Here is the second chapter of the book.
I’m not necessarily convinced. Having lived through the seventies, I know that the market power of some individual workers (through unions) was exploited to the detriment not so much of their employers as of other workers. This simple class story is not convincing to me. It also ignores the current paradox of prices not having fallen sufficiently to offset stagnant or falling nominal wages – there surely is a story to tell here about market structure.
And I don’t believe we should just accept high levels of inflation. I don’t believe in a long run Phillips curve. Ultimately you need micro-economic measures to avoid the attempt to maintain very high levels of employment ending in ACCELERATING inflation. You haven’t shown me why that isn’t the case with your simple the Fed is the agency of the devil story.
The ideal(ised) market story has a nice story to tell of how conflicts are resolved without power struggles. It is still worth telling the tale of why that doesn’t work – information assymetry, agency problems and market distortions. And how do we stop this conflict being about naked power in the end?
Ultimately, I wonder if you don’t have the wrong villain. (As an ex central banker, maybe I’m biased). Have you thought of going after managerialism (or if you like the Cult of the Manager) – say like Chris Dillow?
Obviously, there are inequities in wage differentials. What we see is that as corporate power eclipsed union power, real hourly wages have stagnated while profits soared. The Federal Reserve never bothers step in to hold asset inflation in check or to curb profits, but only when wages are increasing to help labor increase its share.
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