Money Supply Doesn't Cause Inflation. The Profit System Does - Economic Update

Prof Wolff explains why inflation is not caused by increased money supply, but rather, the behavior of private, profit-seeking businesses. Don't be fooled by business bluffs.
"You want to know what causes inflation? The profit system. It's only a question of the employer deciding when is the right moment to jack those prices up." - Richard Wolff
This is a clip from S11 E45 of Economic Update: " Class Struggles in the US Today"
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[@riteshmalhotra5803]

This man seems to be living in a different universe where no laws of economics apply.

[@yokosucks]

This man is a Marxist. So, yes.

[@perkjames]

Here is a gentleman who has never run a company, dealt with a board, or faced competition. If you hold prices steady whilst your supply increases, your demand will drop as your competitors adjust their prices to increase volume, and take your share.

[@BrainInJar]

Oh, you're saying that market competition leads some people to lose and some people to win and the laws of economics under capitalism compel companies to raise prises for their own profit? Marx truly never considered this.

[@skully5473]

The increasing amount of mergers and concentration of capital. The ever increasing monopolies in the market system is the problem which stops the market behaving like it should and more like what Prof Wolff is describing. You're correct, but the concentration of capital inhibits this outcome. Look how the food industry is controlled by so few companies and how these companies own hundreds of brands. How their lobbyists and political donations prevent government intervention into their monopolies. The pure market may be perfect, but the market is far from pure.

[@julieandpaulbeard7900]

This man's economics degree should be rescinded.

[@gottfrei409]

what caused inflation in Venezuela?

[@TheFunkadelicFan]

Scarcity.

[@TC-eo5eb]

I just watched two other video's by Prof Wolff and he clearly stated the reason for inflation is directly related to an increase in the money supply. He claimed business owners take advantage of consumers increased supply of money in their hands by raising prices on products, thus increased inflation. In this video, Wolff clearly contradicts himself and states just the opposite. In this video, Wolff states the extra money floating around and being circulated has nothing to do with inflation. Jeeeesh, this guy can't remember from one video to the next what his theory is.

[@PoliticalEconomy101]

Learn MMT Dr Wolff!

[@Myndir]

Measured by Divisia aggregates (the logical way) money supply growth only became rapid in 2020. The period 2000-2019 was quiet except for a big dip in 2008-2010. M1 and the monetary base don't include a lot of money. M2 and M3 adds together apples and oranges as if they're the same thing.

[@siamcharm7904]

problem. in 2020 M1 increased by 37 percent, far, far more than any time in our history. even in this century average was only 4 percent.per year on average. our currency has been greatly devalued and at some point we will have to pay the piper. watch what happens when we have real full employment. more rigor please prof wolff.

[@brandonfoster8163]

Don’t buy things not essential also find alternatives and don’t work for companies not raising wages.

[@aylbdrmadison1051]

Also buy quality items that can be repaired when they do break. This throw away economy is beyond unsustainable.

[@wildoakwellness9332]

That would only make sense if there is no competition. In some industries people might collude in price fixing, but that requires very few big companies to have market dominance. If you have lots of smaller and medium sized businesses in a market, you will have a range of prices, often associated with quality or perceived quality, and buyers can choose who to buy from. Raising prices arbitrarily can destroy a business in a competitive market. Supply is also a HUGE issue right now, especially with oil, which as our main source of power for transport, affects all other goods and services. The FED has also pumped Trillions in stocks and bonds over the past 2 years, causing asset inflation, at a time when the market should have been falling, and as the investors get richer on free money, they can afford to pay more for goods and services, while most working people see their income able to buy less and less. It is not just as simple as the profit motive, and stating it that way is not useful, it is just divisive.

[@TheJohnnyCalifornia]

How much competition is there exactly in the markets? There are just a few dominant players and as you go back through the supply chain, you run into more near monopolies or monopsonies especially in food and essential goods. However, it is a good point. It would be interesting to see if inflation is more apparent in or at a higher rate where conglomerates have dominance over the markets and rising at a lower rate in where markets are more competitive. Certainly, it seems like many megacorporations are sitting on a great deal of cash holdings now so they aren't investing in more production which would seem sensible if prices are rising.

[@Anima-Necrosis]

Sounds like someone’s become good friends with Jonathan Nitzan and/or Shimshon Bichler. Glad to see the Capital as Power model getting some representation.

[@KingJarreth]

With all possible respect, I'm a little confused. While the video discusses all the money being printed, doesn't the Federal reserve also remove older bills from circulation?

[@arentube8123]

They are not literally talking about the printing of paper money. Most money is just numbers on a ledger representing balances in accounts, purely electronic these days. They can create money out of thin air through a number of ways such as loaning money to people.

[@larsvongraff5794]

This man never has had to meet a payroll. This is profoundly lacking on so many fronts.

[@ericallen7126]

You have clearly never taken a class outside of your business degree. Your business lens is profoundly lacking.

[@siamcharm7904]

yes price increases begin at the raw material stage which wolff seems not to know.

[@Lance_Thorpe_Esq.]

Thank You

[@anhedonic-voting]

Thank you🌎✊🌹🗽

[@blow420]

Prices are set by supply and demand. When the money supply increases it devalues the money and it makes goods cost "more". INFLATION IS A HIDDEN TAX!

[@LawlerC]

Well the theory is yes, there has been inflation from money printing. Inflation in stocks and inflation in real estate.

[@jb5music]

And the tariff wars too. This and the tariff wars.

[@georgeyao436]

It has everything to do with money creation.

[@5508Vanderdekken]

Lol. Right. 800 billion in stimulus checks. 60% went to debt and savings, so 320billion spread out over two years... Is causing record inflation. You and Milton solved the case!

[@NathansHVAC]

Banning drilling and pipelines raises gas prices. That is what they want.

