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Dr Sarun George Sunny
The Way I See It • 21d
Inflation isn’t purely caused by capitalism, but capitalism can influence it in different ways. In capitalist economies, things like profit-seeking, easy credit, and supply-demand swings can push prices up but inflation happens in almost every kind of economic system. I am giving you some examples of different countries. High-inflation countries like Venezuela or Zimbabwe didn’t get there just because of capitalism. Political instability, bad monetary policies, collapsing currencies, and sometimes war played the main role. Weak institutions, not capitalism itself, caused most of the problem. But take example of Low-inflation countries like Japan and Switzerland are capitalist too, yet they keep inflation very low. Strong institutions, careful monetary policies, and low debt help keep prices stable. So it’s misleading to blame capitalism alone. Sure, capitalism can make inflation worse if credit runs wild or big companies manipulate prices thorough crony capitalism but good governance and smart economic policies of the Government can keep it under control. At the end of the day, inflation is as much about policy and institutions as it is about the economic system.
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