's

989
00:56:55,400 --> 00:56:56,640
Speaker 2: kind of the way that we should think about a

990
00:56:56,680 --> 00:56:59,360
Speaker 2: lot of the labor struggles that have taken place since.

991
00:57:00,880 --> 00:57:03,920
Speaker 3: Yeah. I also like to add that there's kind of

992
00:57:03,960 --> 00:57:07,920
Speaker 3: like a distinction that needs to be drawn between like companies,

993
00:57:08,160 --> 00:57:12,160
Speaker 3: typically small and medium sized ones within who exist within

994
00:57:12,320 --> 00:57:15,360
Speaker 3: larger supply chains, who are sort of like doing what

995
00:57:15,440 --> 00:57:24,840
Speaker 3: they must, versus large corporations, often multinational who there's documented

996
00:57:24,880 --> 00:57:30,320
Speaker 3: evidence that yes, there's some opportunistic price price increases that

997
00:57:30,360 --> 00:57:34,440
Speaker 3: they are administering at the same time. So there's a mixture,

998
00:57:35,880 --> 00:57:39,320
Speaker 3: i would say bias towards the former group, those who

999
00:57:39,680 --> 00:57:41,880
Speaker 3: have to do what they have to do in order

1000
00:57:41,920 --> 00:57:44,640
Speaker 3: to socially provision themselves. But there's a mixture of them,

1001
00:57:45,080 --> 00:57:47,960
Speaker 3: and so you have to look at like that, who

1002
00:57:47,960 --> 00:57:52,520
Speaker 3: are the price leaders and are they opportunistically raising prices

1003
00:57:52,560 --> 00:57:57,360
Speaker 3: and are people copying that? Yes? Sometimes, But as far

1004
00:57:57,360 --> 00:58:00,440
Speaker 3: as like the progenitor price increase that we keep talking

1005
00:58:00,480 --> 00:58:03,800
Speaker 3: about it, you know, in our pieces like that very

1006
00:58:03,840 --> 00:58:07,000
Speaker 3: often like and this is born out in the surveys,

1007
00:58:07,040 --> 00:58:11,480
Speaker 3: like when they were asked like for their reasoning as

1008
00:58:11,480 --> 00:58:15,760
Speaker 3: to why they raise prices. It was typically like for

1009
00:58:15,840 --> 00:58:20,480
Speaker 3: the for reasons like that are quote unquote socially acceptable

1010
00:58:20,520 --> 00:58:24,040
Speaker 3: at least to say, And for the most part, they

1011
00:58:24,080 --> 00:58:27,760
Speaker 3: were just defending their margins, like they they were at

1012
00:58:27,840 --> 00:58:31,520
Speaker 3: risk of going under, right, Yeah, and so you have

1013
00:58:31,560 --> 00:58:34,480
Speaker 3: to you have to weigh there's a dynamic, there's an

1014
00:58:34,520 --> 00:58:38,120
Speaker 3: interplay between those that group and then the opportunistic group.

1015
00:58:39,000 --> 00:58:41,400
Speaker 3: And so it really doesn't like reduce neatly into the

1016
00:58:41,440 --> 00:58:47,560
Speaker 3: greedflation sort of like bestardization of vapors. Otherwise, really excellent

1017
00:58:47,600 --> 00:58:51,240
Speaker 3: piece that goes through some like interesting ended output analysis.

1018
00:58:52,240 --> 00:58:54,600
Speaker 2: Yeah, and I think that like this is a really

1019
00:58:54,600 --> 00:58:56,720
Speaker 2: important thing for listeners because I think a lot of

1020
00:58:56,800 --> 00:59:01,040
Speaker 2: left wing listeners they if they ask what's inflation and

1021
00:59:01,080 --> 00:59:03,880
Speaker 2: a left wing economist tells them because of corporate greed,

1022
00:59:04,240 --> 00:59:08,760
Speaker 2: they'll be like yeah, but and and they might listen

1023
00:59:08,800 --> 00:59:11,200
Speaker 2: to us and be like, well, it looks like you're

1024
00:59:11,280 --> 00:59:15,280
Speaker 2: it sounds like you're defending corporations, And I would argue, no,