[@sandal_thong8631]

The last video I watched was comparing a 2003 LEGO set of 1000 pieces that cost $100 (adjusted for inflation $140 or 40% in 17 years) to its 2020 version of 1200 pieces which costs $160. A curious thing not mentioned in that video is in 2006 due to reduced sales and profits, LEGO laid off workers in Denmark and Connecticut to move to Czech and Mexico, respectively. So, costs dropped, but prices still went up, seeming that inflation is their fault as this video suggests? Maybe. Another video I watched today was about Turkey which is experiencing hyperinflation this past year and depreciating currency over 6 years. The banking system is semi-independent in that the leader must nominate a guy, but then can fire him, like he did after he raised short term (1 week) interest rates from 17.5% to 24%. Then the fool he replaced him with dropped them to 8.25% before raising them to 10.25% and was sacked for raising them. And his next 3 were fired for also raising interest rates. So if you were a foreign investor, you wouldn't want to hold Turkish Lira except the day you need it for something like payroll, paying taxes, buying goods for export, or real estate.

[@sandal_thong8631]

@@fattyacid1901 Economics is math to support rich people's wealth.

[@mmore7285]

this is because of USD dominant currency. Petrol dollar and global currency. the printed money cleverly converted to debt and sold to the world.

[@hawkkim1974]

Thank you. We have been lied the whole time. We should stop lying to people, and more importantly to ourselves.

[@CesarGarcia-og8rz]

This guy speaks nothing but lies. If you're tired of lies, your watching the wrong videos.

[@sekogasiskren9406]

"They muddy the water, to make it seem deep" - Friedrich Nietzche

[@imaresurcher]

"they quote nietzche to make themselves seem intellectual" - me

[@sekogasiskren9406]

@@imaresurcher "if I was intellectual, I would make my own original quote and not use someone else's, but also not make a variation of someone else's quote" - me

[@imaresurcher]

@@sekogasiskren9406 lol aw dw im sure youre v intellectual buddy im just fckin with u

[@bluewater454]

What a great description of Marxism! Thanks for that quote, comrade. Cheers

[@sekogasiskren9406]

@@bluewater454 no problem, that was for you Capitalist proponents and propagandist, who keep inventing BS things and theories, in order to maintain centuries old backward system in modern times

[@michaelleen7122]

How does money printing or increasing the money supply effect the value of the curremcy?

[@earlsimmons8754]

the more money is printed, the less the money already in circulation will be worth (generally. Demand for your curency affects its value etc)

[@michaelleen7122]

@@earlsimmons8754 so that makes things cost more?

[@earlsimmons8754]

@@michaelleen7122 Based on what I said, technically yes because your money is worth a little less but as the video pointed out, no. The money printing encourages business owners to increase prices because of greed and nothing else.

[@michaelleen7122]

@@earlsimmons8754 It could be more complicated than the video stated and the cpi is only one rather gamed form of inflation as the example of money supply illustrates not to mention where that printed money goes and what is done with it, like buying stock and driving up value...inflation. Sure greed can drive inflation but everything effects everything else in addition to greed.

[@earlsimmons8754]

@@michaelleen7122 fair point. I was trying to be as brief as possible

[@ernestweber5207]

There is also the domino effect, so to speak. Currently, many issues effect the price of goods. Since demand is high and the supply-chain appears to be broken, (partly because of decades of neglect and lack of investment) that causes or allows for price inflation. In the supply chain, working downwards the prices to be factored in include the their suppliers, their supplier's suppliers, etc. Then, factoring in the rise in energy prices and other variables, that is one explanation for the kind of inflation we are seeing now. The game has changed recently due to supply chain problems. High demand and less supply do equal an opportunity for everyone, (from shippers to wholesale to retail) to increase prices. With capitalism, though, there is always profit on the way up and the way down for the most vested interests that comprise a small percentage of the population. That's baked in. We are looking at the vulture capitalism phase as we deteriorate economically where the bones are picked clean off of the masses. Then they grind the bones down to make bread, so to speak.

[@alexmarvin3093]

did you just re-explain the Professor's video with less details?

[@ernestweber5207]

@@alexmarvin3093 Basically, yes. I was explaining my overall understanding and including some relevant details that would support his conclusion.

[@superduperjew]

@@fattyacid1901 Yeah, he's lying. He has no reason to lie about this, but yeah, ok, he's lying. Or you have a bias which keeps your from exploring this. Also, you lied about his democracy at work efforts being only focused on the richest countries. So, yeah, you actually lied.

[@steveg9744]

WOW! THE WOLFFMAN comes out swing in’! 😤🤯. Well done sir!

[@ewalker1057]

Professor Wolff has the brilliant mind to make complicated so everyone can understand it.

[@Voxphyle]

If you think that, you are wrong.

[@ewalker1057]

@@Voxphyle If you think I care as to what you consider to be right or wrong, you're wrong.

[@Voxphyle]

@@ewalker1057 I don't expect you to care. If you did you'd put more effort into researching instead of listening to people like this hack.

[@ewalker1057]

@@Voxphyle Don't care about you and what you think. Self absorbed and full of yourself to think I should or do. Nothing to do with the topic which you fail to be able to discuss.

[@arentube8123]

He is so much smarter than all of the idiots that have have made tons of money by not listening to his advice, out of pure luck of course.

[@siamcharm7904]

the real inflation (devaluation) as of now is in real estate and the stock market both way up this tear.

[@sandal_thong8631]

Recently saw a video about a real estate speculator that was buying up houses above market value, holding some, then trying to sell or flip some at much higher prices. It was working as prices went up due to their and others' buying, but when the prices started dropping they were in trouble.

