Speaker 1: Can we record this episode? Sure, let's start. I'm sure,
Speaker 1: I'm sure we could use some of that as the opening. Hi,
Speaker 1: welcome to It could happen here the podcast that is
Speaker 1: about medical ethics in the eighteen sixties, not today, but
Speaker 1: fair Yeah, no to today today. It's it's me because
Speaker 1: we're long and we're doing an episode about inflation and
Speaker 1: speaking of medical ethics while speaking of kinks. Actually, the
Speaker 1: moment I said that, I was like, I have opened
Speaker 1: myself up for that was some of the broad side
Speaker 1: that was from some of the first weird interport internet
Speaker 1: porn I came apart. It was specifically the cast of
Speaker 1: duck Tails being like, okay, let's get to the topic
Speaker 1: of the episode. That is, this episode is now about
Speaker 1: duck Tails, inflation, fetish pornography. That is enough pre rebel
Speaker 1: CHRISTI for what do you have for us today? Yeah,
Speaker 1: so we're talking about inflation. Um, we're talking about economic inflation.
Speaker 1: To be fair, this is somebody was making money off
Speaker 1: of that inflation. I'll tell you that much. God. I
Speaker 1: mean one thing, duck Tails actually does crossover because of
Speaker 1: Scrooge McDuck and his giant and his giant. That's true,
Speaker 1: and that actually it does. That's right, you can tell
Speaker 1: you right now, that's not the only thing about him
Speaker 1: that was inflated. Oh boy, talking about is dick. Okay,
Speaker 1: let's let's keep it, keep it on tracked. Okay, So
Speaker 1: all right, all right, if people are inflation, it's not good.
Speaker 1: It's pretty high. It's I probably should have looked up
Speaker 1: the inflation rate, isn't it, Like, yeah, I think it's
Speaker 1: every it keeps going point six. Yeah. Yeah. But every
Speaker 1: time someone says it's this or it's that, people are like,
Speaker 1: well no, but they also change these these and these
Speaker 1: indicators five years ago and these other ones ten years ago.
Speaker 1: So really it would be this, and there's judging who's
Speaker 1: securate about that? This? This is the thing. I didn't
Speaker 1: put this in the episode, but there's a thing that
Speaker 1: if you study economics you will realize pretty quickly is
Speaker 1: that all of the like basically all of the aconstancy
Speaker 1: so we have are fucking bullshit, and they're like are
Speaker 1: basically they're they're they're really really fake, Like yeah, like
Speaker 1: we we don't like one of one of the big
Speaker 1: ones that you know, is like one of the underlying
Speaker 1: things that makes all economics fake is that no one
Speaker 1: knows how to actually calculate the value of of just
Speaker 1: like a factory. Like like if if you have like
Speaker 1: a bundle of goods, right, and they're not the same thing,
Speaker 1: so I don't know, you have two factories they make
Speaker 1: different things. Actually figuring out what the value of that
Speaker 1: is is like fucking impossible, and the like the way
Speaker 1: that it's done, and like if if you look at
Speaker 1: like like there are these like the um producer statistical animals, right,
Speaker 1: and the values that are in the like the un
Speaker 1: ci people animals are literally them guessing because because the
Speaker 1: thing is like the value depending on like the actual
Speaker 1: value of the thing changes right depending on where it is,
Speaker 1: unlike a supplied tomanker blah blah blah blah. And so
Speaker 1: they literally just tell the people who are doing the
Speaker 1: econometrics should just like pick a pick a random like
Speaker 1: price that they that that they think is equilibrium. So
Speaker 1: it's it's completely bullshit. It's it's it's bullshit, like literally
Speaker 1: all the way down. It's nonsense. All of the indexes
Speaker 1: are wrong. Uh yeah. Unfortunately the field of economics doesn't
Speaker 1: really care about this that much, So we're gonna have
Speaker 1: to sort of take them seriously. And the thing I
Speaker 1: specifically want to talk about today was there was a
Speaker 1: really interesting paper that was produced by two economists at
Speaker 1: the DC Federal Reserve, M. David Rattner and J. Sim
Speaker 1: about why inflation happens, which is called Who Killed the
Speaker 1: Phillips Curve and Murder Mystery, and which we're talking about
Speaker 1: this for two reasons. One uh, one because it's funny,
Speaker 1: because I what is going to happen over the course
Speaker 1: of this paper is that the Federal Reserve has combat
Speaker 1: Federal Reserve has discovered Marxism, and they are going to
Speaker 1: attempt to solve this mystery of inflation by by applying
Speaker 1: by by by applying marks. And the second thing, the
Speaker 1: second reason I want to talk about this is that
Speaker 1: it reveals something that's very very important about the current
Speaker 1: political situation, which is that both economists and like the
Speaker 1: rest of the ruling class in general, do not understand
Speaker 1: what inflation is or what they sort of unders that
Speaker 1: kind of understand what it is. They don't know what
Speaker 1: causes it um And before we go on here, I
Speaker 1: should like explain what inflation is because most people I
Speaker 1: don't know. The way I got talked about I talked
Speaker 1: about about this with Garrison like a few days ago
Speaker 1: about like like the way people get taught about inflation
Speaker 1: is that inflation is when like your money is worth less. Yeah,
Speaker 1: when when the government prints more money so to each
Speaker 1: individual dollar is worth less because it's more of them circulating. Yeah. Yeah.
Speaker 1: And and this is like this is this is propaganda. Um,
Speaker 1: that is not what inflation is. Inflation is literally just
Speaker 1: when prices go up. And if you think about it,
Speaker 1: like okay, that that's kind of the same thing sort
Speaker 1: of because if prices go up, like your your you know,
Speaker 1: your your dollars are worth less money, right, But mostly
Speaker 1: inflation isn't about the amount of money becoming less. Mostly
Speaker 1: it's about something happens that that makes things cost more. Um.
Speaker 1: And you know and and likely yeah, like the it
Speaker 1: is possible for you to get inflation because the government
Speaker 1: pretty too much money. But like mostly are like symbiotic, right,
Speaker 1: government with your money because prices are going up so
Speaker 1: that people need more money in circulation to buy things. Um.
Speaker 1: You saw this happen a lot with the COVID pandemic. Um.
Speaker 1: So it's it's that both these things kind of feed
Speaker 1: off each other and contributing sort of. But but I
Speaker 1: think something that's important to understand about this is that
Speaker 1: if if you look into the actual econ stuff, like
Speaker 1: the supply of money, like how much money there is
Speaker 1: in the world, has very are a little do with inflation.
Speaker 1: It only really has effects inflation when you're doing with
Speaker 1: like I don't like nineteen thirties twenties Germany or like
Speaker 1: China after World War Two, where just there's literally just
Speaker 1: like you know, the government prints so much money that
Speaker 1: like like my my I have my family has a
Speaker 1: bunch of stories about like literally carrying out baskets full
Speaker 1: of money in China to buy a train ticket because
Speaker 1: like everybody knows about buy maur Germany too is like
Speaker 1: the weird arrows full of cash and stuff. Yeah, but
Speaker 1: this stuff that's actually it's really rare, and it's like
Speaker 1: the reason everyone knows. But when it happens is that
Speaker 1: it's only happened. It's happened like four or five times,
Speaker 1: and mostly that's not that's not what why inflation happens.
