A Sexy Guide Explaining How Inflation Could Change Everything
Photo by Christopher Campbell on Unsplash
Hey there. It's been a long, long day. You are ready to wind down, but you can't because everyone is talking about inflation. "US inflation hits the highest level in 40 years in January…," goes a titillating article for The Guardian. A suggestive New York Times poll claims that almost 9 in 10 adults are concerned about inflation, something that allegedly cuts across party lines. People are worried about the rising cost of goods and services. It caused quite a stir, and now it's preventing you from getting off.
We've all been there.
That's where I come in with this sexy breakdown, where I go deep with a penetrating analysis of all the essentials you need to get that sweet release. Although some of this concern over inflation is merely a wedge issue being pushed by naughty Republicans to demonize the Biden administration (and for even naughtier corporations to raise prices on consumers), inflation is indeed a very valid concern. And not just for sweaty consumers like you but the powerful as well. If this trend continues, it could be a possible breaking point for over forty years of economic thought.
And what could be hotter than that?
Neoliberalism is killing the vibe
First things first, let's define some terms. I know definitions, your favorite thing to get off to.
Right now, we are ruled by the economic theory of "neoliberalism," a philosophy best described as the desire to let the capitalistic marketplace dictate all human interactions. The influence of neoliberalism is pretty dominant in our society, which is why so many political groups may seem so similar, even if they differ on pesky cultural issues. Democrats and Republicans may intimately disagree over abortion and trans rights, but they do agree that the government's primary function is to encourage and maintain private property, markets, and trade.
You liked that definition, didn't you? Well, don't worry, you dirty, dirty definition dumpster, more are coming.
Now, if you have been around the political watering hole for the past couple of decades, you'll have noticed a familiar story emerge from supporters of neoliberalism about "globalization" (i.e., businesses being able to operate on a global scale). It goes like this: the neoliberal policies of globalization (e.g., free trade, outsourcing, deregulation, spanking, not being allowed to pee, etc.) may hurt some workers in the short term, but it shouldn't matter in the long run if that translates to lower prices. As explained in a 2019 article in National Geographic:
“In general, globalization decreases the cost of manufacturing. This means that companies can offer goods at a lower price to consumers. The average cost of goods is a key aspect that contributes to increases in the standard of living. Consumers also have access to a wider variety of goods.”
See baby. I wasn't lying about those definitions. 😈
Proponents of globalization have usually overemphasized this alleged plus to counter irksome critics who point to all of our current economic systems' drawbacks. As long as Americans could buy cheap products, we were supposed to be contented, or at least that was the ultimate fantasy. Terminated workers could be retrained, new businesses would grow, everyone's standard of living would increase, and everyone's cup would runneth over (oh yeah).
From what we can tell, that never really happened. In the last forty years, wealth inequality has skyrocketed. We have all seen a spike in essential services such as housing and health care. In fact, over half of all bankruptcies in the US have resulted from medical issues. Unlike the last party I attended, that increased standard of living never trickled down. It was like the ultimate tease, except instead of consensual fun, we were all nonconsensually getting a raw deal.
And now, cheap goods and services (the one incentive America still had) are allegedly on the chopping block. Many Americas don't have enough to buy even the cheap crap that was supposed to make us satisfied and really hit that spot. We are an Empire built on bread and circus politics, and because of this latest round of inflation, more and more people cannot even get their bread or, more importantly, their premium, water-based lube.
You might be quick to argue that this claim is an over-exaggeration, that other countries have it worse, or that I use far too much lube, but I am not interested in whether this feeling is valid. All economic systems thus far have had inequities, where they starve huge swaths of their populations (see the Irish Potato Famine, the Great Depression, the Sex Toy Shortage of 1892, etc.). Maybe now is uniquely awful. Perhaps it's not. I don't have the expertise for that, and more to the point, I don't think it matters. What's more important is that people feel that it's different and want to try something new (oh, daddy).
Americans right now are increasingly coming to hate the current system. Faith in institutions such as Congress is low. Nearly 40% of Americans have a negative view of capitalism as an economic system, and that number is over half for Gen Z adults. Consequently, interest in alternatives, such as socialism, is high among the younger generations.
And this distrust opens the door, both front, and back, for a shift in economic policy. Something I can assert with confidence because it has happened before.
Economic systems are open
Sort of like consent in the kink community, emotional narratives are everything in economics. When I look at strains of economic thought, they do not emerge from a gaping black hole in the universe. Their dominance is almost always because they were campaigned for by thinkers and their supporters. Neoliberal scholars like Friedrich August von Hayek and Milton Friedman spent years laying the intellectual foundation for our current economic system. Their wealthy benefactors, partly hoping to reverse the regulations of the New Deal, set up think tanks and supported academic institutions to advance this worldview. They then backed political candidates such as President Ronald Reagan and Margaret Thatcher, that enshrined this ideology into law, which was the opposite of sexy.
Yet it takes more than just plowing money into an idea, no matter how good your technique is. The validity of your competitor has to be in question as well, and in the 70s, neoliberalism's predecessor, Keynesianism, had a significant legitimacy crisis that it did not survive.