[@reflective-thinker7817]

Yes you only gave a half answer , also printing a lot of money and lend it with low ineterests make people wanna consume more and buy more which in turn causes prices to increase (demand and offer) like real estate : imagine nobody has access to printed money with low interest how the prices will be😮

[@wonderlam6366]

In 20 years there was only one global pandemic that caused all production to halt. Yet, money supply still increased. What happened? Inflation.

[@carlospulpo4205]

And this is proven by the record profits these companies are taking. If they did indeed suffer losses , then the price increases obviously more then made up the differance or else they would not show an increasing net profit. This is the same with the low interest rates jacking up home prices. Instead of sellers keeping the same price as prior to the drop in interest, they increased the asking price because they knew that the buyers can "afford" the increased cost because due to the low interest rates, they will pay the same amount monthly for a more expensive home. And guess where this gets passed on to eventually? the renters!

[@aylbdrmadison1051]

It's quite the racket. The homes are then repossessed and sold again and again and again. So more and even more wealth continually trickles up, just as reagan purposefully intended.

[@cogan1998]

It's natural that everybody wants more for themselves. But economics theory says that if there's sufficient market competition, nobody can raise prices excessively, because the customers are free to go somewhere else. It's when all companies raise prices then there's no choice but to pay the higher prices.

[@Merudinnn]

Capitalism doesn't like competition tho, hence the tendency towards monopoly at all moments through history. At this point in time, competition isn't that big of a factor. Even brands you think are competing are sometimes owned by the same people.

[@razzberry1262]

@@Merudinnn Capitalism cannot tend toward monopoly because monopolies rarely happen in a free market and usually fall aprt quickly as a result of the ECP. The way you get a monopoly is by using special privilages granted by the state, which by definition is a departure from Capitalism and into Merchantilism.

[@Merudinnn]

@@razzberry1262 no historical document supports that. Capitalism has always tended towards monopoly, it's in built into the system itself. Mercantilism isn't what you described at all btw lol but to your point about the state, the state arises in capitalism as a means to contain its own contradictions and prevent its own collapse. Without the occasional intervention of the state the system fails, as we've seen throughout history time and time again, even recently. It's not an external accident that those things happen either, it's built in to the logic of the system. You my friend, simply don't know what the logic of the system is so you can't account for it except by saying "that's not capitalism then." The issue is your theory of capitalism doesn't match up at all with the realities of capitalism. In other words, your position is pure ideology

[@razzberry1262]

@@Merudinnn I bet the great depression was caused by the free market too right? "The state developed in Capitalism"...jesus christ. "Contain its own contradictions"...yup because voluntary exchange based on subjective value is so contradictory. Ask 1600s Acadia what happens in stateless unfettered Capitalism as for your "no historical documents" bullshit.

[@Merudinnn]

@@razzberry1262 1600s Acadia is precapitalism as such. capitalisms defining characteristic isn't "the free exchange of subjective value" that's a childs definition of it, that definition also applies to every economic system that has markets (which isn't a defining trait of capitalism either) and yes unequivocally the great depression was caused by capitalism, that's an unarguable fact, as evidence by the fact that even you can't argue that point. You can only balk at it and assume it's not true, because you have no way to prove it wasn't cause you don't understand the economic system you're arguing for. Also don't be a dumbass who can't read properly, the state as a concept doesn't arise out of capitalism ya dingus. A specific form of the state does, a form of the state who's main goal, like all states before it, is to contain class antagonisms. You're ignorant of even the most basic aspects of an economic system that you feel the need to get online and argue in favor of, again this is pure ideology. Facts, history, economics, they don't affect your judgement because your judgement exists independently of reality, it's just an ideological fantasy you must cling to to make sense of the world. Educate yourself for Christs sake, atleast read Adam Smith if you won't read Marx, read YOUR OWN economic theories at the very fucking least. Have some self respect, don't start arguing something you're completely and willfully ignorant about lmao read Hegel too, it'll help you learn how to know things. As it stands, you do not.

[@GingerPeacenik]

There wasn’t much inflation before we went off the gold standard, so how does a fiat currency fit into it?

[@imaresurcher]

source for not much inflation pre gold standard?

[@aylbdrmadison1051]

@@imaresurcher : Read their comment again. They clearly typed _"There wasn't _*_much_*_ inflation"_ *not* _There was no inflation._

[@imaresurcher]

@@aylbdrmadison1051 pedant, i fixed it for u, youre welcome

[@moestietabarnak]

there wasn't enough new gold to feed the growth of economy either

[@bru513]

Excellent explanation. They keep using jargon to muddy the conversation with us laymen

[@Usammityduzntafraidofanythin]

Now what evidence does Mr Wolff have for this claim?

[@ExPwner]

None. He made it up

[@Usammityduzntafraidofanythin]

@@ExPwner el em ay oh zedong

[@deanjohnson6074]

We've had massive inflation over the last 20 years due to FED intervention, but most of it has been in the form of asset inflation. The reason we haven't had significant price inflation during that time is due to trade deficits, globalization is deflationary. The reason we're having inflation now is due to Covid. It caused massive disruption to global supply chains & labor shortages in the US. The government stimulus and FED liquidity have kept the economy from deflating but it's stoked inflation.

[@andrewtownend4511]

We've had higher inflation for years by fiddling the CPI.Current CPI is over 15% based on 1980 method of calculation.

[@stuartsloan]

“They can Jack up the prices of their inventory” this is the most naïve sentence I’ve ever heard. If that’s all they have to do why doesn’t Walmart increase all their prices by 50%? Shoot why not raise all their prices by 2000%? That would be such an easy way to make incredible profits right? Wrong! What happens is everyone stops shopping at Walmart! Please think before you speak.