Speaker 1: And if you look at inflation right now, for example,
Speaker 1: there's the prices of like a whole bunch of stuff
Speaker 1: from like food to like microprocessors are going up because
Speaker 1: a it's harder to produce things because of COVID b
Speaker 1: our supply chains are collapsing, and see because Russian invaded
Speaker 1: Ukraine and like absolutely annihilated an enormous portion of the
Speaker 1: global food supply. And this that stuff causes prices to
Speaker 1: go up, right because now it's harder to make a thing,
Speaker 1: and because it's harder to make the thing, that thing
Speaker 1: costs more. And this has you know, this has literally
Speaker 1: nothing to do with with the money supply, right, Like
Speaker 1: it doesn't have anything to do with how much money
Speaker 1: in a circulation. UM. And there's another reason that that
Speaker 1: that will get into kind of at the end that
Speaker 1: inflation happens that is not also has nothing to do
Speaker 1: with money, which is that corporations just do price markups
Speaker 1: because they know people will pay for it. And that's
Speaker 1: that's happening to UM. But having an explanation of like
Speaker 1: why inflation is happening is really really politically important, even
Speaker 1: even if the explanation that you have is completely wrong.
Speaker 1: It it allows you to do really powerful things politically.
Speaker 1: On Like, one of the ways that neoliberalism sort of
Speaker 1: took power is that in in in the in the
Speaker 1: seventies and eighties, especially in sort of sort of the
Speaker 1: the seventies in particular, both both in academia and a
Speaker 1: sort of politics written large. There's this problem where you
Speaker 1: have a bunch of these old Anes and economists who
Speaker 1: are like Kensians are like they're big on like using
Speaker 1: government spending to keep the economy running, and like you
Speaker 1: get a lot of welfare programs. But yeah, it was like, okay,
Speaker 1: you can avoid crises by having the government to spending.
Speaker 1: But the problem is that like they couldn't explain why
Speaker 1: inflation was happening in the seventies. Um, and this was
Speaker 1: because the Kenyans working the Kensians are working out something
Speaker 1: called the Phillips curve, and we have to do a
Speaker 1: little bit of econ bullshit. But it's not that complicated.
Speaker 1: I promise I survived it, so it'll be fine. So
Speaker 1: the Phillips curve says that like the closer you get
Speaker 1: to full employment, and like the lower the unemployment rate gets,
Speaker 1: the higher inflation rgetts. And this this sort of really
Speaker 1: starts to kick in around from like five percent unemployment
Speaker 1: to like four percent to three percent unemployment. Uh, the
Speaker 1: inflation rate like spikes. And you know the reason this
Speaker 1: is supposed to happen is because the lower the lower
Speaker 1: the unemployment rate is uh way you start to rise
Speaker 1: because as there's lots of people who' unemployed, you have
Speaker 1: to pay them more money to get them to work.
Speaker 1: And yeah, so this is and and the theory behind this,
Speaker 1: right is that like wages increasing is what is what
Speaker 1: causes inflation happened because it makes everything costs more. Now
Speaker 1: there's a simple one obvious this is like, this is
Speaker 1: a very simple and obvious solutions. So the problem of
Speaker 1: why like inflation happens, and like all simple and obvious solutions,
Speaker 1: it is also wrong. The Philips curve does not explain inflation.
Speaker 1: I'm gonna I'm gonna refer everyone in the chat to
Speaker 1: this tweet that I made, and I want you to
Speaker 1: look at exhibit A, which is the Phillips curve, And
Speaker 1: then I want you to look at exhibit B, which
Speaker 1: is I actually plotted unemployment versus inflation in the US
Speaker 1: from like nineteen until one. And I want to get
Speaker 1: a description of what the second graph looks like, because
Speaker 1: it's supposed to look like a curve. Well, so the
Speaker 1: first the first graph we have we have an excite
Speaker 1: an X Y graph of the Phillips curve, starting at
Speaker 1: eight percent closer to the why access and then swooping
Speaker 1: down and then flattening out at a percent on the
Speaker 1: x axis for the unemployment rate versus the inflation right.
Speaker 1: And then for the next graph we have, Um, what's
Speaker 1: not a curve? What is instead inflation and unemployment graft? Um?
Speaker 1: Except it's zig zagging everywhere like dark sides omega beams. Um,
Speaker 1: it is not, in fact doing a curve. My my,
Speaker 1: my favorite thing about this is that um, like multiple
Speaker 1: multiple like, and this happens with both unemployment and inflation. Uh,
Speaker 1: there are multiple unemployment rates that are associated with different
Speaker 1: inflation rates, and multiple inflation rates that that are all
Speaker 1: that that generate two different rates of unemployments. It's incredible.
Speaker 1: It is it is, it is, it is a it
Speaker 1: is an is an absolute sort of monument to how
Speaker 1: much the stuff doesn't work. And there's a really good
Speaker 1: reply to your graft tweet that says economists of the
Speaker 1: modern day court astrologers it's basically true, like, which is funny,
Speaker 1: I mean astrologers, though we're probably right. More often that's
Speaker 1: true well, I mean they're simply guessing is it a
Speaker 1: good idea to invade this country or not? Fifty odds
Speaker 1: it works out for you, right if you're if you're
Speaker 1: trying to predict, like I don't know, the SNP five,
Speaker 1: there's a lot more variables. Yeah, And and this is
Speaker 1: this is one of the things that like, okay, if
Speaker 1: if you can be the person who like walks into
Speaker 1: a lecture and goes the emperor has no clothes, you
Speaker 1: can like attain immediate ultimate power. Because again this stuff
Speaker 1: is like so it's so it's so trivially and easily
Speaker 1: like falsifiable that like I you know, like built in
Speaker 1: Friedman is able to do this. And you know, okay,
Speaker 1: so I actually abut the false curve, the Phillips curve
Speaker 1: that like I showed you that it's like a curve.
Speaker 1: It's like a very simple one. There's all of these
Speaker 1: really convoluted like modifications to it. Um. There's you know,
Speaker 1: if you look like the new the New Kings in
Speaker 1: Phillips curve or whatever they they've done, they've got a
Speaker 1: bunch of math to it to try to like make
Speaker 1: it kind of work. Um. The problem is that it
Speaker 1: doesn't work. Uh, there's there there's a there's another Phillips
Speaker 1: curve that's been that was like modified. But then Neil
Speaker 1: By the new classical economists and the new classical economists
Speaker 1: were like, this thing doesn't work. Okay, here's some modifications
Speaker 1: you have to put in, but that curve also doesn't work. Uh,
Speaker 1: and you know, and this is a real problem, right
Speaker 1: because Okay, so if if if this inflation explanation of
Speaker 1: why inflation happens doesn't work, like what is actually happening. Um.