1025
00:59:15,520 --> 00:59:20,360
Speaker 2: we're not. We're trying to understand the actual causes for things,

1026
00:59:21,600 --> 00:59:25,640
Speaker 2: and we think that can actually help you because, for example,

1027
00:59:26,720 --> 00:59:30,160
Speaker 2: if a company, let's say that you're in a company

1028
00:59:30,200 --> 00:59:33,280
Speaker 2: that is part of this wave of unionizations where you know,

1029
00:59:33,320 --> 00:59:35,280
Speaker 2: let's say you're a Starbucks worker and people want to

1030
00:59:35,280 --> 00:59:37,720
Speaker 2: start up a Starbucks union. Maybe one of the ways

1031
00:59:37,760 --> 00:59:40,919
Speaker 2: that management is trying to kind of like screw over

1032
00:59:41,000 --> 00:59:45,360
Speaker 2: your union is to tell people who are on the fence, well, like,

1033
00:59:45,520 --> 00:59:48,240
Speaker 2: the reason why there's so much inflation is because of

1034
00:59:48,280 --> 00:59:52,040
Speaker 2: these unions, like we have to all stick together, and

1035
00:59:52,080 --> 00:59:54,320
Speaker 2: you know, the company's got your best interests at heart,

1036
00:59:54,720 --> 00:59:57,360
Speaker 2: so you like, don't join this union that's going to

1037
00:59:57,400 --> 00:59:59,720
Speaker 2: be pushing for for wages that are ultimately just going

1038
00:59:59,720 --> 01:00:03,240
Speaker 2: to get not by inflation. Like, let let management figure

1039
01:00:03,240 --> 01:00:06,480
Speaker 2: out what'll what's best, because otherwise you'll just end up

1040
01:00:06,480 --> 01:00:10,120
Speaker 2: screwing up the whole economy. And which is not unheard of.

1041
01:00:10,400 --> 01:00:12,760
Speaker 2: You know, it might be something that they'll fall back

1042
01:00:12,760 --> 01:00:16,440
Speaker 2: on in negotiations and their anti union propaganda. If you

1043
01:00:16,560 --> 01:00:18,520
Speaker 2: know that the actual cause of the inflation has to

1044
01:00:18,560 --> 01:00:22,400
Speaker 2: do with disrupted supply chains and that really the question

1045
01:00:22,560 --> 01:00:24,600
Speaker 2: is who's going to be screwed over and who's not

1046
01:00:25,040 --> 01:00:28,439
Speaker 2: Within the company, you can go back and say, hey,

1047
01:00:28,880 --> 01:00:31,760
Speaker 2: wages are always chasing. Cost of living increases. The cost

1048
01:00:31,800 --> 01:00:35,040
Speaker 2: of living increases happened before the big unionization wave kicked off,

1049
01:00:35,200 --> 01:00:37,880
Speaker 2: and we can tell that it's specific causes in logistics,

1050
01:00:38,080 --> 01:00:41,520
Speaker 2: and its specific causes in chips, and specific causes in

1051
01:00:41,560 --> 01:00:43,760
Speaker 2: agriculture that are causing the price of this, that and

1052
01:00:43,800 --> 01:00:45,720
Speaker 2: the other thing. You can even map out your company's

1053
01:00:45,720 --> 01:00:48,560
Speaker 2: supply chain and maybe point out certain cost increases that

1054
01:00:48,640 --> 01:00:50,640
Speaker 2: caused it, and you can say, okay, so we're going

1055
01:00:50,680 --> 01:00:52,400
Speaker 2: to have to raise our prices. But where's that money

1056
01:00:52,440 --> 01:00:54,440
Speaker 2: going to go. Not all of us should go to management,

1057
01:00:54,520 --> 01:00:56,440
Speaker 2: Some of us should go to us. So this is

1058
01:00:56,480 --> 01:00:59,920
Speaker 2: what a materialist understanding of how the actual causes of

1059
01:01:00,080 --> 01:01:03,800
Speaker 2: the thing worked out can help you in organizing your

