A consensus seems to be forming around the idea that our recent (possibly transitory) inflation was largely driven by corporate profiteering responses in the face of a global supply chain shock caused by the Covid-19 pandemic. See: https://www.newyorker.com/news/persons-of-interest/what-if-were-thinking-about-inflation-all-wrong and https://www.levernews.com/how-pundits-inflation-myth-crushed-the-working-class/

The devil, of course, is in the details. Economists, enamored with outdated 19th century views on causality, hellbent on separating the wheat from the chaff, will continue to debate the “true cause” versus “the symptom” of inflation as if the world ever truly has a single identity to reveal. Nevertheless, one can lump variations on this economic tale under the single heading Greedflation.

Early on, Democratic politicians like Elizabeth Warren and Bernie Sanders were pushing the Greedflation line of reasoning. Economists like Noah Smith pushed back hard, equating it to the kind of fringe, gold-buggery economic ideas we often see on the right. On Twitter, I challenged Mr. Smith’s characterization. Whether or not profiteering was driving most, much, little, or none of our inflation seemed to me a genuine empirical question, perfectly consistent with textbook ECONOMICS of monopolistic pricing power (e.g., are “firms raising prices in anticipation of future cost increases? Or it an increase in monopoly power or higher demand?”) In other words, the Warren/Sanders line may be wrong, probably is wrong, but was certainly valid economic reasoning to be refuted by empirical evidence not dismissed through hand waving from high academic perches. Mr. Smith huffed, dismissed and snarked. Really, how much do grocers control pricing? Well, I don’t know. I’m not an economist and I certainly don’t specialize in market share and the ability of individual firms to set market price. Nor does a simple glance at market share reveal the scope of the problem because grocers are also retailers of products and can therefore use their leverage to assert monopolistic pricing practices on individual items (regardless if they take advantage of that position or not). Nevertheless, that wasn’t the point. The point is standard economic orthodoxy admits the possibility which is why I pushed back that this line of thinking was a fringe idea. (Even this was a step down for Mr. Smith as we went from totally bonkers idea to Kroger does not have sufficient monopoly power.)

Regardless, this isn’t a complaint about who was right or wrong. It’s about presentation of basic economic data and facts. Greedflation was a novel and somewhat unorthodox explanation. But it was not out of left field, conspiratorial as some economists (more anxious to display their centrist chops then to disseminate factual thoughtful discourse) argued at the time.

Twitter could work to flush out these ideas better, bring to the surface those hidden assumptions that drive much of the architecture of how we approach problems. A better discourse for sharing ideas. But that promise remains unfulfilled. Instead we reinforce dubious lines of thinking, and reject attempts to refine our discourse. I was less bothered by Smith’s cavalier dismissal (as if he couldn’t be bothered to think of a single, valid example of monopolistic pricing power and besides who the hell am I, some anonymous loser on Twitter?) then the legions of followers who felt compelled to pile on with personal anecdotes of unnecessary and often unrelated examples. This is why I’m no longer on Twitter. It’s great promise is unrealized because we cannot be challenged or asked to reflect in a more careful manner in a mad rush to be first (first = relevant).

And no, I’m not gonna pay for your substack where our current crop of elite intellectuals cocoon themselves within a select privileged list of paid subscribers (how does one set a market price on bullshit?). Really, the idea that Everyman is an island on to himself, is this what we think the future holds? If you really value your ideas you would want them to be free and accessible to all. But I am, and have always been, a democrat first and foremost.