Inflation is caused by too little capacity

Not too much money.

Cory Doctorow
7 min readJun 1, 2022


The classic WPA image of Black out-of-work people standing in a breadline in front of a billboard depicting a white family in a luxury car, captioned ‘World’s Highest Standard of Living…There’s no way like the American Way.’ The billboard’s image has been replaced with a picture of ruined, abandoned factories.

Inflation is here, and there are a lot of explanations for it. People who worry about the monetary supply — especially people in the deflation-loving cryptocurrency world — blame it on excessive money creation during the pandemic and uppity workers demanding higher wages:

Anti-monopolists blame inflation on price-gouging. This is a persuasive argument. After all, CEOs of companies in highly concentrated industries keep giving investor presentations where they chortle, rub their hands, twirl their mustaches, and announce that their profits are sky-high thanks to their ability to raise prices:

Some take a middle road and blame inflation on covid’s supply-chain shocks, or, translated into normal human speech: “China makes everything. China locks down every time there’s a covid outbreak. When that happens, China stops sending us stuff, which drives prices up”:

There’s a Russia/Ukraine version of this, too: “Russia exports a lot of gas. Ukraine exports a lot of wheat. Russia’s invasion of Ukraine triggered economic sanctions on Russia and disrupted farming in Ukraine, therefore prices of wheat and gas (and everything we make from wheat and gas) are going up”:

All of these can be true at once. The Trump administration’s decision to pump trillions into the capital markets definitely triggered massive asset inflation, including and especially inflation in shelter, with Wall Street landlords buying up houses and jacking up rents:

And yeah, the decision to centralize manufacturing in China, wheat production in Ukraine, and energy production in Russia means that when they stop exporting, other countries face shortages, which leads to bidding wars, which leads to…



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Cory Doctorow

Writer, blogger, activist. Blog:; Mailing list:; Mastodon: