Again this year World Economic Forum which takes place from January 16th to 20th in Davos, Switzerland. To give a touch of Italian, we can consider it, at least for the temporal proximity, as a kind of international SanRemo of the business song, if there was one. More than 2,700 carefully selected guests from 130 countries, including politicians, pundits, journalists and commentators, gather here every year in luxurious hotels and offer us their musical repertoire, d year.
This lavish show by powerful technocrats, or self-proclaimed technocrats, of the world economy shows us how it’s done Global capitalism looks at itself and is content with itself of the results achieved, of course.
One of the key themes this year is inflation, its causes, its effects and the tools to deal with it. A topic that was intensively researched in the 1980s, when inflation was not only in double digits at the time, but also went over 20%. A lesson that, however, is not understood as much as it seems, considering the prevailing ideas among the people of Davos, which are also expressed in the president’s optimistic statements Confindustria published directly in Davos. In an interview, he explained that since the inflation of 22 and 23, inflation is tied to commodities by imports, and the price of these commodities stabilizes, inflation will fall essentially constantly in the second half of the year. As energy prices fall, so too will inflation.
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The analysis of the President of the Confindustria in Davos is correct, almost trivial, but it is also incomplete, reductive and ultimate misleading. Even if inflation were very low in the second half of 2023, the problems related to the recent price changes would only be half solved. However, even with zero future inflation, the impact of past inflation must be considered. 2022 inflation cut 100/150 euros per month for salaries and that money will never be reclaimed even if inflation 23 were reduced to zero.
Ultimately, the question that the President of Confindustria pretends to ignore, and which is instead central today as it was in the 1980s, is this: how to share the cost of inflation fairly. Surely the inflation of 2022 will not be fueled by companies that have largely defended and even regained their profit margins by raising prices sharply and taking advantage of energy rebates. Things are going very well for Italian companies, and there is no other way of explaining the various records achieved by the Italian production system in international trade. But also me self-employed they could adjust their income by gaining additional tax privileges and by manipulating prices at will.
For what it’s worth, but personal experience is always valuable, I cite the case of my barber who brought the haircut award from 22 to 25 euros, rising in line with inflation. The pensioners are also sufficiently pardoned and, thanks to an old law that has been changed for the worse, receive decent allowances.
Those who have paid the full price of wartime superinflation so far have been the ones Employee, both public and private, about 16 million people. For them, unless things change, inflation has resulted in a severe and permanent reduction in income. That can only change with the forthcoming new round of contracts.
The central question then does not concern the raw material price, but rather whether i unions of workers will accept the Confindustria logic implied in the Davos position, i.e significant contract increases. Only in this case is the inflation calculated in Davos actually reduced. On the other hand, if, as is likely, employed workers try to regain the purchasing power lost in 22 and 23, inflation will resume as it has in the past.
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Indeed, inflation is always the expression of a social and redistributional conflict. President Bonomi dreams of workers giving up the need to reclaim incomes slashed by inflation. But why should workers be the only ones paying the high inflation bill? It would be neither logical nor fair.
In short, the business leaders gathered in Davos hope that the dependent working class, which despite the different narratives still exists, has short-term memory and give up cash. With inflation, the seemingly vanished theme of social conflict returns. We did not emerge from the spiral of inflation in the 1980s with the entrepreneurial arrogance that would like to shift the burden of the crisis onto the employees alone, but through the well-known policy of the income; that is, to demand some form of economic moderation from all social actors, the state, trade unions and companies. In order to build on the success of the past, it would also take, among other things an upright political class of the problems of the present. This is one of the many challenges facing the Meloni government. Unfortunately, his first financial doesn’t seem to be going in that direction.
But please don’t say that future inflation will be to blame irresponsible wage demands by employeeswho have hitherto been all too responsible.