[@mouzurX]

We only started expanding money supply in extreme amounts since 2008. Since then it went into stock market gains and housing. Basically anything scarce. Inflation on consumer good doesn't happen because why would it? The goods arent scarce and we can very quickly manufacture more of them w automation. Globalization has suppressed first world worker wages as well so those won't cause inflation. Look at money supply increase and S&P500 gains. Basically if you haven't put all your money in it you would lose 20% on it in inflation.

[@coopsnz1]

Government greed does , how rich are poltican today

[@missingpiece2071]

Didn't you argue your own point? Had the feds not expanded the money supply then the employer would not have the choice of increasing prices or increasing products.

[@missingpiece2071]

Because we are the world's currency we can get away with printing money longer than other countries who usually just copy our fed policy, but they see hyperinflation first.

[@PoliticalEconomy101]

Who do you think the Fed works for? Not the people. The whole point is to give more money indirectly to corporations.

[@missingpiece2071]

@@PoliticalEconomy101 they distribute the money from the top down, giving the top .1% interest free money and letting them decide how it will be spent, which allows them to front run their own allocations of capital. Resulting in wider wealth disparity and concentration of power. So yeah, your right, the FED's are also privately owned and have never been audited. What could go wrong.

[@aylbdrmadison1051]

@@missingpiece2071 : Now you're arguing your own point. And I still don't see how Wolff was arguing his own point. We are not the worlds currency, we are just the police who force that condition on other countries. In fact, in 1971 nixon eliminated the gold standard, creating much of the problems we now face. Money now only has the value our government forcefully ascribes to it.

[@philiptan2051]

The kind of inflation now is not caused by customer spending but by other factors such as supply chain problems which again caused by transportation and manufacturing problems. Because of the uncertainty of goods supply, the people who sell these goods increase their profit margin. One of the factor in this complex world is the containment policy of the usa against China. So, this inflation will not disappear as long as these problems are solved.

[@crowstakingoff]

Where does the new money go that the Fed pumps in? How do the people get it?

[@TheFunkadelicFan]

The Fed does not pump new money into the economy, government deficits do that. Companies get it, not people, then it goes into the non-productive savings bubble.

[@marshallsweatherhiking1820]

@@TheFunkadelicFan No. Banks loan most of it into existence.

[@TheFunkadelicFan]

@@marshallsweatherhiking1820 Er..ok?

[@basook6116]

this makes sense. when Profit System increase the price, people also have choice of saving their money too, however, this effects the companies

[@imaresurcher]

yes employers can jack up the prices all they want. the difference is there are other employers who will undercut them. those willing to accept the least amount of profit will out compete the others all things being equal. the pressure on employers to raise prices does come from external sources too, primarily the monopoly on land and economic rent gained by the landowners. price of land and rent rising eats into a greater n greater share of wealth creation until we hit another recession again n again. its not all about employer greed, but the ultimate parasite, the rent-seeker. marx was wrong, the georgists were right. discuss.

[@aylbdrmadison1051]

And why would other capitalists not raise their prices too, knowing that if they did that, they would be getting more money by far than if they swam against the current of greed? Because that is what actually happens with inflation. Other capitalists want inflation, so why would they do anything that would inhibit inflation? It's far more profitable for the wealthy elite who make all of these decisions to support inflation, then go back to being competitive after the prices are jacked up. That said, renters (loaners) are a massive part of the problem that's true. Marx was *also* right about that. Maybe reading Marx would work better than just assuming stuff because you are scared. Just saying. Also, in an attempt to alleviate that fear (for what good it may do) Communism clearly states that it is a *classless, monetless,* and *stateless* society. Can you name even one country in history that has been even one of those things, let alone all three? Because if you cannot name a country that has been all three, then you must admit that no Communist country has existed in known history. We've all been lied to, not just by countries like U.S.S.R., China, and N. Korea, but also by the capitalists who are the only ones who stand to lose if Socialism gains favor among The Peoples of the world.

[@kulturfreund6631]

I wish he were right. Unfortunately the amount of money has an influence. Traders cannot just go an order more stuff if the amount of stuff, raw materials, goods,?services doesn’t keep up with money supply. By the way printed tangible money makes only 2-3% of the money in circulation. The brunt is credit money in the computers and that’s created at the whim of the private banks.

[@austen8078]

He's making a very academic statement about the profit system. If you look at people who live hand to mouth, like sustenance farmers, they never have inflation regarding what they produce because it's not put on the market and given a monetary value. Wolff's alternative to the profit system is obviously some sort of market intervention to stabilize prices so employers do not inflate necessities. He would say the same about housing, health care, and other 'needs'.

[@kulturfreund6631]

@@austen8078 Maybe I'm wrong but I think the only way to fix this - and every socialist would agree - is to distribute fairly the amount of money already in existence. No further printing needed. Libertarians like precious metal salesman Mike Maloney (who also hosts protagonists like Ron Paul as interviewees on his channel) or Peter Schiff like to present socialists as naive idiots who live off of other people's hard earned wealth and claim for more money printing and sending pay cheques to the rank and file., thus causing big inflation, if not even hyperinflation. Of course this wouldn't work for a just distribution of wealth and as long as the rich also always get an increase of paper money (like for stock buy backs) proportional to the existing imbalance. I used to comment that socialists don't want more money printing but a just distribution of the money already existing. That would be sufficient : )

[@siamcharm7904]

not quite the fed creates money by expanding its balance sheet,i.e. buying up all issues of new bonds thru blackrock.

[@kulturfreund6631]

@@fattyacid1901 "a neocolonial US imperialist the supports US financial hegemony" seems a bit far fetched. What in particular made you deduce/conclude that?

