ALWAYS AND EVERYWHERE A FUNCTION OF WAGES:

But what are 'costs'? They are largely either wages and salaries, i.e. the great bulk of money incomes, or material costs, which do respond in relatively free markets to changes in demand. But wages and salaries are bargained, and are easier to raise than reduce. The main 'moral' force behind bargains is to sustain real incomes. Hence we generate a wage-cost-price-wage spiral, which works only upwards.

This 'structuralist' explanation sees inflation as the result of bargaining among three powerful groups in society managers who want profits, workers who want wages and salaries, and government which wants tax revenue from each. Structuralists see the stock of money as merely permissive, and changes in it in short periods as irrelevant.

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