To Stem Inflation, The State Must Become An Alternative Provider Of Critical Goods And Services

Oz Zeren
8 min readMar 20, 2024
State must provide alternatives for critical goods and services (image licensed to author)

As a result of the pandemic and how it affected the economy, the working people were able to get some concessions from the system in the form of aid or salary increases. This led to their life standards getting higher temporarily.

Temporarily, because in the past few years, the free market did everything to take back the gains that the working people made during the COVID-19 pandemic.

All the companies that dominate the economy started raising their prices. At first, they blamed the price hikes on the crisis resulting from energy supply and logistics issues created by the Ukraine war. But as time went on, they kept raising their prices even as they posted record profits. Something that should not be possible if their costs were rising as they claimed as the significant increases in their costs that they claimed should have eaten into their profits. Some suspected that they were just gouging prices, and they were right:

Recent research found that 56% of the inflation in the past years was caused by corporations raising their prices without their costs rising.

‘Greedflation’ caused more than half of last year’s inflation surge, study finds, as corporate profits remain at all-time highs

Basically, in the last few years, the companies just raised their prices without having any reason to do it other than to maximize their profits. And they posted record profits as a result, despite the economic crisis affecting all the countries in the West.

As companies sucked away the gains that the working people made, US Federal Reserve, literally acting as an enemy of the public, declared that it was going to raise interest rates to bring down wages.

US Federal Reserve says its goal is ‘to get wages down’

Besieged from both sides, including the Fed chair appointed by their own government, the public saw their purchasing power dwindle at alarming rates. So much so that now food prices are the highest in the last 30 years.

It’s been more than 30 years since food ate up this much of Americans’ income

Housing is affected even worse — so much that 99% of Americans won’t be able to buy a house ever in their lives.

Homes “unaffordable” in 99% of nation for average American

Free Market Working Its Magic

The statistics show that the moment the working people made some gains, the ‘free market’ acted to take away all the progress that the working people made to maximize the profit of those who controlled the economy.

This was inevitable. Capitalism has profit maximization mechanics. Those who control the economy always seek to maximize its profits, and if anyone has any money that they can take, they immediately act to take that money away from them to hoard as profits.

In a way, the free market acts exactly like the ‘big government’ that is so reviled in libertarian literature, and actually, literally taxes everyone in the economy on every economic activity that they engage in to take away all the money that it can. Including taxing the food the people need for their survival.

There is no democratic process in this, no voting, no election, no elected representatives or appointed bureaucrats. It’s economic feudalism.

There is absolutely no reason for those who profit this way to stop doing it as long as they are allowed to do it and get away with it. They are profiting immensely, there are no consequences, if they don’t do it someone else will do it and profit, so why stop doing it?

It is folly to expect that sociopathic profiteers who maximize their profit by going to the extent of leaving people hungry, without healthcare, and without a roof over their heads would see reason or have pity and stop destroying society. They will continue doing it as long as they are allowed to.

So, We Must Not Allow Them

The society must not be left to the whims of private profiteers.

Every step that people take must not cost an arm and a leg.

Fundamental, existential needs like food, housing, and healthcare must not be tied to the whims of profiteers who want to maximize their gains at the cost of people’s lives and livelihoods.

Basic functions of the society that the society needs to provide to its members for the society itself to exist, must not be crippled by sociopaths for profit.

For society — including the actual sociopaths who profit from the economy — to prosper and reach new heights, it is fundamental that the level of civilizational infrastructure and amenities that we have reached must be preserved and improved.

Because everything will be built on what we have: People need to be able to eat food, have housing, and have an education so that the people who will work to make flying cars, space travel, and everything that we have been imagining since the last 100 years but still don’t have, become a reality.

This can not happen with a few highly educated people. Building ever more complex, ever more advanced societies is possible only by the next level of societal development getting built on a large, stable societal base that is solid from the bottom up. The ever-increasing specialized tasks and technologies cannot exist without a large societal base for them to be built on and sustained with.

The free market won’t do this. It doesn’t care. All that it cares about is maximizing its profits now, even if that causes society to collapse 5 years later. What happens after that is “someone else’s problem” — a delusional proposition.