[@kulturfreund6631]

@@fattyacid1901 I started questioning classical socialism at a very early stage of my political awareness history. It was around 1982 that I found something the folks who complained about exploited humans, but never cared about exploitation of nature/environment and farm animals. were lacking. Like for ruthless capitalists it seemed to be OK for socialists to for instance exploit farm animals and make them live and get slaughtered under horrible conditions. It was only the humanity aspect that counted to the socialists I met or heard or read, never that of other beings. They just cared as much for a cow or a pig as a reckless capitalist cares about workers or peasants in a remote corner of the Earth. That was what alienated classic socialists to me, and what steered me towards the ecological movement. ....But this is just a side story. I don't know if Richard Wolff's strategy is to raise awareness among the US-domestic working class people first and get things changed for the better in the US first, and, if this theoretically achieved someday, then as a second step seek equilibrium with the exploited nations of today. Maybe it would be a step too far to tell the American worker "Hey, you are exploited by capitalism, but there are people in Africa, South America etc. being even more exploited by it. So help us fight for them, and when our western world super rich have shared all their wealth with the billions of super poor in those countries, the equilibrium we then have achieved for all individuals on the planet is just about the standard of living, you , the American workers, have already today. " - That wouldn't be a great incentive for the self oriented among the exploited to join the movement and make efforts of sacrifice. That would seem to them like return free risk-taking. Or?

[@alexshanto7285]

1:21 - 1:27, What's why I like this professor and love economics.

[@bluewater454]

You won’t learn economics here. This was a pathetic display of complete economic ignorance.

[@aylbdrmadison1051]

@@bluewater454 : And yet you are incapable of pointing out even one reason for making that statement, or you would have. Just saying something doesn't make it true. There are whole lot of ignorant people in the world who simply believe something because someone like you tells them to believe it. There are also people who lie and just make up such statements out of thin air and fail to back up those statements, purposefully, because they cannot.

[@alexshanto7285]

@@bluewater454 In general, supply of more money creates more demand and price will go up. But in the market of third world countries, government can't regulate all retail and wholesalers( failure of institutions and corruption). That's why they make syndicate and artificially raise price. It may be applicable to developed economies too.

[@bluewater454]

@@aylbdrmadison1051 Good grief. How do you pronounce that first name? al-LEE-bi-dr? AA-lee-b-DRR? I admit it. I can’t figure it out. Anyway. My problem isn’t that I can’t give one reason for making my previous statement. My problem was picking one out of an almost endless supply of reasons.

[@bluewater454]

@@alexshanto7285 Wow. a Wolff listener who understands how money supply can affect inflation? I’m just trying to decide if I should be impressed or just shocked.

[@kpkang2072]

Very interesting point of view, but isn't it true that government poured way more money into economy in recent years vs before pandemic? I'm still seeing this is a major factor of current inflation today.

[@Gian-ni]

I've been thinking this forever. Put price-caps, price-control, especially before letting people know that a bigger flow of money will be pumpted into the economy.

[@disposablehero1235]

yea genuis...we have an unlimited supply of raw material on earth. how dumb are socialist really?

[@charliecheng3340]

And it is a domino effect, the employees see prices jump and there salary stays the same. So the employees look for jobs that pays well. The employers now has to pay more for employees then the employers has to jack up the price and so on and so forth. That is cause and effect., Roundabout inflation to no end

[@bru513]

Hasn't minimum wage been the same for about 45 years in the US?

[@charliecheng3340]

Not in the high paying rollers Professional and CEOs

[@grapentine739]

@@bru513 exactly and now they want to get rid of minimum wage all together

[@aylbdrmadison1051]

@@grapentine739 : "They" being the republicans.

[@ExPwner]

This is a complete lie.

[@jedics1]

'Because evidence is boring' Haha, Im not above enjoying some cynical humour :)

[@ncooty]

This guy's reasoning seems based on a combination of misstating others' arguments and committing logical errors.

[@marcionphilologos5367]

INFLATION WITHIN MODERN CAPITALISM IS NOT ABOUT MONEY CREATION OR THE PROFIT SYSTEM, BUT THE VALUES OF CERTAIN IMPORTANT MATERIALS, DEPENDENT OF SUPPLY AND DEMAND, WHICH DO GO INTO THE ADVANCED SERVICE SYSTEM. FOR EXAMPLE; THE MODERN SERVICE INDUSTRY IS BEYOND CAPITALISM, BUT THE OIL INDUSTRY FOLLOWS STILL THE PRIMITIVE LAWS OF CAPITALISM. IT WOULD THEREFOR BE A GOOD THING, WHEN THE ENERGY INDUSTRY IS UNDER CONTROL OF THE STATE, AS IN SOCIALIST CHINA, TO BREAK A WAVE OF INFLATION......

[@aylbdrmadison1051]

Who decides to raise prices? Who decides to purposefully make the supply low (like oil companies) so they can increase that demand? Oil companies have always done this, long before anyone even considered that we could run out someday. No service industry in a capitalist country is beyond capitalism. That's silly at best. Also, someone with any confidence in their own beliefs has no such drive to scream louder than those who are certainly more liable to actually formulate reasonable hypotheses and draw logical conclusions. Typing in all CAPS (

[@marcionphilologos5367]

@@aylbdrmadison1051 THE CHRISTIANS DID BELIEVE THAT PERSONAL SINS CAUSED ALL SUFFERING, STUPID MARXIST POINT AT THE CAPITALIST AND THE EMPLOYERS......... THEREBY MARXIST DO NOT REALIZE THAT THE MODERN SERVICE SOCIETIES ARE BEYOND INDUSTRIAL CAPITALISM (AS DEFINED BY MARX)

[@ericphantri96734]

Extra money does not create inflation because a millionaires still eat maximum $ 200 does not change resaurantes price too much but losing tools $5000 / a years does cost inflation because each Mechanic had their own tools that kept losing by the theft

[@Mantarhochen]

So what does the increase in the money supply do? It obviously must have some effect.

