<strong><a href="https://twitter.com/blair_fix">Blair Fix</a> is a political economist from Toronto, Canada. He spends his time thinking about the future of humanity and how we can create economics that's relevant to the real world. He is a researcher who publishes peer reviewed journal articles and also writes for a popular audience on his blog, <a href="https://economicsfromthetopdown.com/">Economics from the Top Down</a>.</strong>

<strong><a href="https://twitter.com/joshlevent">Josh Levent</a> is a designer, hacker, and thinker from Bern, Switzerland. Aside from teaching and research at the Bern University of Applied Science, he is trying to figure out how things "really" work.</strong>

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<span style="font-weight: 400">Talk of inflation is everywhere at the moment. Most countries are reporting higher-than-usual levels of</span> <a href="https://tradingeconomics.com/country-list/inflation-rate?continent=world"><span style="font-weight: 400">inflation</span></a><span style="font-weight: 400">.</span>

<span style="font-weight: 400">But the headline numbers hide a dirty secret. The prices used to calculate inflation vary a lot between different commodities. In fact, this variance is often larger than the rate of "inflation" itself. Noting this feature, political economists Jonathan Nitzan and Shimshon Bichler observe:</span>
<p style="padding-left: 40px"><span style="font-weight: 400"><em>Inflation certainly involves a rise in the average price of commodities; but that is like saying that the average outcome of a game between two basketball teams is always a draw: one team’s win is another’s loss.</em> (</span><a href="https://blairfix.github.io/capital_as_power/depth.html#neutrality"><span style="font-weight: 400">Nitzan &amp; Bichler</span></a><span style="font-weight: 400">)</span></p>
<span style="font-weight: 400">In</span> <a href="https://economicsfromthetopdown.com/2021/11/24/the-truth-about-inflation/"><span style="font-weight: 400">The Truth About Inflation</span></a><span style="font-weight: 400">, Blair reveals (with helpful graphics) the absurdity of relying on a single indicator of inflation. He points out that in about 100 years of data on US CPI inflation, the average rate is 2.8%, but the average standard deviation (between the price change of different commodities) is 5.2%.*</span>

<span style="font-weight: 400">There are two things happening here. First, the COVID-19 pandemic has caused many supply-chain shortages, which have led to price increases. Second, (and perhaps more importantly), when inflation starts to rear its head, companies raise prices to bolster profits. In the United States, it appears that inflation has systematically benefited large corporations. </span>

<strong>In this SuperSalon, we will talk about inflation. We will talk about how to measure it, the differential price changes that make it up, where it comes from, and what its effects might be.</strong>

<span style="font-weight: 400">But we will also talk about economics as ideology. As Blair points out in ‘The Truth About Inflation’, there are signs that orthodox economics is not much of a science. If the credibility crisis in psychology is anything to go by, economics has a rude awakening ahead of it.</span>

<span style="font-weight: 400">But aside from the issue of models failing to fit the real world, creeping instrumentalisation has hemmed in theory development. In economics, as in other sciences, the "shut up and calculate" crowd has gained strength. As mathematics and computing advance there is a growing variety of ways to apply mathematical methods. This has some benefits, but if theory development doesn't keep apace, we risk pursuing irrelevant details and missing important ones.</span>
<ul>
 	<li><span style="font-weight: 400">But what could a good science of economics actually look like?</span></li>
 	<li><span style="font-weight: 400">Who is developing new theories that can explain economic phenomena?</span></li>
 	<li><span style="font-weight: 400">And, to close the circle, should you  believe official inflation numbers?</span></li>
</ul>
<strong>Join us, to discuss these questions and more, in this exciting SuperSalon on inflation, economics, and how we explain the world around us.</strong>

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<span style="font-weight: 400">* This is actually quite a generous comparison, since a standard deviation on either side of the data contains 68% of the samples. So the mean and standard deviation here tell us that 68% of the component price changes were between -2.4% and 8%. That is to say, that even while the average prices have increased, a substantial number of things have decreased in price.</span>

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<h3></h3>
<h3>Reading List</h3>
<a href="https://economicsfromthetopdown.com/2021/11/24/the-truth-about-inflation/"><span style="font-weight: 400">The Truth About Inflation – Economics from the Top Down</span></a>

<a href="https://www.washingtonpost.com/outlook/2021/05/25/what-scaremongering-about-inflation-gets-wrong/"><span style="font-weight: 400">Opinion | What scaremongering about inflation gets wrong - The Washington Post (washingtonpost.com)</span></a>

<a href="https://www.nytimes.com/2021/12/16/opinion/inflation-economy-2021.html"><span style="font-weight: 400">Opinion | The Year of Inflation Infamy - The New York Times (nytimes.com)</span></a><span style="font-weight: 400"> (block the nytimes.com cookies if you see a paywall)</span>

<a href="https://blairfix.github.io/capital_as_power/depth.html#neutrality"><span style="font-weight: 400">16 Depth &gt; Neutrality | CAPITAL AS POWER (blairfix.github.io)</span></a>

<a href="https://qz.com/2153852/inflation-rates-are-rising-around-the-world/"><span style="font-weight: 400">Inflation rates are rising around the world — Quartz (qz.com)</span></a>

<a href="https://www.ineteconomics.org/perspectives/blog/how-economics-forgot-its-subject-matter"><span style="font-weight: 400">How Economics Found Science …and Lost its Subject Matter | Institute for New Economic Thinking (ineteconomics.org)</span></a>

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Photo by <a href="https://unsplash.com/@knuknuk?utm_source=unsplash&amp;utm_medium=referral&amp;utm_content=creditCopyText">Sean Robertson</a> on <a href="https://unsplash.com/s/photos/inflation?utm_source=unsplash&amp;utm_medium=referral&amp;utm_content=creditCopyText">Unsplash</a>

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