Speaker 1: Milton Friedman, who sort of like takes the the economic
Speaker 1: scene by storm by like predicting a lot of the
Speaker 1: inflation in the seventies and like sort of having an
Speaker 1: answer to it. Is his his argument is that inflation
Speaker 1: is they print too much money and there's inflate And
Speaker 1: this is kind of a gross oversimplification of of what
Speaker 1: his actual point is. But it's it's it's it's more
Speaker 1: true than any of like Freedman's over simplifications. So I'm
Speaker 1: just I'm just gonna believe it at that. And this
Speaker 1: is what the Federal Reserve and like pull Volker used
Speaker 1: to try to try to fight inflation nineteen seventy nine,
Speaker 1: he Volker does. She just tries to massively reduce the
Speaker 1: money supply. The problem is that this didn't work. Like
Speaker 1: inflation in like inflation is still like above campertime. I
Speaker 1: think it's bikes to like like fifteen percent or something
Speaker 1: like into like nineteen four so and and just based
Speaker 1: on how much larger Huey, Dewey and Louis got sometimes
Speaker 1: two or three. Do you know who else wants? Oh boy,
Speaker 1: that's right, Garrison. All of our sponsors are into duck
Speaker 1: Tails inflation fetish pornography. This is it could happen here
Speaker 1: a podcast sponsored by the concept of masturbating to the
Speaker 1: cast of duck Tails getting inflated by bicycle pumps. Oh
Speaker 1: we're back. Well I've done my part. Yeah, so okay,
Speaker 1: So so we're left off. Right, There's there's a bunch
Speaker 1: of inflation happening. Some of it is happening to Ducktail's characters,
Speaker 1: most of it is happening to the economy. Uh. Paul
Speaker 1: Volker has tried to stop the inflation by like making
Speaker 1: there be less money, and this has done nothing other
Speaker 1: than like dramatically increasing unemployment rate. Now, the problem with again,
Speaker 1: Freedman sort of explanation of of of inflation is that
Speaker 1: inflation persistence of the eighties and it only stops after
Speaker 1: insert foreshadowing noise here. Uh, Reagan crushes the unions, and
Speaker 1: we will come back to is to solve inflation, we
Speaker 1: should stop all unions. That is your official position. No wow, okay,
Speaker 1: but this, this is this is part of the position
Speaker 1: of the of the Marxist federal reserves. So we will
Speaker 1: we will get there a second. So alright, alright, So,
Speaker 1: so the thing I've been describing that that freeman is
Speaker 1: pushing about the money's way, this is called monitorism, and
Speaker 1: monitorism is like the fakest theory of inflation, like it's
Speaker 1: it's a it's a theory of inflation so fake that
Speaker 1: like even other like even other like neo classical economists
Speaker 1: don't accept it, like none of the other different neoliberal
Speaker 1: schools of economics, like every single one of them look
Speaker 1: at this and was like this is nonsense, Like what
Speaker 1: what are you doing? But you know, so okay. So
Speaker 1: that though, it's like it's like the TikTok astrology compared
Speaker 1: to the neoliberal court astrology. Yeah, it's it's it's all.
Speaker 1: It's like it's it's it's somehow an even faker explanation
Speaker 1: of this. But you know this, this brings us back
Speaker 1: to like where we started, which is that like, okay,
Speaker 1: so if the monitorist stuff doesn't work, and the Phillips
Speaker 1: curve also doesn't work, Uh, what is causing inflation? And
Speaker 1: the answer from inside of the like the actual field
Speaker 1: of economics is that nobody knows. Um. Here's Daniel k Rollo,
Speaker 1: who was the former Federal resent who was a former
Speaker 1: Federal Reserve Bank governor, and was a member of the
Speaker 1: Federal Reserve Board. So he's a he's a very very
Speaker 1: high ranking like guy inside the sphere of people who
Speaker 1: try to apply econ ship and uh, here's here's the
Speaker 1: quote that he gave about it. In quote, the substantive
Speaker 1: point is that we do not at present have a
Speaker 1: theory of inflation dynamics that works sufficiently well to be
Speaker 1: of use for the business of real time monetary policy making.
Speaker 1: So what are he's saying there is like if you
Speaker 1: translate that out of econs because you don't even really
Speaker 1: have to translate that out of econs much. What he's
Speaker 1: saying is that he no one has any idea why
Speaker 1: inflation works, and none on the models work well enough
Speaker 1: to let you like try to deal with inflation if
Speaker 1: you're you know, the people who control the money supply,
Speaker 1: like the Fed. Now economists like we we we've seen
Speaker 1: in the past, if you've been following this stuff in
Speaker 1: the past like ten years issue, especially in the last five,
Speaker 1: economists have been getting like increasingly desperate to explain what
Speaker 1: the fund is happening, and they're getting increasingly increasingly desperate
Speaker 1: right now because you know, hey, inflation is back, and
Speaker 1: that that brings us to the paper I mentioned at
Speaker 1: the top of the episode, which who Who killed the
Speaker 1: Phillips Curve? And Murder Mystery, which opens talking about two
Speaker 1: sort of massive recent failures of the like new Keynsie
Speaker 1: and we fixed we we we added variables to the
Speaker 1: Phillips curve until it like sort of kind of works
Speaker 1: ish maybe, But you know, the only thing they're talking
Speaker 1: about two of its sort of like incredibly massive failures.
Speaker 1: The first is in two thousand eight, where there's you know,
Speaker 1: there's a recession. Oh really, what happened economically? There's a recession.
Speaker 1: But what's interesting about this, right is that, Okay, so
Speaker 1: if you think about this, there's an inflation is there's
Speaker 1: a recession, unemployment skyrockets, this should cause deflation. Well, you know,
Speaker 1: because you know what happened to us in eight the
Speaker 1: official Duct Hills video game came out. So I think
Speaker 1: this could we are through the looking glass people, you know,
Speaker 1: I mean, this is this is this is not any
Speaker 1: more bullshit than any of the other stuff they're doing.
Speaker 1: So like, but you know, okay, but there's there's this
Speaker 1: there's this thing that happens. We're like, okay, the like
Speaker 1: the inflation that the inflation rate should have been decreasing
Speaker 1: and it just stays the same. And economists are like
Speaker 1: what And this is this is called the missing deflationary period.
Speaker 1: There's there's a second thing where d dren this sort
Speaker 1: of like quote unquote economic recovery and the last like
Speaker 1: ten years ish until basically until before the pandemic, employment
Speaker 1: rates dropped really really low, and this should have started,
Speaker 1: this should have triggered inflation, but it doesn't. And you know, okay,
Speaker 1: And so the people who run the Philip Philip script,
Speaker 1: like the economist are looking at this and they're like, okay,
Speaker 1: what do we do? And the fed economist solution is
Speaker 1: again and I share you not Marxism, and more specifically,
Speaker 1: the solution is neo Marxism. Yeah, yeah, this is this
Speaker 1: is this is this is something else I'm sort of
Speaker 1: excited about, which is that I finally get to tell
Speaker 1: the world what a neo Marxist is, because this is
Speaker 1: technically a thing. It's just that none of the people
Speaker 1: who talked about neo Marxists have any idea what it is.
Speaker 1: The most modern neo marxis actually really well, I mean,
Speaker 1: I guess you could have okay, what what what? Once
Speaker 1: we explain it, I will, I will talk about how
Speaker 1: you could theoretically have a post modern neon Marxist. But
Speaker 1: I don't think I ever met whoa how welcome Welltory terms? Okay, okay,
Speaker 1: so I'm excited to hear this. Yeah yeah, all right.
Speaker 1: So what what is happening here is that there's an
Speaker 1: old joke in Marxist circles that like, the most advanced
Speaker 1: Bushwire economist is fifty years behind the most vulgar Marxist.
Speaker 1: And this is this coming true. Uh, the Federal Reserve
Speaker 1: economists are developing, they're trying to make a new Phillips curve,
Speaker 1: and the new Phillips curve is what they call it
Speaker 1: Collecki and Phillips curve because it's based for the guys
Speaker 1: new curve just drops. Yeah, it literally is except this
Speaker 1: this this is this is this is the neo Marxist curve.
Speaker 1: And it's based on the works it's kind of loosely
Speaker 1: based on him, but it's just based on the work
Speaker 1: of a Polish Marxist economist named Mikail Collecki and Clucky
Speaker 1: is a he's a very very weird Marxist, like by
Speaker 1: Marxist standards, is extremely weird. And to explain why this is,
Speaker 1: we we have to we have to speed We're gonna
Speaker 1: have to speed run Marxism one oh one. So I'm
Speaker 1: going to attempt to explain Marxism in one page. All right,
Speaker 1: let's okay, okay, Mark Mark Marxism one oh one. Right.