[@TheFunkadelicFan]

It causes the economy to grow.

[@michaelleen7122]

@@TheFunkadelicFan it lincreases supply causing a decrease in value of the dolar, requiring more money to buy things than before the money printing hence inflation by money printing not to mention the use of money to buy assets causing them to increase in value another type of inflation

[@siamcharm7904]

@@michaelleen7122 absolutely correct.

[@TheFunkadelicFan]

@@michaelleen7122 Inflation is a product of scarcity, not demand.

[@michaelleen7122]

@@TheFunkadelicFan so is demand

[@RobwLPOC]

This is the biggest bunch of ever seen in my life.

[@PeeedaPan]

Im a fan of Dr. Wolff for over a decade. But i think he is wrong about Bitcoin and inflation. The cantillionaire effect is why we have so much economic inequality. Its why people need to go into debt to have a decent living. UBI is on the table now because the inequality has become so bad. But the source of all this is the money printing by government. We need hard money in society and we need businesses to be worker owned and run. These 2 things will fix the economy.

[@Kevin-oc2jb]

"Money supply doesn't cause inflation"- that's all you need to hear to know a fool is speaking. The record amounts of money we were printing into the economy has been inflating asset prices for years (hence the rich have been seeing the most inflation) and it really took off in 2020. Look at the M2 graph and you'll see an unprecedented spike.

[@saramuhumphries5197]

👍💐

[@anupthapa2095]

Nonsense

[@hypersonic6856]

"We've been pumping record amount of new money for the next 20 years and we haven't had any inflation." Inflation means expansion of the money supply, not rising prices. Yes we have seen a significant increase in the CPI over the past 20 years. Look at how the cost of housing, medical care, and college tuition has soared. In addition, many of this inflation gets exported overseas; the result is more outsourcing and a growing trade deficit.

[@BasicallyBanal]

Inflation is absolutely by definition prices going up. If you want to say the reason is because of increased supply go ahead, you may be wrong but at least not making shit lol. Inflation does not mean more money supply, it means increased prices.

[@disposablehero1235]

@@BasicallyBanal no it is the increase of the money supply. your pea brain doesn't understand the every fed note has to be payed back with interest on top. business would then know that the government will increase taxes on business so the treasury can repay the federal reserve every note they printed.

[@mayuresh1704]

Excellent! Perfect explanation!

[@robertmontgomery6256]

He’s right that producers don’t increase orders in response to increases in the supply of money. But why not? Woolf says they “choose” to raise prices in response to increased demand rather than to expand output. What would Marx say? Capitalists will expand production when the rate of profit on invested capital is high enough to compel them to increase their purchases of inputs! As a Keynesian Woolf doesn’t want to see this so he ends up saying asinine things about employers making choices. I’d love to see a discussion between him and Michael Roberts or Alan Freeman.

[@coopsnz1]

The socialist leader in Australia own 5 homes and his mum never worked live in public housing

[@missingpiece2071]

If you wanted to avoid stagflation wouldn't the best thing you could do is create the illusion of scarcity and isn't that what inflation does? I agree with all your points and appreciate your insight but everything is relative. So if stagflation was the alternative then maybe inflation is not so bad. Of course if sustainability and planet habitability is the goal then stagflation may be ideal. If what you do doesn't matter because other countries will just burn up the resources if you don't then maybe you shouldn't be sustainable. Do you do the right thing because it's the right thing to do even if in the end the sun becomes to hot for a habitable planet in a billion years anyway. If you choose to have kids then it's no longer your choice to make and more people are choosing not to have kids.

[@MrDXRamirez]

What do people really think about a store of goods when they walk into a Home Depot? Are they walking down the aisle acknowledging each product is an entire industry or are they just blindly going for the object they need?

[@SolaMelodica]

This guy seems very angry.

[@iamstartower]

🍅🍅🍅

[@MrDayinthepark]

in this rare case I will disagree with Dr Wolff. As an owner of real estate and stocks, I can say with great confidence, price inflation began with the increase of the money supply, over a decade ago. The inflation only hit consumer prices (the CPI) more recently. That's when the capitalists saw the opportunity to raise consumer prices. All the businesses in buildings, are now raising prices, because their landlords have raised rents. The effect was slow because many leases are by contract, set for multiple year terms. Eventually, it always hits consumers.

[@bortsimpson4536]

yep, no inflation in Venezuela

[@matejebach5487]

It is question of monopolization, so preferred by Chicago School of economy. Another is question of pumping money in economy, does it goes in economy or it goes through stock market and other fraud into pockets of richest. It goes into pocket of super-rich leaving other to starve with collapsing economy.

[@wnklee6878]

He surely is wrong on this one!

[@hypersonic6856]

The reason why they jack up the prices is because they are able to sell the goods and services. How are they still able to sell these goods and services despite a rise in prices? Because of the spike in demand caused by an increase in the money supply (inflation). It's a good thing that these companies raise prices because if they didn't, there would be more shortages because the spike in demand would buy up everything.

[@yashpatel261]

Holy shit you made a great point

[@casperguylkn]

Free market: monopoly, mafia and cartels.

[@gg-sb8mn]

They can raise their profits we don't have to buy their products. We have too much stuff anyway.

[@VK-zm4jc]

Price of real estate went up. We do not have more houses. Why? Because it is impossible to "order" more as professor wants. As a result more money competing for same number of houses resulting in inflation. That is just one example where you cannot just order more. We can also talk about current supply chains problems. Ordering more is not as simple as it sounds if we are talking about whole economy. So i have to disagree with professor.

[@Subdood04]

You clearly do not understand basic economics.

[@deandekranis4286]

Did this guy just say there has been no inflation in the last 20 years?

