Rising prices were nothing more than “taxation without legislation” according to the economist Milton Friedman, then only recently in receipt of the Nobel Prize, and it was “the worst kind of revolution” according to the German novelist Thomas Mann, another Nobel Prize winner.
Across politics, academics and the arts there was a widespread view that price stability was integral to political and social stability. Even the Labour Party, and the Left everywhere, paid at least lip service to that. Everyone recognised that it had to be defeated.
And today? The silence is deafening. The only comment from the Prime Minister on the subject is a remark from last year that fears of inflation were “unfounded” (heck, if only!).
The Chancellor Rishi Sunak has confined himself to a few muttered remarks about how it will put pressure on debt repayments.
As for President Biden, when a Fox News reporter pressed him on rising prices he was dismissed as “a stupid son of a bitch”, while an NBC anchor was labelled a “wise guy” for even raising the issue.
The President blithely assures everyone it is simply transitory, and will come down soon.
Meanwhile, major news outlets such as the Washington Post have run pieces arguing for “Boomflation”, letting prices rip to preserve the recovery – good luck with that, guys – while an ultra-Keynesian academic consensus that largely stoked inflation by persuading governments to increase stimulus spending even as supply chains closed down maintains an embarrassed silence, seemingly unable to process the fact it has made a catastrophic error of judgment.
When the occasional voice pops up to argue a different point of view – such as the Governor of the Bank of England Andrew Bailey pointing out that wage restraint might be necessary – they are immediately shot down in flames. The idea that we might need to make some sacrifices to deal with this is still completely off-limits.
And yet it is surely that clear that, just as in the 1980s, bringing inflation back under control will be painful. It may mean falling real wages for a couple of years, cuts to public spending, and higher debt repayments, both for the Government, and for anyone who has a mortgage on their home.
The trouble is, no one is preparing people for that. No one under 50 is likely to have any real memory of what bringing prices down feels like. It is stuff from barely remembered history books. When it happens, it is going to come as a complete shock.
It would be far better if we tackled inflation early, and before it gets to the double-digit levels where it does real harm both to the economy, and to the stability of society more widely.
And yet that would require taking some tough decisions right now, and it would need prime ministers, presidents, finance ministers, central bankers, and indeed academics and writers, to make the case that some small amount of pain now is better than a lot of trouble in two years’ time.
There would surely be an audience for that among the electorate.
Voters are not stupid, they can see prices going up, they can sense that living standards are about to be squeezed, and they would be willing to listen to the argument that we need to tighten our belts now.
But a woeful generation of leaders, in the UK, in the US, and across Europe, simply doesn’t have the courage to make the case in the way that an earlier generation was willing to – and the consequence will be that we don’t do anything to tackle inflation until it is too late, and that when we finally have to confront it, it will be far more painful.