1060
01:01:03,840 --> 01:01:06,160
Speaker 2: workplace and in pushing back against the kinds of things

1061
01:01:06,200 --> 01:01:08,919
Speaker 2: that your boss might try to tell you. So that's

1062
01:01:08,960 --> 01:01:11,280
Speaker 2: that's what I would say to somebody who's like, well, well,

1063
01:01:11,320 --> 01:01:15,640
Speaker 2: you're just defending corporations. No, I'm absolutely not. But I

1064
01:01:15,680 --> 01:01:18,520
Speaker 2: don't think that we can actually have power, we can

1065
01:01:18,600 --> 01:01:21,320
Speaker 2: actually kind of like take direct actions that really matter

1066
01:01:21,560 --> 01:01:23,600
Speaker 2: because they're actually going to make life better for us

1067
01:01:23,600 --> 01:01:26,640
Speaker 2: and our friends and our loved ones. Like, I don't

1068
01:01:26,640 --> 01:01:28,280
Speaker 2: think that we can actually do that unless we understand

1069
01:01:28,280 --> 01:01:30,920
Speaker 2: how the world works and sometimes the world works in

1070
01:01:30,920 --> 01:01:33,720
Speaker 2: a way that doesn't necessarily look like we would most

1071
01:01:33,760 --> 01:01:37,880
Speaker 2: expect it to or most wish it to. But nevertheless,

1072
01:01:37,880 --> 01:01:39,480
Speaker 2: you have to kind of see how it works so

1073
01:01:39,520 --> 01:01:41,320
Speaker 2: that you can then figure out what's the best intervention

1074
01:01:41,680 --> 01:01:44,440
Speaker 2: that I can make into it, given where I'm at,

1075
01:01:44,480 --> 01:01:47,960
Speaker 2: the institutions that I work through, the coalitions that I

1076
01:01:47,960 --> 01:01:49,680
Speaker 2: can put together, and that kind of thing.

1077
01:01:50,880 --> 01:01:52,880
Speaker 1: Yeah, and I think this is a kind of like

1078
01:01:53,040 --> 01:01:56,680
Speaker 1: left field, like take on this too, but like there

1079
01:01:56,680 --> 01:01:59,680
Speaker 1: are lots of sort of you know, if you go

1080
01:01:59,760 --> 01:02:03,800
Speaker 1: through through like an economic price history or like an

1081
01:02:03,840 --> 01:02:06,840
Speaker 1: economic history of like the socialist period in China, right,

1082
01:02:06,960 --> 01:02:09,880
Speaker 1: like you will find them having to deal with like

1083
01:02:09,920 --> 01:02:12,360
Speaker 1: basically exactly the same shit where they have these like

1084
01:02:12,400 --> 01:02:16,360
Speaker 1: massive inflationary spikes that have to do with like basically

1085
01:02:16,400 --> 01:02:19,480
Speaker 1: these I mean for them, it was less supply chain

1086
01:02:19,480 --> 01:02:21,960
Speaker 1: bottle like supply chain breakdowns is like you know, they'd

1087
01:02:21,960 --> 01:02:23,800
Speaker 1: get the supply chain bottle next. They just didn't have

1088
01:02:23,880 --> 01:02:26,560
Speaker 1: way through them. And like people fucking that up, Like

1089
01:02:26,600 --> 01:02:30,800
Speaker 1: there was a like there was a decent argument that

1090
01:02:30,920 --> 01:02:33,080
Speaker 1: like that's part of what caused the Great Leap forward

1091
01:02:33,600 --> 01:02:36,720
Speaker 1: was people not fucking understanding that like not quite understanding

1092
01:02:36,720 --> 01:02:38,920
Speaker 1: how to like deal with their supply chain stuff and

1093
01:02:39,680 --> 01:02:43,960
Speaker 1: seeing this kind of like inflation like issue kicking in

1094
01:02:44,040 --> 01:02:46,919
Speaker 1: and being like fuck it were to do something that's

1095
01:02:46,960 --> 01:02:51,480
Speaker 1: completely nuts, and you know, that went like about as