Named after English economist and Chad, John Maynard Keynes, Keynesianism argued that an economy is driven by "aggregate demand" or the total spending of goods and services by private and public sectors. Keynes & company argued that an increase in demand leads to an increase in supply. Where neoliberalism is like the withholding sir who tries to encourage austerity and fiscal conservatism during downturns, Keynesianism is like the daddy who showers us with government programs when times are bad to increase employment and spending. A classic example of this is the New Deal, which used programs like the Public Works Administration (PWA) to hire workers for public works projects (see The Hoover Dam, the Reagan National Airport, and the Triboro Sex Swing).
So what happened to Keynesianism? Well, strap into your harness because we are headed for your second favorite thing, baby, a saucy recap.
A prudish neoliberal would argue that while this theory worked well during the post War period (1945–1968) when the United States was going through its Golden Age, it was not suited for the years that followed. The narrative goes that as the decades progressed, international competitors started to recover from the devastation of WWII and meet and, in some cases, surpass US manufacturing. This placed American exports at a disadvantage, though it's important to note that, from an employment perspective, this industry continued growing until 1979.
At the same time, more Americans transitioned to the service sector, where wages and benefits were lower on average. Coupled with an expanding social safety net and, more importantly, a costly imperialist war in Vietnam, inflation was on the rise, and the purchasing power of the average American was down. And with it, the American public's ability to buy essential goods like butt plugs.
This hot, hot powderkeg came to a head in the early and late 70s when a series of Oil Shocks (caused by an embargo from OPEC and the fallout of the Iranian revolution, respectively) drove oil prices to skyrocket. Much of US society was dependent on oil at the time, and so this rippled throughout the economy. This influx of slow economic growth, high unemployment, and high inflation became known as "stagflation" and was deemed a problem for Keynesianism.
Keynesianism posited an inverse relationship between inflation and unemployment (the supposed Phillip's Curve, named after hunk and Chad A. W. Phillips). If you had one, you weren't supposed to have the other. But under stagflation, this relationship was no longer responding as it should. Inflation was going up, and so to was unemployment. This situation created an opportunity for opponents to brand the policies of Keynesianism to be incidental to the success of the Post-War Period and to blame it for the stagflation that followed.
The rest, as they say, is history. We have been arguably suffering under the kink-shaming policy of neoliberalism ever since.
Now again, the validity of whether Keynesianism was indeed unable to deal with stagflation is irrelevant (a lot of people don't agree with the neoliberal narrative at all). Remember, the reality of a situation is rarely the reason why a worldview becomes adopted. It's certainly not why my tired ass accepts a booty call at 1 am. What is true is that people in power believed, or at the very least, could argue and convince others that Keynesianism was unable to handle (and possibly even caused) stagflation, which helped lead to the mainstream adoption of neoliberalism.
We see flashpoints used frequently to push for different economic theories. Keynesianism, for example, supplanted the laissez-faire, supply-side approach to economics that was challenged by the devastation of the Great Depression. While ending for many reasons, Mercantilism terminated partly due to a series of revolutions you may be familiar with (e.g., the American Revolution, the French Revolution, etc.). And, of course, Daddy Marx’s ass was kicked to the curb by dominatrix Margaret Thatcher.
For change to come, a moment also must arrive that allows dissidents to question the system's underlying logic. Material reality is essential, but how that reality is packaged, advertised, and deeply pushed onto people is what makes or breaks economic and political systems (give it to me, daddy). So much effort had to go right to make these new systems possible. People had to toil away for years on a set of ideas, and all of that is for naught if those who control things (or their opponents) do not feel that change is necessary.
And boy, oh boy, oh "don't stop now" boy, do people feel change is necessary now.
A quick (but not too quick) Conclusion
This truth is what makes the conversation around inflation so important. It might seem like inflation isn't just another bad thing in a world of rising seas and growing authoritarianism, but it's actually thee bad thing. The one objective our current economic system was supposed to do was to increase the average consumer's purchasing power. Since that is now in doubt, we could be entering a legitimacy crisis of the last 40 years of neoliberal economic policy.
Something as hot as it is existential.
People are not happy with the current order. If neoliberalism is unable to meet the challenges of the current moment, as I suspect it is not, then that means we might see the emergence of a new type of economic thought dominating our world.
What will that be? I have no idea. Like any good dom, I have my preferences, but a new system does not necessarily mean a better one. It's possible that wealth inequality could collide with climate change, leading to ecological exterminationism, where the rich let the poor of the world die out. Maybe the rise of China will cause an increase in the popularity of State Capitalism. Perhaps we will get that infamous “fully automated luxury space communism.”
The point of this article is not to tell you the future — no one can do that — but to reframe why this conversation about inflation is so important. It's more than just a talking point Republicans are using to win the midterms or a sexy guide to help you climax (by the way, I have not yet given you permission to orgasm). It's a potential legitimacy crisis and one that has been brewing in the background for decades.
Okay, you can now release.