Corporate Power and The Return of Inflation

Abstract

The origin of the current inflation stemmed from the disruptions caused by the COVID-19 induced recession, the subsequent efforts to mitigate those disruptions, and the exercise of corporate power. First, the article addresses the mainstream views of inflation, all of which ignore corporate power. Second, the article considers the concept of administered prices developed by Gardiner Means. Third, the article examines the empirical data, finding that the profit share of domestic income is at its highest since 1929. The fourth section considers the policy of countering inflation by raising interest rates, the threat of recession, and the reallocation of claims to the “functionless investor.”