Is inflation morally wrong?

Where other historians saw a mob of hungry peasants, E.P. Thompson saw resistance to capitalism. Studying England’s 18th-century food riots, the Marxist historian coined the term “moral economy”. The rioters, he argued, were not motivated purely by empty bellies, but by a belief that the bakers, farmers and millers had violated paternalist customs, which suggested they should limit their profit, sell locally and not hold back grain. Gradually, Thompson argued, the moral economy was being displaced by a market economy, in which prices follow the amoral logic of supply and demand, rather than ideas of what would be a “fair price” in times of scarcity.

Americans may not be rioting over bread prices, but they are angry. President Joe Biden now faces a tight race for re-election. Swing voters are particularly annoyed about inflation, as the price level has risen by a cumulative 19% since Mr Biden’s inauguration. Yet this frustrates many left-wing economists, who see the tight labour market and rising real wages in America as a great success. To them, inflation is an irritating—and now stubborn—by-product of the mixture of fiscal stimulus and industrial policy pursued by Mr Biden. It is not the main story.