High Inflation and Labour Militancy in Historical Perspective

Abstract

This article argues that one of the key aspects of the post-COVID economy, inflation, deserves more attention than it has received, and particularly more analysis from a historical perspective. It examines each of the periods of high inflation – during and after World War I, after World War II, the 1970s, and the post-COVID economy – and shows a clear correlation between inflation and increased worker militancy. It also explains the causes of this correlation, beginning with the most evident: inflation weakens the buying power of workers’ wages. But deeper analysis reveals five more important factors that recur in every period of high inflation: expectations of the working class tend to rise; workers are forced to make serious sacrifices just before inflation rises; governments tend to be highly active in the economy, making the impact of inflation highly politicized; inflation coincides with political and ideological instability, and elite failures to show they are in control; eventually elites take a “zero sum” approach to policy and impose solutions that inflict more pain on workers.  Regarding outcomes from resistance, another pattern emerges in every period of high inflation: while worker mobilization can help to win many strikes, there are limits to the broad based gains that militancy alone can make, especially in the face of the power of capital and the state.