1096
01:02:51,520 --> 01:02:54,720
Speaker 1: badly as like any attempt anyone has ever tried to do,

1097
01:02:55,440 --> 01:02:58,840
Speaker 1: like to fix any problem has ever gone. And the

1098
01:02:58,920 --> 01:03:01,200
Speaker 1: larger the number of people who actually understand how this

1099
01:03:01,240 --> 01:03:04,040
Speaker 1: stuff works, even in sort of like you know, even

1100
01:03:04,080 --> 01:03:06,400
Speaker 1: even on a kind of like not enormously grandeur level,

1101
01:03:06,480 --> 01:03:09,560
Speaker 1: the more likely you are to have someone who's in

1102
01:03:10,000 --> 01:03:13,160
Speaker 1: and it has the ability to make a decision where

1103
01:03:13,160 --> 01:03:18,320
Speaker 1: this stuff matters and you know it and like yeah,

1104
01:03:18,320 --> 01:03:20,000
Speaker 1: you could be like, oh, well, like the odds that

1105
01:03:20,040 --> 01:03:21,600
Speaker 1: we'rever gonna be in a place where this matters is

1106
01:03:22,240 --> 01:03:24,560
Speaker 1: like directly you're gonna be the one making decisions pretty low.

1107
01:03:24,600 --> 01:03:25,680
Speaker 3: But like, you know, it's not zero.

1108
01:03:25,800 --> 01:03:28,880
Speaker 1: It's happened to people before, and them not knowing about

1109
01:03:28,880 --> 01:03:32,720
Speaker 1: it was like a really apocable disaster, and we can

1110
01:03:32,800 --> 01:03:37,200
Speaker 1: you know, avoid doing stuff like that by having a

1111
01:03:37,200 --> 01:03:40,040
Speaker 1: better understanding of like how our supply chains function and

1112
01:03:40,040 --> 01:03:42,520
Speaker 1: what effect that has on sort of economic distribution and

1113
01:03:42,520 --> 01:03:46,680
Speaker 1: stuff like that. So Yeah, that's that's one of my

1114
01:03:46,760 --> 01:03:49,240
Speaker 1: two pitches. And my other pitch on this is, I

1115
01:03:49,440 --> 01:03:58,120
Speaker 1: I don't know how. It's hard to actually gauge the

1116
01:03:58,280 --> 01:04:01,680
Speaker 1: influence of discourse on policy makers, especially when they're as

1117
01:04:01,680 --> 01:04:05,000
Speaker 1: opaque as like the chairman of the Federal Reserve, but

1118
01:04:05,160 --> 01:04:08,960
Speaker 1: it is worth noting that we didn't get a like

1119
01:04:09,280 --> 01:04:14,960
Speaker 1: Vulcar style fifteen percent like interest rate increase, And I

1120
01:04:15,280 --> 01:04:17,360
Speaker 1: think there's a there's a non zero argument the fact

1121
01:04:17,360 --> 01:04:21,000
Speaker 1: that there were other alternative explanations to inflation like around

1122
01:04:21,040 --> 01:04:23,080
Speaker 1: and that enough people were pushing them, like is a

1123
01:04:23,160 --> 01:04:26,160
Speaker 1: reason why we didn't get one of these, like a

1124
01:04:26,240 --> 01:04:28,320
Speaker 1: Vulcar style thing, which would have pushed employment to like

1125
01:04:28,520 --> 01:04:31,400
Speaker 1: unemployment to like twenty five percent, destroy the entire global economy.

1126
01:04:32,200 --> 01:04:34,760
Speaker 1: And that, you know, like we could count that as

1127
01:04:34,760 --> 01:04:38,000
Speaker 1: a fucking w because as as bad as things are

1128
01:04:38,080 --> 01:04:41,720
Speaker 1: right now, like the world, the world where Jerome Powell

1129
01:04:41,720 --> 01:04:46,160
Speaker 1: pulls the trigger and hits the like hey, I'm now

1130
01:04:46,160 --> 01:04:48,960
Speaker 1: a monitorist, like I'm gonna I'm gonna decrease the money

1131
01:04:48,960 --> 01:04:51,760
Speaker 1: supply button and Jack's the interest wrapped like fifty percent,

1132
01:04:51,800 --> 01:04:55,360
Speaker 1: Like that world is so much worse than this one.

