Private Corporations Don’t Cause Price Inflation. Governments Do.

July 28, 2023

by Daniel Lacalle Mises.org

Interventionists always blame inflation on everything and anything except the only thing that makes aggregate prices rise: Issuing more units of currency than the real demand. Seller inflation is the same excuse and fallacy as cost-push inflation. A way to confuse citizens and assign causation to something that cannot make aggregate prices rise.

Let us debunk some myths. No corporation or conglomerate can make aggregate prices rise. Some neo-Keynesians blame corporations for price increases, but that makes no sense. If corporations were able to make aggregate prices rise, the United States would experience incessantly high rates of price inflation. On the other hand, corporations are the ones that lower prices faster because they can generate economies of scale, gain market share, and produce better goods and services at a lower cost using innovation and technology.