Speaker 1: You have a worker. She has to go find a
Speaker 1: job and sell her labor to like get food to eat,
Speaker 1: because otherwise you can't support herself. Um, so she goes
Speaker 1: to work at a factory that makes like hospital stretchers.
Speaker 1: Now under capitalism, and this is this is this is
Speaker 1: this is one thing I'm explaining. This is this is
Speaker 1: like the this is the orthodox Marxist interpretation. So the
Speaker 1: people who are about to scream at me for a
Speaker 1: million years about how this is wrong, I'm explaining the
Speaker 1: orthodox position. Damnit, uh Marxism here? Yeah? No, okay, yeah,
Speaker 1: Chris quick, question what what? What? What? What was Marx?
Speaker 1: So Marx was a experiment in psychological experiment run by
Speaker 1: the by Harvard University was concluded in but he wrote,
Speaker 1: he wrote a bunch of books. And one of those
Speaker 1: books is Capital, and and it in capital. So okay,
Speaker 1: so you have you have your worker, right, and she
Speaker 1: she she works to make hospital stretchers. And the thing
Speaker 1: that makes the hospital stretcher have value is the amount
Speaker 1: of time that it takes a worker to make it.
Speaker 1: So under under this, this sort of understanding of what
Speaker 1: Marxism is, value is just labor time. Right, The value
Speaker 1: of an object is how many hours of work it
Speaker 1: takes to make a thing. Now this labor time or
Speaker 1: you know, like and like, how how long it takes
Speaker 1: to make the thing? Uh, The value of it it
Speaker 1: isn't measured by like how long it takes aim like
Speaker 1: an individual cot, right, It's measured by like how long
Speaker 1: on average it takes society to make. So you know,
Speaker 1: for example, like you said, this is in Finland, right,
Speaker 1: it's based on how long on average it takes to
Speaker 1: make a hospital stretcher in Finland, not like you know,
Speaker 1: how long it takes to make him like Olivia or something. Um.
Speaker 1: And this is the technical term for the for like
Speaker 1: this thing is is socially necessary labor time. UM. So,
Speaker 1: our worker like works for through her day and after
Speaker 1: six hours, she's produced enough value to support herself. She
Speaker 1: can buy food, she can pay her rent, she can
Speaker 1: like I don't know if you buy a car or something.
Speaker 1: But she still also worked two more hours of the
Speaker 1: day and during that time, the labor that she's doing
Speaker 1: just goes to the boss. And this is called this
Speaker 1: is called surplus value, like the amount of time that
Speaker 1: you're working where you're working for the boss and not
Speaker 1: to like support yourself. Uh. This this, this is called
Speaker 1: surplus value. It is the objective route of exploitation and Marxism.
Speaker 1: I yeah, it's it's it's it's it's the value that
Speaker 1: goes directly to your boss. That and the reason that
Speaker 1: like your boss can just steal this from muse because
Speaker 1: they have the factor and you don't. So if you
Speaker 1: want to produce something for them to survive, you have
Speaker 1: to go to him and that this is This is
Speaker 1: called the ownership of the means of production. Now, the
Speaker 1: price in theory of of this hospital structure, right is
Speaker 1: based value on its value or how many hours it
Speaker 1: takes to produce it. Um and how precisely you get
Speaker 1: from dollars as a unit of measurement from two dollars
Speaker 1: from time is a subject of an absolutely interminable debate
Speaker 1: called the transformation problem. If you want to go read
Speaker 1: more about it. I have wasted probably four years of
Speaker 1: my life reading about it. I don't recommend it, but
Speaker 1: the answer is you can sort of kind of get
Speaker 1: it to work if you funk with the numbers a lot. Uh.
Speaker 1: But it's if you do what's unclear if they mean anything.
Speaker 1: You can also bypass it entirely by arguing that only
Speaker 1: works in the level of the entire world economy. Blah blah,
Speaker 1: blah blah blah. I don't care. If you do care
Speaker 1: about this, don't yell at me. Go read chapter six
Speaker 1: of Bickler and Needson's Capitalist power Palmatics. Theory is critique
Speaker 1: Fred Moseley's money in totality and Killman and mcglare is
Speaker 1: a temporal, single system interpretation of Marks's theory of value.
Speaker 1: Marks's value theory, and then Google Ducktails go big genuine
Speaker 1: and then all of that, all of your notes on
Speaker 1: both the texts and the duck tails send all that
Speaker 1: to I Wright okay on Twitter, um, and they to
Speaker 1: please you. You will probably come out of like you
Speaker 1: will come out of the duck Hill stuff like more
Speaker 1: saying than you will doing the Marxism stuff. So yeah,
Speaker 1: but I've I've now covered my basis. H this is
Speaker 1: this is this is orthodox Marxism, which is the stuff
Speaker 1: we've been talking about is based on another There's another
Speaker 1: assumption here that's important kind of technically, which is that,
Speaker 1: like so orthodox Marks assumed that, like, so, you have
Speaker 1: a bunch of sectors of the economy, right, there are
Speaker 1: people who like make different stuff, and the assumption to
Speaker 1: do who make hospital gurneys, people who do more important
Speaker 1: work like make podcasts. Yeah, yeah, and and everything in between.
Speaker 1: And the assumption is that, Okay, so you have a
Speaker 1: person who makes like podcasts, right, and then and the
Speaker 1: other people who make hospital structors figured out that making
Speaker 1: podcast is more profitable than making hospital stretchers, so they
Speaker 1: start moving all their capital into making podcasts. But then
Speaker 1: because there's too many podcasts, the rate of profit goes down,
Speaker 1: and eventually, like eventually the rate of profit across also
Speaker 1: actors is supposed to equalize. Yes, yeah, so and and
Speaker 1: this means that, like in the combination of this and
Speaker 1: competition means that prices is supposed to tend towards value
Speaker 1: or like the how much something cost in money is
Speaker 1: supposed to tend towards the labor time socially necessary to
Speaker 1: produce a commodity in a given place. Um, this is
Speaker 1: like the basic thesis of like what you call orthodox
Speaker 1: Marxist orthodox Marxist political economy would probably or Marksian political economy,
Speaker 1: whatever the funk you want to call it. Um. Now,
Speaker 1: in in starting in about the nine in twenties, there
Speaker 1: was a new Marxism and this is called Neo Marxism.
Speaker 1: Neo Marxism is basic Like I heard about that from
Speaker 1: Dr Jordan B. Peters. Yea, yeah, yeah right now. Now
Speaker 1: now we're gonna get the inside scoop on neo Marxism.
Speaker 1: So Neo Marxism their basic thesis is like what if
Speaker 1: profit rates don't equalize across like betwetween different parts of
Speaker 1: the economy that make things, and you know, and because
Speaker 1: they don't do what what if what if you don't
Speaker 1: get competition because instead of people being able to just
Speaker 1: freely move capital between like sectors, what if you have monopolies?
Speaker 1: And if you have monopolies, instead of sort of price
Speaker 1: being like a price is just value blah blah blah
Speaker 1: bla because someone can keep moving their money around, price
Speaker 1: is now a price. Price is now derived from the
Speaker 1: power of a corporation because if you know, if if
Speaker 1: if you if you're a powerful enough corporation to like
Speaker 1: have a monopoly and stop anyone else in producing the
Speaker 1: thing that you do. Now you can now you can
Speaker 1: charge what are called markups. And this is where Michael
Speaker 1: Collecky like enters from stage left. Um Collecki like he
Speaker 1: probably should have been the father father of like modern
Speaker 1: macroeconomics in the sense that like he invents a bunch
Speaker 1: of the ship that like Caynes does before Kanes did.