1133
01:04:55,440 --> 01:04:58,320
Speaker 1: It is it is difficult to imagine.

1134
01:05:00,320 --> 01:05:02,400
Speaker 3: Yeah, I think we dodged a bullet of like the

1135
01:05:02,440 --> 01:05:06,160
Speaker 3: twelve percent federal funds rate this time. Yeah, we've surpassed

1136
01:05:06,160 --> 01:05:12,960
Speaker 3: Monturism to an extent. Anyway, they're still doing some quantitative tightening. Yeah,

1137
01:05:13,000 --> 01:05:17,080
Speaker 3: but I don't know, at least as like a mortgage

1138
01:05:17,120 --> 01:05:19,919
Speaker 3: industry professional, I'm kind of hoping he keeps it under

1139
01:05:19,960 --> 01:05:23,320
Speaker 3: six for the federal funds, right.

1140
01:05:25,120 --> 01:05:26,600
Speaker 1: Yeah, I mean, we'll see what happens there. But it

1141
01:05:26,640 --> 01:05:29,440
Speaker 1: hasn't been we haven't gotten the apocalyptic reaction that like

1142
01:05:29,480 --> 01:05:33,960
Speaker 1: we very very easily could have, like to the extent that, like,

1143
01:05:34,120 --> 01:05:37,680
Speaker 1: I'm pretty sure if this, if this had happened under Obama,

1144
01:05:37,800 --> 01:05:40,440
Speaker 1: we'd be in like a recession that would have made

1145
01:05:40,480 --> 01:05:42,360
Speaker 1: two thousand and eight look like a joke right now.

1146
01:05:43,000 --> 01:05:46,240
Speaker 1: So yeah, Okay, I.

1147
01:05:47,360 --> 01:05:51,000
Speaker 2: Think that there's a lot more to discuss about it

1148
01:05:51,040 --> 01:05:53,840
Speaker 2: because and it seems like we're gonna probably have a

1149
01:05:53,880 --> 01:05:55,920
Speaker 2: part two to this at some point. Yeah, So we

1150
01:05:56,480 --> 01:05:59,240
Speaker 2: can probably get into it there because we have actually,

1151
01:05:59,240 --> 01:06:01,400
Speaker 2: when I say, the public about interest rates, which hadn't

1152
01:06:01,400 --> 01:06:05,280
Speaker 2: even bigger influence than this, Yeah, than these early essays

1153
01:06:05,280 --> 01:06:09,640
Speaker 2: that we're talking about. But but you know, like, at

1154
01:06:09,680 --> 01:06:12,040
Speaker 2: the end of the day, I think that what's important,

1155
01:06:12,920 --> 01:06:15,440
Speaker 2: what's most important about what we've discussed is this for me,

1156
01:06:16,400 --> 01:06:23,040
Speaker 2: like having this model which we developed, you know obviously

1157
01:06:23,120 --> 01:06:28,080
Speaker 2: like steve've developed it out of as an expansion of

1158
01:06:28,160 --> 01:06:30,760
Speaker 2: the logic of Fred Lee's work. And fred Lee was

1159
01:06:30,760 --> 01:06:35,000
Speaker 2: not actually particularly original. He just synthesized a whole bunch

1160
01:06:35,040 --> 01:06:37,520
Speaker 2: of stuff that existed previously, like these pricing studies by

1161
01:06:37,520 --> 01:06:40,360
Speaker 2: Gardner Means in the thirties and pricing studies over the

1162
01:06:40,360 --> 01:06:44,120
Speaker 2: next hundred years from all sorts of different people, you know,

1163
01:06:44,160 --> 01:06:46,800
Speaker 2: into his post Kanteene price theory and stuff like that,

1164
01:06:47,200 --> 01:06:54,000
Speaker 2: the cost plus markup stuff. But like like having a

1165
01:06:54,040 --> 01:06:57,480
Speaker 2: theory that's developed by looking at the world and building

