[superbaconman]

Most commentators I hear point towards excessive spending as the primary cause of inflation, but I've been wondering: Absent supply chain interruptions, how does inflation manifest when price competition punishes the first one to raise prices?

[BurningFrog]

A simple way to think about it:

If everyone suddenly has twice as much money, suppliers will pretty soon run out of goods to sell if they don't raise their prices.

[wiredearp]

At this point I think we might as well admit that inflation is 100% caused by greed.

It's funny because all the theories presented in the article - that inflation is caused by mandatory minimum wage, government regulation and taxes - is exactly what a greedy person would suggest.

[tylersmith]

If the grocery stores all suddenly have 10x as many avocados people will pay less for them. The same is true for the grocery store that is buying money with avocados. Nobody considers consumers greedy for paying less when there's a surplus.

[wiredearp]

True, but the comment implied that people would buy 10x more avocados if their fortune tripled ten times and so a 10x price hike was needed to keep avocados in stock. This is not how eating habits work.

[BurningFrog]

So, under this theory, why did greed increase so much in 2021, after having been mostly dormant for 1-2 decades?

[wiredearp]

Inflation will also decrease the value of greedy peoples money, so what happened in 2021 was simply that greed got out of control. If you are greedy, the best way to fight inflation is to raise prices and collect more money. Once people stop bying things altogether, greed will dictate that prices come down. It's a lot simpler than what the article gives it credit for.

[BurningFrog]

Not quite sure, but I think you're saying greed didn't change, it just was "set free" for other reasons?

[wiredearp]

Yes. While we were discussing it, this guy wrote an article that sums it up pretty much perfectly: https://survivingtomorrow.org/inflation-is-soaring-get-ready...

Another hot take on inflation, I think, is https://eand.co/the-economys-crashing-because-we-re-an-indus...

[tylersmith]

I think if competition punishes a price raiser then the price raise was not due to inflation. If the price raise is due to inflation it shouldn't be possible to undercut (long term) because the value of the money itself has decreased.