In a recent article, renowned historian E.P. Thompson’s concept of the “moral economy” is revisited in the context of rising inflation and the current economic landscape in the United States. Thompson argued that 18th-century food riots in England were rooted in a belief that prices should be fair and not dictated solely by market forces. Today, Americans are feeling the pinch of inflation, with prices rising faster than wages in many cases.
Economists like Stefanie Stantcheva of Harvard University have sought to understand why Americans dislike inflation so much. Surveys conducted by Stantcheva reveal that most respondents feel inflation leads to a reduction in real incomes, making life less affordable and creating worries about being able to afford basic necessities. Many do not see a trade-off between inflation and unemployment, believing both will rise simultaneously. There is a general consensus that rising prices indicate a struggling economy, not a thriving one.
However, not all economists view inflation in the same negative light. Some argue that inflation, when accompanied by a strong labor market and rising wages, can be manageable and even beneficial. Inflation can be a natural consequence of a robust economy, where prices adjust in sync with each other. While inflation does present challenges, it can also signal growth and job opportunities.
Despite the economic complexities at play, many Americans feel that inflation is fundamentally unfair. They believe that price hikes widen the gap between the rich and poor and are driven by corporate greed. There is a sense that employers have the upper hand in wage-setting, further complicating the issue for workers. Despite evidence of a strong labor market and rising wages, many workers attribute their success to individual merit rather than broader economic factors.
In conclusion, understanding the public perception of inflation is crucial in shaping economic policies and fostering trust between policymakers and the public. As with 18th-century food riots, there is a deep-seated belief that prices should be just and that fairness should prevail in economic exchanges. While economists may see inflation as a natural part of a growing economy, addressing the concerns and frustrations of everyday Americans is key to maintaining stability and trust in the economic system.
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