Source: Foundation for Economic Education
by Patrick Carroll
“Reich begins by raising and immediately dismissing two common explanations for inflation: wage increases and government spending. It would have been nice if he had actually explained what these theories say and where he thinks they go wrong. But instead, he effectively says, ‘They’re wrong because this other theory (concentration) is right.’ Even if he’s correct about corporate concentration being an important factor behind inflation, that’s not much of a rebuttal. Briefly, then, the wage-increase theory says that when wages go up — perhaps because of union pressure — employers respond by passing the higher costs on to consumers in the form of higher prices. Thus, wage increases result in price inflation. As it happens, Reich is correct to call this particular explanation a myth.” (01/29/25)
https://fee.org/articles/responding-to-reich-part-9-the-corporate-concentration-theory-of-inflation/