[@mallyu987]

It used to be 35% Profit Margin was normal, now every business Needs to Mark-Up 100% or More to Cover Overheads (Taxes, Rent, Labour, Water, Hydro, Regulations etc) with Government the most PREDATORY from 1st day - Capitalism Gone STUPID. Chinese Manufacturers can operate with 5% Spread & still Earn a DECENT Profit. When last did you hear "Decent Profit" in West? They now Charge the MAXIMUM Customers can pay, with ZERO Caution from Regulators who Refuse to Regulate. Now they BLAME China.

[@TheJasonbail]

Many businesses would kill to have a double digit profit margin the only businesses that are able to to get away with 35% margins without being called gougers are tech

[@coopsnz1]

Turnover not profit it costs pushed up by government

[@hypersonic6856]

Inflation doesn't mean rising prices. It means the expansion of the money supply. Prices don't expand; they go up or down. This "economist" can't even get the basics correct. He also lacks an understanding of supply and demand. Why didn't businesses try to raise prices significantly five years ago? They could have made much larger profits! Of course they couldn't raise prices because people would buy less, which could result in less profit for the business. These higher prices are the result of a spike in demand, which is caused by a massive increase in the money supply.

[@TC-eo5eb]

Prof Wolff states "Don't be fooled by business bluffs" and conveniently omitted "supply and demand" in his rant about his perceived greedy business owners. It is obvious Prof Wolff has never owned a business in his life and is teaching about a topic he has never lived personally. Business owners prices are partly, if not mostly dictated by supply and demand. Example: A small privately owned business owner sell televisions. Within 1 mile of his business are 3 big box stores who also sell televisions. The big box stores can sell their T.V.'s cheaper based on multiple variables. The small business owner can't just jack up the price of his T.V's willy nilly or his customers will just go down the street and find one cheaper or order one from Amazon. There are literally dozens of other factors hog tying business owners decisions on how to price their products too numerous to mention here. Hundreds of thousands of small business owners have lost everything they own attempting to live their dream of being a small business owner. Prof Wolff is either clueless about the business world or he is the one trying to fool you.

[@imaresurcher]

it's like he thinks "employers" are just one big monopoly and can dictate prices as high or low as they want, as if theyre not competing with each other, and are totally free from external economic pressures. this only occurs to some extent where big corps have cornered the market

[@nortonnewmann3711]

He also has previously explained time and again how the "system" allows the big box stores to even exist. If you're a hard core Capitalist who believes in the "free market", isn't it survival of the fittest? The small business owner deserves to be put out of business because he wasn't "smart enough" to figure out how to compete. You know - "only the strong survive". Whether you think it's fair or not, you're living in a Capitalist system where profits rule. Consumer "need" is defined by whether a product is PROFITABLE to produce - regardless of the importance to society in general. Advertising propaganda has conditioned people to confuse WANTS with NEEDS. The concept of "small business" is nostalgic... but not relevant today. The "small businesses" who survive must quickly convince large investment firms on Wall Street to invest (gamble) on their venture (venture capital). If you're successful, you will be bought out and merged into another investment venture. And on and on... soon you become one of those "big box stores" which runs the mom & pop shops out of business.

[@imaresurcher]

@@nortonnewmann3711 what proportion of the economy is small business vs corporate monopoly

[@aylbdrmadison1051]

@@imaresurcher : You really don't understand the concept of greed? The capitalists see a chance to raise prices and they take it. They create shortages, thus increasing the demand, then they jack the prices up causing inflation. These things then make the lives of the working class even more desperate, thus ensuring a downtrodden and less resistant working class who have little choice but to accept it. It's not like wealthy elite capitlaists don't know when being competitive would stop inflation. And inflation benefits who? I know anyone can figure that out. At least I hope no one is too stupid not to know it solely benefits the wealthy elite capitalists.

[@aylbdrmadison1051]

@@imaresurcher : _"what proportion of the economy is small business vs corporate monopoly"_ Irrelevant to the current discussion. But this country, and every other country, was built on small business, not the corporations forced on us by conservative-capitalism. For feks sake, they've even forced us to accept the insanity that corporations have the same rights as not just small businesses, but they force us to accept corporations having the same rights as an individual. Conservative-capitalism is an all out war against humanity. A war that has even now devolved into a war against life itself. They have forced us to accept being part of the cause of a mass extinction event.

[@yokosucks]

No inflation in 20 years?! Well, that’s good to hear. Someone should alert reality.

[@mkaiser29]

Exactly!! You don't see many truth-tellers these days! Mr. Wolf, hats off to you sir!

[@nicholaslepan2176]

we have an inflation rate, this is wrong. Also, he ignores I interest rates

[@markfischer3626]

Thank you Professor Wolff for explaining why the law of supply and demand is wrong and the fallacy of competition in a market economy driving prices down. I knew all of those books on economics and finance I read got it wrong. If you want to wreck a business put it in the hands of an MBA. What the hell kind of idiot are you? Who does the government give the money to? Banks, wealthy people in tax cuts. What do they do with it? They invest driving the price of the stock market up. Lots of money chasing a fixed amount of stocks. In fact companies are buying back their own stocks reducing the market availability thereby reducing supply. What happens when you cut oil production in the name of saving the planet from climate change? Oil goes from -7 dollars a barrel the way the futures market had it a few years ago to 80+ dollars a barrel the way it is today. The increased cost of fuel, more than doubled since Biden decided to unbuild back better drove the price of oil and gas up because the supply was reduced. The reduction of supply was faster than the increase in money so everything that depended on fossil fuels became more expensive because the price of making it and transporting it went up. Small comfort for the middle class and poor whose income rose at a much slower rate than prices reducing consumption. Supply chain disruptions hurt too. Computer chips necessary for modern car manufacture suffered a shortage for a number of reasons due to the pandemic for one. Therefore the supply of new automobiles went down and the prices of both new and used automobiles went up. If profits are so high why are so many businesses going bankrupt? In places like China where the cost of electricity is fixed the utilities are going broke because the price of coal has risen and they can't pass the cost increase on to the customer. That's what happens when you DON'T have a market economy but a centrally planned and controlled economy. Why does China have a shortage of coal? Because Xi JinPing is waging and economic war against Australia and will not import their coal. Why? Because the Prime Minister of Australia demands and independent international investigation of the origin of the Covid 19 virus. Xi JinPing acts like he has something terrible to hide. So a billion dollars worth of coal sat on ships in Shanghai harbor unable to offload. Why does Australia matter so much to China? Because for some lucky reason Australia's coal has a higher thermal content than other coal and China's boilers for power plants and other applications are calibrated to work optimally or exclusively with it. Result, power shortages, blackouts, cuts in manufacturing output, concern about coal and electricity for heating homes this winter. You don't need an MBA to become an economic planner in China, just know the right people in the faction of the CCP in power at the moment. Looks like utilities in Britain are also going broke. Same reason, lack of adequate supply. In fact all of Europe is worried about a gas shortage this winter and Russia is not going to help it out.