1166
01:06:57,480 --> 01:07:00,280
Speaker 2: your abstractions up out of things that you can see,

1167
01:07:00,520 --> 01:07:04,040
Speaker 2: particularly in a field like economics that's so complex that

1168
01:07:04,120 --> 01:07:06,920
Speaker 2: you have to kind of start with like observable relations

1169
01:07:06,920 --> 01:07:11,960
Speaker 2: between actual institutions that exist in the world that empowered us,

1170
01:07:12,320 --> 01:07:15,120
Speaker 2: you know, that allowed us who really were just like

1171
01:07:15,200 --> 01:07:20,960
Speaker 2: four weirdos started a magazine right like for anarchistish weirdos,

1172
01:07:21,320 --> 01:07:24,760
Speaker 2: But that allowed us to see earlier than like most people,

1173
01:07:24,800 --> 01:07:27,400
Speaker 2: including a lot of like credential professionals, what was going

1174
01:07:27,480 --> 01:07:30,720
Speaker 2: to happen in the future, at least the near future,

1175
01:07:31,000 --> 01:07:33,320
Speaker 2: like you know, the next like like like two to

1176
01:07:33,400 --> 01:07:35,760
Speaker 2: five years from that vantage point, which was like twenty

1177
01:07:35,800 --> 01:07:40,960
Speaker 2: twenty one. That is really incredible, And I'm not saying

1178
01:07:41,000 --> 01:07:44,680
Speaker 2: that to brag, like, although it is certainly something that

1179
01:07:44,680 --> 01:07:47,640
Speaker 2: I that I take a sick pleasure in. It's also

1180
01:07:48,240 --> 01:07:51,800
Speaker 2: informative because think about all the things about which we

1181
01:07:52,000 --> 01:07:56,880
Speaker 2: don't have that concrete material picture. The question of how

1182
01:07:56,880 --> 01:07:59,840
Speaker 2: we're going to get fossil fuels out of agricultural production

1183
01:08:00,480 --> 01:08:05,680
Speaker 2: without causing famines, right, the question of what do you

1184
01:08:05,720 --> 01:08:08,320
Speaker 2: do now that we have the Internet, Like how do

1185
01:08:08,360 --> 01:08:10,760
Speaker 2: you govern that? Because it's clearly not working under these

1186
01:08:10,760 --> 01:08:14,600
Speaker 2: giant vertically integrated media oligopolis with the platforms, But it's

1187
01:08:14,600 --> 01:08:16,080
Speaker 2: also not going to work if we put it under

1188
01:08:16,080 --> 01:08:18,160
Speaker 2: the government, So what the hell do we do about it?

1189
01:08:18,439 --> 01:08:21,120
Speaker 2: You know? It's it's like like there's all these key

1190
01:08:21,280 --> 01:08:24,599
Speaker 2: questions that we just don't have even like working models

1191
01:08:24,640 --> 01:08:26,479
Speaker 2: of like of like what the world is even like

1192
01:08:26,680 --> 01:08:31,040
Speaker 2: right now much less like you know, what could plausibly

1193
01:08:31,080 --> 01:08:34,080
Speaker 2: be done with it right to make it a better

1194
01:08:34,120 --> 01:08:37,920
Speaker 2: place And obviously, Like, you know, some of this sounds

1195
01:08:37,920 --> 01:08:39,960
Speaker 2: like stuff that the government should do, but a lot

1196
01:08:39,960 --> 01:08:42,320
Speaker 2: of this is actually stuff that social movements need. If

1197
01:08:42,360 --> 01:08:44,160
Speaker 2: you think the rent is too dam high in your city,

1198
01:08:44,280 --> 01:08:46,839
Speaker 2: and you organize a tenancy union that has real political

1199
01:08:46,920 --> 01:08:49,320
Speaker 2: muscle and you actually like have the ability to do

1200
01:08:49,400 --> 01:08:52,720
Speaker 2: stoppages or other actions that can really like bully the

1201
01:08:52,760 --> 01:08:55,840
Speaker 2: local city government. Okay, but what do you ask for?

