Breaking News: Stuff Actually Costs a Lot.
Higher prices are not necessarily a bad thing.

By Douglas Rushkoff. Published in Medium on 13 June 2022

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Yes, gas prices are up. I saw a woman fill up her old station wagon with premium the other day, and her pump total went over $90.

“Ouch!” I said to her, smiling.

“This damn inflation will be the end of us all,” she replied, then added “Let’s go Brandon,” (meaning Joe Biden should be blamed for this outrage) as she drove off.

Of course, the reason why gas is so expensive has less to do with Joe Biden or even the war in Ukraine than the oil industry itself. People stopped driving and flying during Covid, so oil producers reduced their exploration, drilling and output. Now that people are active again demand has returned, but supplies will take at least a few months to catch up. When demand outstrips supply, prices rise.

But oil companies are also exploiting the crisis. They should be profiting less in an environment of limited supply, but by gouging prices they’ve ended up having some of their most profitable years ever. The money is not going to the cost of the oil, but to the shareholders of oil companies. (See Naomi Klein’s The Shock Doctrine for how such “disaster capitalism” works.) This is a distorted, corrupted market, with prices opportunistically orchestrated by corporations we also happen to subsidize with about $20 billion tax dollars annually.

Much of the rest of the inflation we are experiencing results from similar dynamics. During Covid many factories shut down. It didn’t affect prices much because most people were buying less stuff, anyway. Now that people are back in the stores (some of them, yes, with unspent relief checks signed by both Trump and Biden), demand is outstripping limited supplies of goods. At least for the moment. This will pass.

The longer term trend here, the one that may not pass so easily, is that people really don’t want to go back to work as they once knew it. After spending the last couple of years on Zoom calls, or doing customer service by phone from home for a retailer, or saving up savings, or taking care of loved ones, many former workers are reluctant to head back to the office, big box store, or factory floor. It’s inconvenient, a lot of work, and still a health risk.

They may not have unions to fight their battle for them, but they want more money all the same. Yes, the real reason why things are starting to cost more is that the people making them, digging up the resources for them, and delivering them want to be paid a fair wage for their work. And now that China is having its own issues with lockdowns, their ready supply of “low cost” labor to undermine American wages has been sidelined.

We have gotten used to many products being cheaper than they should be. I am giving away my age here, but back when I was a kid, people bought less stuff, and kept it for much longer. My dad used the same transistor radio he bought when he went into the army until he died. I listen to Mets games on it to this day. It’s not just that it was made better; it’s that we didn’t think to purchase anything we would dispose a couple of years later. These were our beach chairs, this was our garden hose, this was our salad bowl, and so on.

Things may have cost more relative to our earnings, but that didn’t really matter because we purchased so many fewer things, and we only did it once for each thing. This allowed workers to be paid more, which in turn encouraged them to remain longer at the same job, which in turn led to higher levels of competence, which in turn led to higher quality products that lasted longer. If we couldn’t afford something, we saved for a few weeks or months more until we could. We didn’t resent the price, because we understood that’s what it costs to make the thing.

So yes, we are all now experiencing sticker shock on a daily basis. Cars that were once cheap now cost as much as base model BMW’s. This is the cost of hiring employees instead of gig workers and not being able to externalize the social, economic, and environmental hazards of enslaved labor to so-called developing nations.

The stock market hates inflation; people with lots of cash hate inflation. But people in debt tend to benefit because the dollars they have to pay back are easier to get than the ones they borrowed. The true victims of inflation are the poor, the elderly, and others on fixed incomes. Prices are going up, but — unlike workers with rising wages — their available spending money is the same. (The fact that their food, water, and other life essentials can be rendered out of reach by market forces is a sad failure of our eroding social safety net — and a discussion for a different post.)

Luckily, those of us buying less stuff (because it’s so expensive) will have more time to spend with them and working on their behalf. Fewer tickets to the game or the movies means more barbecues at home to which to invite them. Fewer gallons of gas in the car means more of incentive to meet the neighbors and assist those in need.

Prices may be going up, but the cost of taking care of each other for real is going down every day.