[@herojiro31valmire32]

He is not a businessman or fiscal expert. If you have 10 dollars and 5 pieces of fruit. If suddenly you print 10 more dollars you will pay twice as much for that piece of fruit. Don't let others confuse you; money only has worth because it's scarce. If you give someone free food; the rest of us who buy their own food pays the inflation price. Don't believe in a free lunch. The people who get food stamps rarely get off them which is a minus of capital. You work for food; exchange you're labor for food. You get something for free; it is not free but paid for by the tax payers. The higher the tax the less people what to work. That is the real evil of Communism and socialism.

[@coopsnz1]

How much wealthier a poltican today that where your tax dollars going

[@coopsnz1]

Highest tax country are Australia & Northern Europe

[@---uf2zl]

This guy is completely out of touch, we've had ~2% inflation for 20 years, and now inflation is around 7%. Increasing the money supply does cause inflation, and it's extremely ignorant to say the contrary.

[@---uf2zl]

@@vanardomerchant7511 Dude, I study bloody economics, I know what I'm talking about. The US dollar strengthened during the great depression because there is always deflation during times of economic crises. Economics is pretty straightforward on this: ceteris paribus, increasing the money supply will cause inflation, there is no way around it. We are currently running at 7% inflation YoY.

[@---uf2zl]

@@vanardomerchant7511 The US dollar index measures the strength of the dollar IN COMPARISON to foreign currencies, which doesn't mean anything if other currencies are also suffering from inflation. If you look at the value of the dollar in real terms, you'll see that inflation has divided the value of the dollar by 20 since 1913.

[@vanardomerchant7511]

@@---uf2zl lol 😂 the dollar is a lot deeper than one chart, I’m just giving an example. Either way, we wish you a lovely day mate- we all just see the world very differently / very cool stuff

[@coopsnz1]

The government crooks greedy how wealthy are poltican today

[@jgamarraf]

so dumb.

[@Bonaventure2AK]

This gentleman, for lack of a more accurate term, needs to attend Econ 101 and learn about "supply and demand". Employees do this every day, go to the highest paying employer. Farmers do this every day, sell to the highest bidder for their crops. Homeowners do this always, sell to the highest offer. How the FED pumps money into the economy is a whole different level that this gentleman has no idea about. Educate yourself with real facts, not You Tube garbage.

[@raymondg5643]

How to explain the beef steak jumped from about $11/lb last year to about $19/lb now?

[@michaelrichards90]

Everything this guy said was wrong. Expanding the money supply is literally the definition of inflation.

[@imaresurcher]

says who?

[@ElBandito]

Nah, inflation is referring to the increase of prices, not the increase of currency circulation. In a capitalist country the retailer controls the price--hence they, or the profit system is responsible for the increase in prices.

[@siamcharm7904]

you are correct.

[@mba2ceo]

wrong !!!

[@aylbdrmadison1051]

Are you really so set on proving you are a perfect example of your YT user name?

[@mba2ceo]

@@aylbdrmadison1051 yes ... I live on the plane of idiots and have an internal desire to indicate that fact

[@chuckleaf8027]

Wolff is wrong about inflation. There's evidence of price gouging, sure, but look at the money supply. It's been increased 40 percent in 20 months. He also said we haven't had "an inflation" for the last 20 years, which is flat out wrong. We always have inflation to some degree..as if we didn't see a big run up in prices before the housing bust? This guy can't see the forrest for the trees. We've had the largest and fastest increase in M1 in history recently, and inflation just can't be explained away by employer's greed.

[@grapentine739]

Either way minimum wage needs to be increased not done away with

[@siamcharm7904]

you are correct.

[@carloiaboni]

"Profit" is not a dirty word. In fact price gouging is not so bad. Being an employer is a risky business. Who wants that headache? These words create incentive. Think restaurants. They lost their shirts during the pandemic. If they can (which is not a given), why not raise prices to make up for those losses? Do you really want the alternative which is price controls? They are a disaster.

[@bru513]

Disaster is what we have right now. I'm not afraid of regulations. I would like to see the government audit the prices of corporations and punish them for unfair practices, as well as union busting and not raising wages when they absolutely can.

[@carloiaboni]

@@bru513 1960s East Germany. Yea, I miss those times. We need the Stazi back.

[@nortonnewmann3711]

You've just been conditioned to believe that someone "stealing" an ever increasing portion of your production effort is normal. You could have also been conditioned to believe that stealing food from your neighbor is okay too. Just call it a "cost of doing business" long enough and people will start to believe you.

[@nortonnewmann3711]

@Mindless Entertainment Actually if PROFITS weren't a part of healthcare...