Speaker 1: But the problem is that he's writting a lot of
Speaker 1: this in Polish, and so the sort of like anglophone
Speaker 1: like economists are not reading it because he's in Poland
Speaker 1: and he's a Marxist and he's writing in polo circles.
Speaker 1: But he invents a bunch of the stuff that like
Speaker 1: canes and fences slightly earlier. And she starts like looking
Speaker 1: at like monopoly in oligarchy theory, and he starts trying
Speaker 1: to apply it to Marxism, and it's what you know,
Speaker 1: his inclusion is that monopolies are powerful enough that they
Speaker 1: can charge these markups, which is just like additional price
Speaker 1: increase over like what the like value determined price is
Speaker 1: supposed to be, because they can provide anyone else from
Speaker 1: selling a thing. And then you know, one what what
Speaker 1: once you have a monopoly in the market, you can
Speaker 1: force people to just like fucking suck it up and
Speaker 1: pay it because they can't get it from anywhere else.
Speaker 1: And this is actually this is like pretty similar in
Speaker 1: some ways to like a bourgeois economic like theory of
Speaker 1: how the stuff works, which is they're like, okay, yeah,
Speaker 1: in bourgeois economics, like monopolies can increase the price over
Speaker 1: We're they're supposed to be in a perfectly competitive market
Speaker 1: because they have power. Blah blah blah blah, blah. But
Speaker 1: there's something very different in coluctis work that is not
Speaker 1: in the normal bourgeois stuff, which is that what what
Speaker 1: he argues is that trade unions. Okay, so you have
Speaker 1: a trade union, right it they represented the workers at
Speaker 1: work at a company. And these that these trade unions
Speaker 1: are fighting over the over the product of the markup,
Speaker 1: and this keeps the size of markups and these sort
Speaker 1: of like these price increases that monopolies are doing down
Speaker 1: because the larger the markup these companies apply, the more
Speaker 1: incentive there are there is for unions to sort of
Speaker 1: like fight for pay increases, right because okay, well, the
Speaker 1: more expective the goods are, the more money they're like
Speaker 1: very clearly is on hand. And so the larger the
Speaker 1: demands you get from organized labor. And this is the
Speaker 1: insight that who killed the Phillips curve. The paper I
Speaker 1: was talking about jumps on that unions fight over markups
Speaker 1: and thus that the strength of unions is part of
Speaker 1: what helps determine inflation. And they point out that you know,
Speaker 1: unions want lower prices and for for goods, and the
Speaker 1: reason they want lower prices for goods is that the
Speaker 1: higher the price is of something, right, the less people
Speaker 1: buy of it, and the less people like buy of
Speaker 1: the thing, the less has to be produced, and that
Speaker 1: means that there's less people being employed. And so if
Speaker 1: you're a union and you want like the most number
Speaker 1: of people being employed as you can, and so that
Speaker 1: means that means that you want you want prices to
Speaker 1: be low, because yeah, that because because lower prices means
Speaker 1: more of the more of the good being produced, and
Speaker 1: more the good being produced means more jobs. And this
Speaker 1: is where we get to sort of the fundamental assumption
Speaker 1: behind the regular Philip scrip. And this is also true
Speaker 1: for this sort of like new like pseudo neo Marxist one. Right, Um,
Speaker 1: their assumption is that inflation is driven by rising wages.
Speaker 1: And you know, even though the unions are trying to
Speaker 1: sort of like reduce the markup and like and reduce
Speaker 1: markups reduced prices to increase the number of workers, firms
Speaker 1: are trying to increase prices so they can make back
Speaker 1: the money they're paying out in widges. Now when when
Speaker 1: unemployment is like high, this doesn't matter because wages still
Speaker 1: don't rise very fast because there's you know, there's this
Speaker 1: gnormous pool of people who are incredibly desert for jobs,
Speaker 1: and you can pay them sort of like nothing, and
Speaker 1: they'll they'll come work for you, because the alternative is
Speaker 1: you know, starving or getting evicted. But when when unemployment
Speaker 1: is low, the bargaining power of workers increases, and that's
Speaker 1: that's that's that's where the class war starts. Yeah, I
Speaker 1: mean this, You see this in ninety one with the
Speaker 1: screen Cartoonists strike that Scrooge McDuck brutally cracked down on
Speaker 1: um and eventually had to seed seed ground to the guild.
Speaker 1: But Scrooge, Scrooge McDuck was was brutal during during this
Speaker 1: time period post the thirties rise of unions. That's right, Garrison,
Speaker 1: and that's a big part of why Huey, Dewey and
Speaker 1: Louie had to track him down in his money room
Speaker 1: and stick a bicycle pump into his mouth while he
Speaker 1: was sleeping and begin to inflate him largely while touching
Speaker 1: themselves criticals Louie, my boy. So as as as as
Speaker 1: with I don't, I can't. I don't even know how
Speaker 1: to transition that I can't do it, but nobody does.
Speaker 1: I mean, really, the main thing is that the concentration
Speaker 1: of wealth in the hands of a small number of
Speaker 1: individuals will inevitably lead to inflation, which is true. And
Speaker 1: and this is one of the things that um that
Speaker 1: that that the economists are sort of talking about here,
Speaker 1: which is that like, okay, so once once you get
Speaker 1: an actual sort of once you once you get like
Speaker 1: a real class work going on right where you're you're
Speaker 1: you're getting in a class work to the extent that
Speaker 1: like the bargaining power of workers into bargaining power of
Speaker 1: of like capitalist verbs are essentially like very close to
Speaker 1: being equal. Um, you get inflation. Now, what's interesting about
Speaker 1: this is that when you have strong unions, like when
Speaker 1: you have strong unions, you get high rates of inflation
Speaker 1: during periods of sort of inflation shocks, right, because the
Speaker 1: unions are sort of like propping up wages in this theory.
Speaker 1: But and this is the interesting part, right, you get
Speaker 1: way lower rates of unemployment. And so it's okay, it's
Speaker 1: to step back for a second. So what's happening here is, right,
Speaker 1: if you have if you have strong unions and there's
Speaker 1: something else in the supply chain that increases costs, say
Speaker 1: to to to pick a copletely random example that never happened. Uh, say,
Speaker 1: for example, you're in the nineteen seventies and the price
Speaker 1: of oil is quadrupled in one year, and that increases
Speaker 1: the price of everything. Now when when when you have
Speaker 1: a strong but this never happened, don't google the oil shocks. Actually,
Speaker 1: literally don't google the oil shocks because almost everything written
Speaker 1: online about the oil shocks is a lie. I yeah,
Speaker 1: I think I've talked about that before. On the other
Speaker 1: pois never sood but yeah, it's it's all lie. But
Speaker 1: but basically, like one of the what you know, okay,
Speaker 1: what what what happens here is if you if you're
Speaker 1: strong unions, you get a bunch of inflation, but people
Speaker 1: don't get fired. And when when corporations are strong and
Speaker 1: you don't have unions, you know, you get these shocks
Speaker 1: and the inflation rate is much lower, but everyone gets fired.
Speaker 1: You unemployment rate goes up to like ten percent. Uh.
