With inflation running at levels not seen in at least a decade, many on the right are arguing — as they did back in the 1970s — that the problem lies with greedy workers arguing for wage increases in line with inflation.

If workers were not able to demand higher wages, the argument goes, the increase in inflation we’re seeing at the moment would be a one-off spike resulting from higher energy prices and supply chain issues. Instead, they argue, we’re on the verge of a “wage-price spiral” in which workers demand higher wages to compensate for rising inflation, which in turn drives up inflation.

The governor of the Bank of England, Andrew Bailey, drew fire last week for appearing to back such an argument when he made the case for wage restraint, pleading with British workers not to demand wage increases. Not only was this deeply hypocritical — Bailey earns more than half a million pounds a year — it was also economically nonsensical, as everyone from the head of the free market IFS to trade unionists were keen to point out.

But Bailey is not the only one making the case for the “wage-price spiral” argument. Free market think tanks and media organizations have been pushing this narrative for several years now. Last year Labour MP Wes Streeting cited research from the Adam Smith Institute suggesting that inflation was being driven by a “wage-price spiral,” and the Wall Street Journal has  recently taken a similar line.

The Financial Times has taken a more nuanced view, pointing out that wage pressures have “so far been concentrated in sectors with acute shortages,” while “falling flat” in other sectors. But the FT warns that, “even if pay is lagging behind prices, it is still rising fast enough to keep inflation above target.”

These arguments are all posed in the neutral- and objective-sounding language of academic economics but they are, in fact, highly political. When policymakers argue that workers are the ones driving inflation, they are preparing the ground for interventions that force workers to pay for that inflation.

It is very obvious that wages are not being driven by greedy, militant unionists pushing their helpless bosses to provide wage increases that they simply can’t afford. Such a situation has only ever obtained in the imagination of capital, and it certainly doesn’t fit the facts today.

Recent research from the Trades Union Congress (TUC) shows that real earnings have fallen by 1.8 percent on last year — the worst decline for eight years. And remember, this comes on the back of a decade of wage stagnation that followed the financial crisis.

Working people are being squeezed between stagnant wages and rising prices. The result is that many of the poorest people in our society are struggling to get by. Just a few days after writing that wage increases might be hurting the recovery, the FT published a story noting that nearly 5 million people in the UK are currently struggling to feed themselves as a result of rising living costs.

These pressures are less acute for wealthier households for a number of reasons. First, professional workers have greater bargaining power and are often able to argue for wage increases where blue collar workers are not. Second, they will take less of a hit from rising food and fuel prices because they spend a lower proportion of their incomes on these goods.

And finally, these households will be sitting on some — often substantial — wealth. Much of this wealth will be invested in assets like property and shares that have increased in value over the course of the pandemic, almost entirely as a result of central bank asset purchasing programs.

While the value of this wealth may be eroded somewhat by rising inflation, central banks are likely to begin increasing interest rates to offset this change, which will stabilize returns on investment for the wealthy while further eroding the disposable incomes of indebted households. Bear in mind that a third of UK households are already struggling to pay their bills, and over 4 million of them have been forced to borrow simply to make ends meet.

Socialists should see the “wage-price spiral” argument for what it is: an attempt to force workers to pay for problems caused by capital. After all, the global economy would not be in this position had states and corporations recognized the threat posed by climate breakdown and pushed for more rapid de-carbonization, reducing our dependence on fossil fuels, years ago.

Instead of forcing working people to pay for the pandemic, just as they were forced to pay for the recklessness of the finance sector after the crisis of 2008, those with the greatest means should pick up the tab.

As Oxfam noted in a report last month, the world’s richest ten men doubled their fortunes during the pandemic while the incomes of 99 percent of the world’s population fell. Meanwhile the fossil fuel companies that caused this crisis in the first place by standing in the way of decarbonization have been raking it in: BP, Chevron, and Exxon Mobil have seen profits reach eight-year highs. Rather than investing in transitioning to renewable energy, they’re dishing this money out to wealthy shareholders.

The last time the wage-price spiral argument was being pushed in the way it is today was in the 1970s. At that time, many socialists acceded to this interpretation of events, and in doing so they paved the way for the all-out assault on the labor movement that followed. We can’t let the same thing happen again today.