1202
01:08:56,360 --> 01:08:58,479
Speaker 2: What do you demand or what do you try to

1203
01:08:58,520 --> 01:09:01,840
Speaker 2: put into place yourself using your own money? Like, what

1204
01:09:01,880 --> 01:09:03,920
Speaker 2: do you do if the rent is too damn high?

1205
01:09:03,920 --> 01:09:05,680
Speaker 2: How do you get it lower? And it's like, oh, well,

1206
01:09:05,680 --> 01:09:07,519
Speaker 2: there shouldn't be rent, we should have abolished it. Okay,

1207
01:09:07,960 --> 01:09:10,879
Speaker 2: how do you do that? You know, you need models

1208
01:09:11,080 --> 01:09:13,640
Speaker 2: of the world, and that's what we've been trying to

1209
01:09:13,920 --> 01:09:17,200
Speaker 2: kind of build in the magazine more than anything else,

1210
01:09:17,280 --> 01:09:21,280
Speaker 2: especially in our ECON coverage. So there's a lot more

1211
01:09:21,320 --> 01:09:24,320
Speaker 2: that happened after this. We'll probably have a part two,

1212
01:09:24,400 --> 01:09:27,040
Speaker 2: but I just to wrap up the story up to then.

1213
01:09:27,240 --> 01:09:29,200
Speaker 2: So we did launch the magazine, we did put out

1214
01:09:29,200 --> 01:09:33,160
Speaker 2: Steve's essay, but then a really remarkable thing happened, which

1215
01:09:33,200 --> 01:09:35,439
Speaker 2: is that we started getting like all magazines do people

1216
01:09:35,439 --> 01:09:39,320
Speaker 2: who came in into the slush pile who were inspired

1217
01:09:39,479 --> 01:09:42,160
Speaker 2: by Steve's work, and we're like, this makes the most

1218
01:09:42,200 --> 01:09:45,160
Speaker 2: sense of anything that I've heard, and I want to

1219
01:09:45,200 --> 01:09:48,719
Speaker 2: build on it too. So we started publishing other essays

1220
01:09:48,760 --> 01:09:51,160
Speaker 2: that we're kind of building on the research program that

1221
01:09:51,640 --> 01:09:54,920
Speaker 2: Steve kind of got us started on. And although our

1222
01:09:55,439 --> 01:09:58,559
Speaker 2: sort of influence was difficult to calculate in terms of, like,

1223
01:09:58,680 --> 01:10:01,240
Speaker 2: you know, how much we influence the discussion, you know,

1224
01:10:01,320 --> 01:10:03,479
Speaker 2: in these early stages before the magazine was even up

1225
01:10:03,479 --> 01:10:07,759
Speaker 2: and running. Afterwards, after we kind of publish the people

1226
01:10:07,760 --> 01:10:10,439
Speaker 2: that I'm talking about, some of those pieces have actually

1227
01:10:10,600 --> 01:10:13,320
Speaker 2: definitely influenced the conversation in really exciting ways, and I

1228
01:10:13,320 --> 01:10:15,160
Speaker 2: think that we can talk about some of that next time.

1229
01:10:15,479 --> 01:10:18,799
Speaker 1: Yeah, so that will be at some point in the future.

1230
01:10:18,840 --> 01:10:20,600
Speaker 1: I don't know, I'll lock up put down a definitive

1231
01:10:21,400 --> 01:10:24,360
Speaker 1: date when it happens, because I don't know. The world

1232
01:10:24,439 --> 01:10:29,880
Speaker 1: is chaos and this. Yeah, but however, Comma, this story

1233
01:10:29,920 --> 01:10:33,880
Speaker 1: will continue in part two dot dot dot dot dot Yeah,

1234
01:10:33,960 --> 01:10:37,400
Speaker 1: So Steve Jamc thank you both so much for joining me.

1235
01:10:37,720 --> 01:10:41,479
Speaker 1: And yeah, do you have where where where can people

1236
01:10:41,520 --> 01:10:43,720
Speaker 1: go to find the magazine? And you two if they

1237
01:10:43,760 --> 01:10:44,439
Speaker 1: want to find.