Speaker 1: It's you know, it's an absolute disaster. So that's that's
Speaker 1: one thing to note about about the way that sort
Speaker 1: of the Philips curve, the sort of Marxian Philips curve,
Speaker 1: like analyze the situation, right, But there's another consequence here
Speaker 1: which comes back to like what inflation is under a
Speaker 1: Phillips curve, Right, Inflation en Phillips curve is literally just
Speaker 1: wage increases. Right, So when when union power is weak,
Speaker 1: inflation stuff. But like, what does this actually mean? What
Speaker 1: it means is that wages aren't growing, sure, aren't. Yeah,
Speaker 1: And and this brings us back to like the sort
Speaker 1: of weirdness we saw in the early part of the episode,
Speaker 1: right right after two thousand eight, right where there should
Speaker 1: have been deflation because the unemployment rate was really high
Speaker 1: and also like junior recovery period were uninflation rate is,
Speaker 1: unemployment rate is super low. But and there should have
Speaker 1: been inflation, but there wasn't. And the answer is why
Speaker 1: why wasn't there inflation? It's well, okay, because no one
Speaker 1: had a union and so everyone's wages just stayed the
Speaker 1: same the whole time. I have another explanation for this.
Speaker 1: And when I previously when I previously said the Ducktails
Speaker 1: game came out into US to night, I was actually incorrect.
Speaker 1: US Night was when Nintendo Power listed the Ducktails game
Speaker 1: as the thirteenth best Nintendo Entertainment System game. Um there was.
Speaker 1: It was voted that into US a night. Now, it's
Speaker 1: important that thirty it's a very unlucky number. So by
Speaker 1: voting the duck Tails game best game from the NS
Speaker 1: into thousan eight, and they could have basically caused a
Speaker 1: psychic rift in the fabric of the universe, creating the
Speaker 1: financial crash. That's fascinating, Garrison, because I was thirteen in
Speaker 1: two thousand one when I came across that angel Fire
Speaker 1: website with home drawn Ducktails inflation pornography. Wait, so this
Speaker 1: CAUs I think in a lot of ways. Yeah, yeah,
Speaker 1: that's all connected. You know who else may have been
Speaker 1: a contributing factor to nine eleven? The products and services
Speaker 1: that support this podcast? I think that's right, that's right.
Speaker 1: We do not accept a sponsor unless it gets the
Speaker 1: explicit sign off of the King of Saudi Arabia. Um who,
Speaker 1: if you'll remember, did nine eleven? All right, Yeah, I'm
Speaker 1: not getting and I am not getting paid off to
Speaker 1: properly tradition this, so I'm not going to Uh So
Speaker 1: it turns out that yeah, so the reason there hasn't
Speaker 1: been inflation is that there's no unions. Because we don't
Speaker 1: have unions. Are wages all suck? And uh? This means
Speaker 1: that you know, wages, wages are stagnant low, and it
Speaker 1: means that they're not a drive. The unions aren't a
Speaker 1: driver of inflation. And also low wages are driver inflation
Speaker 1: because they you know, like unions aren't around to increase wages. Now, Meanwhile,
Speaker 1: the other thing that this suggests is that monetary policy
Speaker 1: and they okay, I think they're they're in exact analysis
Speaker 1: was like I think like eighty four percent of like
Speaker 1: inflation shocks can be explained by looking at like union density, um.
Speaker 1: But this also means it means what like monetary policy,
Speaker 1: like how much money there is like in the economy
Speaker 1: has like basically no role inflation whatsoever. And and this
Speaker 1: is you know, okay, so like like this has all
Speaker 1: been sort of one perspective from some economist of the
Speaker 1: Federal Reserve, and we can ask the question like why
Speaker 1: does this matter? Right, like why why why? Why does
Speaker 1: like sort of one like group of people on the
Speaker 1: Fed like their response this matters, And partly it matters
Speaker 1: because it's again extremely funny to watch the Federal Reserve
Speaker 1: turning to neo Marxists too, like try to explain why
Speaker 1: inflation happens. But it also matters because theories of inflation
Speaker 1: dictate inflation policy. Um. Jerome Powell, who's the chairman the
Speaker 1: Federal Reserve, has had a press conference on May fourth,
Speaker 1: and it's too long to play the whole thing, but
Speaker 1: he has the speech, and he lays out a few
Speaker 1: things that are interesting. So he talks about a bunch
Speaker 1: of stuff that's causing inflation, rights, production bottlenecks, increasing crude
Speaker 1: oil prices, concreasing commodity prices from like Russia's invasion of Ukraine.
Speaker 1: Like he's lockdowns and shine oother keeping factory like clothes,
Speaker 1: and like, yeah, okay, those are all like reasonable things
Speaker 1: that cause inflation. But then when you get to like
Speaker 1: what the Fed is actually going to do, he starts
Speaker 1: talking about how the job market is too good for
Speaker 1: workers right now and unemployment is too low and that's
Speaker 1: what driving wages up. So he's planning he's going to
Speaker 1: tinker around with monetary policy to reduce wages and decrease
Speaker 1: the demand for jobs. And this brings us back to
Speaker 1: two things. The first part is just the class war
Speaker 1: part of inflation. Right, prices are rising right now because
Speaker 1: someone inside like prices are rising right now, and someone
Speaker 1: inside if you want them to not to like cease
Speaker 1: to continue rising somewhat some part of like the company
Speaker 1: is going to have to take a hit to like
Speaker 1: the their percentage of like the sort of the markup, right,
Speaker 1: like their their percentage of like the price increase of
Speaker 1: the corporations do above like cost and okay, so someone
Speaker 1: has to do this, And the Federal Reserve like absolutely
Speaker 1: wants to make sure that the person paying for that
Speaker 1: is you, the worker. And the second part is something
Speaker 1: you might have picked up on if you're paying close attention.
Speaker 1: And this has been something that's been true of of
Speaker 1: both like the FED chairman and the FED economists do
Speaker 1: this too, which is they do this wh they talk
Speaker 1: about inflation. They do this kind of two steps. Right,
Speaker 1: They talk about a shock or something that causes prices
Speaker 1: to increase, like you know, a bunch of Ukrainian wheat
Speaker 1: like suddenly being on harvest will because the Russian army
Speaker 1: is squatting on it, or like Chinese factory shutting down
Speaker 1: just an amount of weed or price electronics or sorry
Speaker 1: reduces the amount of wheach or the amount of electronics
Speaker 1: being produced that drives out prices. Right, they talk about
Speaker 1: like there's an inflationary shock, and then they start talking
Speaker 1: and instead of talking about that anymore, they start talking
Speaker 1: about unemployment levels and the job market and monetary policy
Speaker 1: being what drives inflation. And I think this is this
Speaker 1: is a very important piece of ideology because if you
Speaker 1: look at what's going on here, right if if you know,
Speaker 1: if you go back to the seventies, it's not like
Speaker 1: inflation in the seventies is not the Union's fault, like
Speaker 1: you know, the the the in the inflation in the
Speaker 1: seventies was like in large part the original price increases
Speaker 1: because the price of oil country country pulled in one year.