Regulating these, price-ceilings, neoliberal economic circus acts, and make-believe won’t fix this. There is no way to make sociopathic profiteers take into account the well-being of others, leaving aside the society. They will find a way to circumvent everything and break all the rules if need be. Such measures were tried in the past in many different places, and they did not work. We are in this state despite all these efforts.

The only method that worked to address this problem has been state-funded alternatives whenever they were tried.

The Solution Is State Provided Societal Infrastructure

Everything vital to the survival and well-being of the people and the society must have state-provided cheap or free alternatives.

The state can provide these at no cost or minimal cost depending on how vital the good or service in question is.

It can be provided at no cost at the point of service, being funded by taxes elsewhere if the good or service is vital. And it can be provided with low cost or even a small profit margin if the good or service is not so critical.

We already do this with things like the military, police, judiciary, and even the transport infrastructure. These are fundamental services that nobody sane would ever attempt to privatize. Nobody sane would ever imagine a privatized military or police. A privatized judiciary sounds as crazy as those as well.

Food, housing, education, healthcare, and similar fundamental resources and services are similarly critical to the existence and well-being of society. They also must have government-supplied alternatives at no cost or low cost. These alternatives can easily keep prices in check and prevent corporate profiteering, controlling inflation as a result.

Moreover, these government-provided alternatives will not only ensure that everyone in the society gets the fundamental resources and services they need to contribute to society, but also they will increase the resilience of the society and the economy against crises, war, and cataclysms.

Additionally, they can subsidize and support the most fundamental sectors that are critical to the health of any economy — farming, construction, education, medical sectors, and many more.

The profiteering companies cannot raise their prices without any reason as the government-provided alternatives for goods/services not only provide a price benchmark at any given point but also make it infeasible to price gouge.

This format will provide stability in society as well as provide a solid base for building the next level of human civilization. Moreover, it will allow the working majority to raise their life standards by preventing their economic gains from getting taken by corporate profiteers.

Proposing this may immediately trigger various false propositions that those who oppose the prevention of profiteering use to fight back. However, all of these are invalid arguments:

“But government can’t do anything good”

The government can’t do anything good because private profiteers prevent it from doing anything. They only allow things that are (currently) infeasible and unprofitable for them — like the military, judiciary, police, or the transportation infrastructure. And the government does these pretty ok by all standards.

“It would prevent competition”

There isn’t any competition now. All the corporations raised their prices. The shareholder mechanics of late-stage capitalism make sure that all big players have shares in every company and there is no need for any competition. When prices rise across the economy, all the majority shareholders benefit.

Moreover, if a private company wants to compete with the government on a government-provided good/service it can always do so.

But nobody can compete with the government on cost — they can fund costs with taxes

No government can be able to fund everything perpetually with taxes and it would go bankrupt. Moreover, all the major corporations today already have minimized their costs and they are actually working on minimal costs. The immense difference between the costs and the prices is going to the coffers of private, unaccountable sociopaths as an economy tax.

But this would cause goods/services to be low quality at low cost

If a private company can’t win in a market for critical good/service with quality, and if the low-cost, ‘low-quality’ good/service that the government provides is enough for the majority, then it means that the one that the government provides is good enough but the ‘quality’ that the private corporation provides is not good enough for the public to spend money on it.

But this would give too much power to the government

If having the government handle the military, judiciary, police, and transport infrastructure is not giving it too much power, having it handle other critical societal infrastructure is not so either.

Leaving critical things like food, housing, education and the like to the control of private feudal lords is as crazy as leaving the military, the police, and justice to the same private feudal lords and allowing them to provide those services only to those who can afford it.

This Is The Best Way

The state must provide alternatives for all the goods and services that are critical to the existence and well-being of the people and the society.

This is the only way in which private initiative can exist without destroying the society from within for profit.

This is how we address the ills of the current system and prevent it from destroying everything to maximize its short-term profit to increase unusable hoards of numeric wealth of private profiteers. This is how we prevent people from starving in the middle of the richest societies. This is how we prevent people from being homeless while working two jobs.

This is the way to have stable, strong societies that can be the basis for taking humanity to higher levels of civilization.

Such societies will be the framework that the 21st-century civilization will be built on.

--

--

Oz Zeren

Writing for a better future. I work in Tech. I like Philosophy, History, Computers, Gaming, the Internet. I’m excited about the Creator Economy, Web 3.0, DAOs.