1238
01:10:44,320 --> 01:10:49,679
Speaker 3: You, Oh, you can go to strangemags dot coop. That's

1239
01:10:49,720 --> 01:10:53,240
Speaker 3: our main website. If you want to subscribe, we have

1240
01:10:53,280 --> 01:10:57,600
Speaker 3: digital subscriptions starting at five dollars and Prince monthly is

1241
01:10:57,640 --> 01:11:00,519
Speaker 3: seven ninety nine. They're also annual subscripts too.

1242
01:11:00,920 --> 01:11:04,880
Speaker 2: Yeah, and please do consider subscribing or donating. You can

1243
01:11:04,920 --> 01:11:07,680
Speaker 2: actually donate any amount of money to us. We're not

1244
01:11:07,760 --> 01:11:10,280
Speaker 2: a nonprofit, so it's not tax deductible, but it would

1245
01:11:10,320 --> 01:11:14,240
Speaker 2: be a really helpful donation because any dollar that we

1246
01:11:14,320 --> 01:11:17,120
Speaker 2: get that doesn't go to our capitalist overlords, you know,

1247
01:11:17,240 --> 01:11:18,680
Speaker 2: for for the services that we have to use to

1248
01:11:18,720 --> 01:11:21,439
Speaker 2: keep the magazine going, all of that goes right now

1249
01:11:21,439 --> 01:11:23,439
Speaker 2: to our writers. And we try to pay our writers

1250
01:11:23,479 --> 01:11:28,320
Speaker 2: above market rate for magazines of our size, and you know,

1251
01:11:28,520 --> 01:11:31,479
Speaker 2: to do that is very difficult, you know, we need

1252
01:11:31,520 --> 01:11:34,320
Speaker 2: we need to. So if you want to support worker

1253
01:11:34,360 --> 01:11:38,479
Speaker 2: controlled media production that's financially independent, we don't have any

1254
01:11:38,520 --> 01:11:41,880
Speaker 2: big foundations, you know, like telling us what to write

1255
01:11:42,680 --> 01:11:45,639
Speaker 2: or things like that. It's all like basically small donations

1256
01:11:45,640 --> 01:11:48,479
Speaker 2: and subscriptions, like you know, if you want to keep

1257
01:11:48,479 --> 01:11:50,439
Speaker 2: that kind of media alive and keep this kind of

1258
01:11:50,439 --> 01:11:55,840
Speaker 2: economic analysis alive along with our cultural philosophy, philosophical, historical, anthropological,

1259
01:11:55,840 --> 01:12:01,519
Speaker 2: literary stuff. Then please consider it because we could really

1260
01:12:01,600 --> 01:12:02,280
Speaker 2: use the support.

1261
01:12:02,800 --> 01:12:07,360
Speaker 1: Yeah, so go do that. Yeah, and go read some

1262
01:12:07,439 --> 01:12:09,400
Speaker 1: of the some of the work that you all have

1263
01:12:09,439 --> 01:12:13,400
Speaker 1: done on inflation because it's really good. And yeah, this

1264
01:12:13,720 --> 01:12:16,880
Speaker 1: is prediculate. Appened here. You can find us in the

1265
01:12:17,000 --> 01:12:21,120
Speaker 1: usual places. And yes, go go, go into the world

1266
01:12:21,280 --> 01:12:22,480
Speaker 1: and cause mischief.

1267
01:12:27,280 --> 01:12:29,799
Speaker 2: It could happen here as a production of cool Zone Media.

1268
01:12:29,880 --> 01:12:32,519
Speaker 2: For more podcasts from cool Zone Media, visit our website

1269
01:12:32,600 --> 01:12:34,800
Speaker 2: cool zonemedia dot com or check us out on the

1270
01:12:34,840 --> 01:12:38,240
Speaker 2: iHeartRadio app, Apple Podcasts, or wherever you listen to podcasts.

1271
01:12:38,840 --> 01:12:40,960
Speaker 2: You can find sources for it could Happen here, updated

1272
01:12:41,040 --> 01:12:45,080
Speaker 2: monthly at cool zonemedia dot com slash sources. Thanks for listening.