The Cost of Living Crisis:

by Costas Lapavitsas, James Meadway, Doug Nicholls

A myth-busting pamphlet that charts a course out of the current cost of living crisis, focusing on Britain's current economic situation

We are living through a cost of living crisis, with interest rate hikes and the prices of everyday consumables and energy bills sky-rocketing. Why is this happening?

Sometimes we are told that wages are too high, or that the government has "printed" too much money or that events far away, such as the war in Ukraine, are solely to blame. The plain argument that high prices go together with high profits, falling wages, and weak production is often distorted and hidden by mainstream commentary in the media and elsewhere.

This plain-speaking pamphlet tells it the big businesses dominating production and distribution make huge profits out of high inflation, while working people lose out. It sets out factual evidence to illustrate that the source of record profits is the fall in real wages as inflation rises.

A large part of the income of working people is being transferred directly into the profits of big business. The pamphlet shows that the deeper roots of the "cost of living crisis" lie in the very low investment and poor productivity growth for many years. The basic steps to resolving the crisis are prices, especially of essentials, must be brought down, and wages, salaries, benefits, and pensions must be increased.

Genres: Nonfiction, Economics, Politics

80 pages, Paperback

Published June 6, 2023

Reviews

[Brecht Rogissart]

Surprisingly good summary of the greedflation debate in only 62 (small) pages. Summarizes and criticizes alternative theories in a fair but harsh way.

[Nakedfartbarfer · Rating 4 out of 5]

A short economic book so clear & incisive that even I could understand it. It demolishes the usual flimsy arguments about there being too much money in circulation, and a bunch of other ruinous Milton Friedman-isms that were coined in the service of neolib austerity. If you’re even reading this book, you’ll likely be familiar with the conclusions here, but it’s the methods of inquiry & inductive reasoning that make these verdicts feel less like moral judgments than stolid science.

The authors are from the UK and make their arguments from there, but it’s reasonable to extrapolate elsewhere. They make the argument that price controls on essentials like food & energy oughta be instituted, on top of increasing investment in the domestic supply of these things, pointing out the obvious exposure risks of outsourcing a portion of everything but gig work & financial services beyond the Suez Canal.

Central banks should be brought under democratic control. The destructive profit motives on these things cannot be curbed via incentives or reasoning. Manipulation of interest rates, while capable of curbing inflation *in theory*, is wielded foremost to protect the profits of private banks.

The book is very clear that anything that has ever benefited the people who work for a living only gets done by the weaponization of labor against capital in the usual ways: strikes and mass non-payment campaigns of taxes & rate hikes.

[Ashley · Rating 4 out of 5]

A very clear and accessible little essay. It highlights the root of the problems we are facing, vs. what we are made to believe is the root of the problems we are facing (i.e., the war in Ukraine, the Covid-19 pandemic, etc.). It focuses on the economic woes of the U.K., but is still applicable to other countries experiencing a cost of living crisis, of which there are, unfortunately, many. Canada is certainly part of this dismal club (the city of Toronto taking the cake), and I found there was a lot to relate to among these pages.

A very concise and much-needed analysis of what is happening today. Put this little book in the time capsule to be unearthed 50 years from now, so we can remember this very specific moment in history.

Bought from the London Review bookshop in May 2022

[KT · Rating 3 out of 5]

An informative, easy-to-read primer on the cost of living crisis in the UK that puts to rest the myths that too much money is circulating in the UK economy and that wages are too high; rather profits are too high and a shift in the balance of power from the workplace to the worker is needed to address the underlying problems at the root of the crisis

[Rob M · Rating 5 out of 5]

This short pamphlet is well worth a read even if you understand the subject fairly well, if only for the clarity with which is lays out the explanations, arguments, and programmatic recommendations.

If you don't understand the subject well, its well worth a read for exactly the same reasons.

The text begins with a bit of an explanation of common economic terms you're likely to hear on the news. The central passage attacks right wing arguments for wage restraint as the solution to inflation, and instead offers an alternative explanation in the form of underinvestment and profiteering. The final section outlines what should be the key planks of a progressive economic programme.

A useful and timely political education resource. I'd particularly recommend this to trade union reps and branch secretaries looking for sharp, intelligible economic analysis for use in workplace level discussions and debates.

[Mick Harvey · Rating 4 out of 5]

Useful and pithy primer on the recent inflationary period in the UK, largely coming from a pretty orthodox marxist perspective. Some of the conclusions might be a little glib (workers ally with small businesses?) but valuable nonetheless.

[Donald Reid · Rating 5 out of 5]

Cogently explains the endemic weakness of the British economy (for most people) and busts the myths which sustain policies designed to concentrate power and wealth for the few.

[Stu Napier · Rating 4 out of 5]

Quick read but helpful in simplifying the confusing world of economics. Should be required reading for all in the UK at this time of crisis

[Nicholas Driscoll · Rating 5 out of 5]

This was a very readable and succinct account of the current cost of living crisis facing the UK. It arguments for both the causes and policies to address the issue are persuasive.

[Jeremi Miller · Rating 5 out of 5]

That’s the guide to inflation we all need to read. Brilliant.

[Reader · Rating 4 out of 5]

Very good book, simple informative and short. Sort of mass economics that should be made.

[Ester Perez-Sala · Rating 3 out of 5]

Subjective with a very left-wing perspective, but a concise read with interesting opinions about the UK’s cost of living crisis as long as it’s not taken as the one and only truth.