Speaker 1: But you know, but the Fed instead focuses on wage
Speaker 1: increases is what drives inflation, even even if they're sort
Speaker 1: of like using like Marxists to do it. And what
Speaker 1: they're doing here is shifting the focus from the actual
Speaker 1: shock that is like the thing, the immediate thing that
Speaker 1: is increasing prices, and they're shifting the focus from the
Speaker 1: shock to the people who are reacting to it. And
Speaker 1: from there the question stops being about like dealing with
Speaker 1: the shock itself and starts being about who is going
Speaker 1: to pay for these price increases? And in the nineteen eighties,
Speaker 1: like Reagan's Reagan solutions, this is well, okay, she's just
Speaker 1: gonna make organized labor pay for it, and so she
Speaker 1: just annihilates the annihilist the unions. He uses the state
Speaker 1: to do it, just crushes the unions completely. And price increases,
Speaker 1: you know, prices stop increasing, right, And they stop increasing
Speaker 1: because the production costs of all of these goods like
Speaker 1: decreased because workers are no longer getting paid and they
Speaker 1: lose all their benefits. But this is the thing they
Speaker 1: never dealt with the actual source of the problem, right,
Speaker 1: Oil prices are still really high to this day, and
Speaker 1: we've never transitioned off oil. And so to look at
Speaker 1: sort of that problem, I want to briefly look at
Speaker 1: another theory of inflation, which is one presented by Steve Mann,
Speaker 1: who I think I've actually had on the show before.
Speaker 1: He's one of the people at Strange Matters, and he
Speaker 1: wrote he wrote this article called Notes towards the Theory
Speaker 1: of Inflation, which is based on the work of a
Speaker 1: heterodox economist named Frederick Lee, who is he's a cool
Speaker 1: guy and all of his stuff is like completely out
Speaker 1: there from the compens from decom perspective, but it it
Speaker 1: makes more than most regularly kind of stuff. So the
Speaker 1: sort of like founding observation of like that like projectally
Speaker 1: is basing his stuff on. Is that like, okay, prices
Speaker 1: are not set by like an abstract market. Right, the
Speaker 1: price of something in a grocery store is set by
Speaker 1: a guy like that there there there was a specific
Speaker 1: guy or they're like several specific guys whose job it
Speaker 1: is to set the prices for the firm. Um. This
Speaker 1: this this theory of like what it's not even a theory,
Speaker 1: like the fact that this is how prices are formed
Speaker 1: by just a guy who sits there with a notebook
Speaker 1: or like a computer. Is this is what the price
Speaker 1: is going to be. This is called administered prices. And
Speaker 1: Lee like very confestently argues that like this is how
Speaker 1: firm This is how both large and small firms actually
Speaker 1: set their prices. Right, a guy calculates his expenses, he
Speaker 1: adds a mark up, and he sets the price. Now,
Speaker 1: Steve Man argues that these prices don't generally tend to
Speaker 1: increase naturally because the price setters don't generally want to
Speaker 1: just increase the price randomly. Because if you if you
Speaker 1: increase the price randomly you will pass off your customers.
Speaker 1: And the customers you know, okay, they'll they'll tolerate like
Speaker 1: some small increases. But if you raise the price enough,
Speaker 1: they lose your goodwill towards your brand and they'll like
Speaker 1: they'll go off and try to find another brand. And
Speaker 1: this is disastrous because even if you reduce the prices
Speaker 1: back down again, like the good will is lost. And
Speaker 1: that's sort of like you know, the sort of like
Speaker 1: happy association that like you have in your brain between
Speaker 1: like I don't know, like Nestly chocolate or something, or
Speaker 1: like whatever brand of things you're buying, like you get
Speaker 1: piste off with them because the price is now like
Speaker 1: way higher, so you know, you don't go back to
Speaker 1: the same like grocery store because that they've increased their prices.
Speaker 1: Now obviously this is like there's like this subject constraints, right, Like,
Speaker 1: if if you need insulin, and the monopoly that controls
Speaker 1: insulin production, just jack's the price, You're screwed, right, there's
Speaker 1: no sort of like there's no other place you can
Speaker 1: get insulin unless you're gonna try to make it so
Speaker 1: your your your solutions are you either try to ration
Speaker 1: it and you die or you pay for the price
Speaker 1: increases and this this is bad and it does happen.
Speaker 1: But most goods aren't like this, and so price increases,
Speaker 1: when they happen, tend to be small and fairly infrequent,
Speaker 1: unless unless the person that The reason this doesn't this
Speaker 1: wouldn't happen is if the person setting the price has
Speaker 1: no choice. And the main reason that if you're a
Speaker 1: person setting a price, that you would have no choice
Speaker 1: but to increase like the price that that that that
Speaker 1: you're setting. The main reason you would do this because
Speaker 1: something happened to your supply chain. UM, I don't I
Speaker 1: don't know if you'll see that. There was a TikTok
Speaker 1: going around from a farmer in Iowa who was talking
Speaker 1: about like why price white food prices are going to
Speaker 1: keep increasing. The woman, honestly, I bless her heart, honestly
Speaker 1: thinks that food prices are not going to go up.
Speaker 1: She thinks that this is the highest they're going to go.
Speaker 1: I tried to explain to her that that was not
Speaker 1: the case, that they're absolutely going to go up even more. Um,
Speaker 1: and I told her there are things that like we
Speaker 1: have to buy, there's something we had to buy that
Speaker 1: two years ago, cost is twenty four dollars. Last year
Speaker 1: was about forty six. This year it is costing US
Speaker 1: nineties six dollars. Okay, local farmer fifty had a cattle.
Speaker 1: It's costing him eight thousand dollars a month to feed them.
Speaker 1: Please understand, food prices are going to go up. Yeah,
Speaker 1: and so and so you can see here what's happening.
Speaker 1: It like at some point down the supply chain, prices
Speaker 1: are increasing either because of like climate change, because of
Speaker 1: the word Ukraine, because of COVID, because of like any
Speaker 1: thousands sort of other factors. And eventually the like the
Speaker 1: farmers who are setting the prices, right, they have to
Speaker 1: increase their prices because they don't have they don't have
Speaker 1: a choice, right, because because the each person further back
Speaker 1: in the suppyline as a charity, right, like they have
Speaker 1: to be able to pay a bunch of ship build. Yeah,
Speaker 1: and and this this sort you know that this is
Speaker 1: the Steve calls it like that. He calls it the
Speaker 1: supply chain theory of inflation. Right, and you know in
Speaker 1: this model, like this is what's causing inflation. Right, each
Speaker 1: person successively down the line has to eat, has to
Speaker 1: increase their mark up because they have to cover their
Speaker 1: they have to cover the new, newly increased production costs.
Speaker 1: And this is important because unlike most models of inflation,
Speaker 1: inflation isn't being caused by like some kind of like
Speaker 1: giant macroeconomic thing, like it's not being caused by like
Speaker 1: unemployment or like monetary policy, but it's being caused by
Speaker 1: very very specific microreconomic forces that you know, there are
Speaker 1: literally specific people who as a reaction to a specific
Speaker 1: thing happening that makes production harder or increasing their prices.
