Random Thoughts, 24a, Why Is Inflation?

A strangely couched phrase, for a complicated subject. During WW 2, I used to laugh when I read that Montgomery said he was a simple soldier, he was about as simple as a Chubb lock. I, on the other hand, am a simple fellow, who, when he is not on top of a subject, goes back to first principles. I’m not a accountant, and I am not an economist, and perhaps that is why I don’t understand inflation. When I was a boy the pound sterling could be broken down into 960 farthings, so a small boy, at the school gate could buy any number of sweets for a farthing, At the time the average labouring wage was about three pounds a week. At the end of WW2 the average labouring wage was little, if any more, In 1950, I at 28, with a wife and two children, and a university degree, earned five pounds a week. So how was it in all those years there was so little change if any. Certainly there was no great development, the War had seen to that. Since then we have had mass production, mechanisation, stack ’em high and sell ’em cheap, imports at unbelievably, impossibly cheap prices, when you take into account transportation, and profits at either end. So I wonder why, the basic wage today, at say, £150 a week, is 50 times higher, in a lapse of 60 years, when the rise was zero in 20 years, and everything is theoretically so much cheaper. Assuming that taxes are proportional to wages, that government purchase equates to costs in the high Street, where is all this extra money going? .True, in those dark old days, we didn’t have a health service, or the plethora of viruses and germs we have today, of course a lot of us had TB, but perhaps we didn’t know enough about getting sick, we hadn’t all those germ advertisements. Only a few of the middle-class bought their own houses, the rest, and the working-class rented houses that had been handed down since Victorian times. Our pleasures, simple, by today’s standards, almost childish, kept us amused. We did have railway trains which ran on time, carried vast quantities of materials, and people into the nether reaches of the country, that’s gone, maybe its transport charge? I cannot think of a valid reason why inflation should still be with us, it should be deflation, because costs appear to have come down over the years.

This diatribe started because I was looking at the plight of the prison staff and failed to understand the reasoning that had brought it about. I assume the government, annually bases its taxation partially on the current cost of living, and sets a figure that I often think is arbitrary, as being the rise in inflation. If government employees, or any employees come to that, have their wages assessed annually by whatever company they are paid by, inflation is naturally, or should naturally be taken into account on the same basis – annually, not piecemeal. Once the rate has been set, it is an indication that the level of inflation has risen to that point, so I fail to see any justification for adjusting the wage other than by the set level and paid on a weekly or monthly basis in those moieties. I suspect it is because we have central government now, with a vast wage bill, due to overstaffing in many cases, that some crank has put forward the proposition that if the cost of living increase is provided in increments, it will save money, which of course is true, but could be construed as theft, and the wage bill would not appear so large. I can not believe that! It doesn’t make sense, we’re talking about a 1% integer. The fact that it is unreasonable in the true sense of unreasonable, contrary to reason, or even that the judges have upheld it, doesn’t alter the fact that it doesn’t make sense and is totally unfair, so there must be a more devious reason for this action. I am not necessarily on the side of the prison officers, as I don’t know enough about their situation vis a vi the employer, I just think on basic principle the whole thing is extremely odd. Perhaps it is a toehold to introduce another system of assessing and paying the increase in the cost of living – after all it would affect wages, pensions, benefit, and think what the monthly bill is for that lot!

Categorized as General

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