The working classes needed to be put in their place
I can’t help but feel a sense of déjà vu at the current debate about global inflation. The similarities between today’s spiralling situation and the inflationary crisis of the Seventies are too striking to be ignored.
Nearly 50 years ago, the oil crisis of 1973 sent inflation skyrocketing across Western countries. It was a textbook case of imported inflation, which in a context of close-to-full employment and strong union bargaining power triggered self-reinforcing inflationary pressures, as companies raised prices to defend profit margins while workers in turn demanded wage increases. This price-wage (or wage-price) spiral was a response to the inflationary pressures coming from abroad — not their cause.