Speaker 1: And this is a very different sort of you know
Speaker 1: that this is a very very different theory of inflation
Speaker 1: than like any of the like seventeen mainstream ones, all
Speaker 1: of which are bad in various ways. And yeah, and
Speaker 1: there's there's one other thing I want to mention though
Speaker 1: that kind of isn't talked about in this model, that
Speaker 1: is absolutely happening right now, and that's um And then
Speaker 1: something that is really one of the drivers of inflation,
Speaker 1: which is that corporations are raising prices because they think
Speaker 1: they can get away with it, and they're just pocketing
Speaker 1: the costs. And and this isn't so this isn't like
Speaker 1: a sort of speculative thing. Uh companies, when you ask
Speaker 1: them about it, are very very open about it. Here
Speaker 1: here's from a Business Insider article. What we are very
Speaker 1: good at is pricing. Colgate Palm of Oil CEO Noah
Speaker 1: Wallace said, whether it's foreign exchange inflation or raw unpacking
Speaker 1: material inflation, we have found ways over time to cover
Speaker 1: that in our margin line. We've been we've been very
Speaker 1: comfortable with our ability to pass on the increases that
Speaker 1: we've seen at this point, said uh Croker CFO Gary
Speaker 1: Miller Chip in October. And we would expect that to
Speaker 1: continue to be the case. And here here's from here's
Speaker 1: from the Wall Street Journal, where more people talk about
Speaker 1: doing this. We have not seen any material reaction from consumers,
Speaker 1: Procter and Gamble finance chief Andre Sholton said last week,
Speaker 1: referring to a string of price increases that went into
Speaker 1: effect in September. So that makes us feel good about
Speaker 1: our relative position. Now, those two articles, like, just those
Speaker 1: two articles alone talk about prices raising, Like talk about
Speaker 1: companies that are just raising prices because they know consumers
Speaker 1: will pay for it, because I think there's inflation happening,
Speaker 1: and those companies just from those two articles alone include
Speaker 1: Procter and Gamble, nest LEA, Verizon, Unilever, Colgate, Palm of Oil,
Speaker 1: Coca Cola, Pepsi, Gillette, Chipotle, A, T and T, Verizon, Kimberly,
Speaker 1: Clark Corp, Clarox, Reynolds, Kroeger's, and Albertson and like that.
Speaker 1: That's that's just like the corporations in the article that
Speaker 1: are like specifically named as talking about having done this right.
Speaker 1: And they can get away with this because normally normally
Speaker 1: write price increases to piss people off, they go to
Speaker 1: go free for brands. But if if prices across the
Speaker 1: board are already increasing, you can you can just like
Speaker 1: do basically like a price gouge increase, and you can
Speaker 1: do and you can increase your markup and it doesn't
Speaker 1: it doesn't affect your goodwill because people just assume that
Speaker 1: inflation is already happening, and that inflation happens sort of naturally.
Speaker 1: Is either because the wage like wages are too high,
Speaker 1: there's too much money in circulation, so oh, there's just
Speaker 1: like inflation happening. Is this like abstract thing instead of
Speaker 1: what is actually happening, which there are very specific like
Speaker 1: they're individual people with with names and addresses who specifically
Speaker 1: increase the price in order to screw you, and that
Speaker 1: that that's that's what's actually at stake here, and having
Speaker 1: explanation for why inflation happens, it tells you who to
Speaker 1: blame for it. Like right now, Larry Summers, who was
Speaker 1: the former Treasury secretary who was responsible for arguably responsible
Speaker 1: for two thousand directly responsible for two thousand and eight,
Speaker 1: one of people who completely annihilated the entire Russian economy
Speaker 1: in the nineties. Uh, he is has apparently been on
Speaker 1: the phone with Joe Biden, and he is going around
Speaker 1: saying that in order to solve inflation, we have to
Speaker 1: cut wages and rage the unemployment rate to five percent,
Speaker 1: like for five years, like on average five percent for
Speaker 1: five years. And so this means either you have five
Speaker 1: percent of five percent, five years of five percent inflation,
Speaker 1: two years of inflation at seven point five percent, or
Speaker 1: like one year of teen percent unemployment. And again unemployment
Speaker 1: right now is it like three percent? So she's talking
Speaker 1: about millions, potentially tens of millions of people losing their
Speaker 1: jobs in in order to in order to solve inflation.
Speaker 1: Because Summers again, Summers is going back on the sort
Speaker 1: of Phillips model ship, right, where inflation is caused by
Speaker 1: you know, it doesn't even matter what's actually causing the inflation,
Speaker 1: which is a bunch of a combination of price gouging
Speaker 1: and like, uh, supply chage distructions. Right, She's going, Okay,
Speaker 1: who His theory isn't about what is causing inflation. His
Speaker 1: theory is about who's way to pay for it. And
Speaker 1: his solution is, fuck you. You are going to pay
Speaker 1: for it. You're going to pay for both the price increases,
Speaker 1: which the prices won't fucking come back down. That's the
Speaker 1: other part of this, right, Once once you get inflation,
Speaker 1: and once the prices rise, they're sticky, they don't fucking fall.
Speaker 1: And what he's saying is, yeah, fuck you, you you are
Speaker 1: going to pay for it. You're going to continue to
Speaker 1: pay these prices. You're also going to pay for it
Speaker 1: by reducing your wages. You're going to pay for it
Speaker 1: by getting fired. And you know, and this is this
Speaker 1: is the sort of the choice that we have, right,
Speaker 1: It's either we let the ruling class tell exactly the
Speaker 1: same stories about why inflation happens. They've been telling fifty
Speaker 1: years that they know we're wrong, that they that they
Speaker 1: know are so wrong they're desperate enough to turn to
Speaker 1: fucking Marxism to try to find explanations for it. Or
Speaker 1: we find it, we find a new like explanation of
Speaker 1: why fucking inflation happens, and we go back, we take
Speaker 1: the stuff that they've stolen from us, and then we
Speaker 1: appropriate the bastards so they don't do it again. And
Speaker 1: that is that that that that is what I have
Speaker 1: to say about inflation. Yeah, I mean again, what what
Speaker 1: we need to do is if we organize as a people,
Speaker 1: and as a people come the vacuum tube that we
Speaker 1: need to shove down the esophagus of Summers and other
Speaker 1: members of the ruling class in order to inflate their
Speaker 1: organs so that their asshole widens and we can collectively
Speaker 1: fuck them until they deflate. Is that more or less accurate? Chris?
Speaker 1: Would you say? Economically? Sure? I mean, you know this
Speaker 1: is honestly okay, I would say, like, this is the
Speaker 1: thing that, this is the thing about having an explation
Speaker 1: for wine inflation happens. Right, It doesn't matter if it's
Speaker 1: true or not. You can as long as long as
Speaker 1: you have a compelling enough explanation for inflation to cause
Speaker 1: people to do something you can you can, I mean,
Speaker 1: and this this is one of the things. For example,
Speaker 1: like this is one of the things that caused Tenement
Speaker 1: to happen, is that there was skywalketing inflation and the
Speaker 1: like workers had an explanation of inflation. It wasn't right,
Speaker 1: like yeah, I mean that their explation for inflation had
Speaker 1: to do with like the like China was taking in
Speaker 1: a bunch of loans and the CCP was spending all
Speaker 1: their money on warts cars and it's like it's it's
Speaker 1: kind of marginal whether it was like true or not,
Speaker 1: but it doesn't matter, right, infla inflation could be caused
Speaker 1: by the fact that we haven't fucking inflated right on
Speaker 1: that point. And this is this is this is true.
Speaker 1: You can look this up online. Um. So, the original
Speaker 1: Ducktails game from nine was remastered in two thousand thirteen,
Speaker 1: and it was real. It was released on August thirteen,
Speaker 1: two thousand thirteen, the remaster of the Duct Tails game
Speaker 1: thirteen thirteen, both on Lucky Numbers. I think that could
Speaker 1: have just just as much to do with our current
Speaker 1: economic problem around inflation as basically anything else. Chris has
Speaker 1: said here um because August two thousand thirteen Ducktails getting
Speaker 1: released Scrooge McDuck main character. That is too much to
Speaker 1: be a coincidence. Yeah, we are through the looking glass.
Speaker 1: I can see the Nords like there's there's there's no
Speaker 1: getting away from this one. Look, all you have to
Speaker 1: do is you just gotta go. You gotta show up
Speaker 1: to the rule of the fucking money is and you've
Speaker 1: gotta take it from them. Do you guys show up
Speaker 1: kind of show up to the factories and inflate your
Speaker 1: bosses and you will inflation will come down. Yeah, would
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