Gridflation? “Useful Idiots” and Shifting the Blame for Policy Failure

Recently, the coinage “greedflation” has often appeared in the mass media. It is a term combining the English word “greed,” meaning avarice, and “inflation,” meaning rising prices, and it conveys the idea that companies greedily raise prices, reap excessive profits, and thereby fuel inflation. In short, it claims that corporate greed is the cause of rising prices.

Yet the emergence of such coinages often does not accurately reflect the causes of economic reality, but rather conceals them and even carries the intention of shifting responsibility for policy failure. The same is true when existing terms continue to be used after only their true meaning has been distorted. The compound word “greedflation” also falls squarely into that category.

This term is known to have been first raised in June 2022 by the U.S. Democratic Party. At the time, as prices rose to their highest level in some 40 years, some Democrats reportedly invoked the term while criticizing the greed of large corporations for stoking inflation. President Joe Biden even criticized ExxonMobil, an oil company, for raising gasoline prices, saying it had “made more money than God last year.” In Korea as well, the term has recently been used frequently in connection with price increases by food manufacturers and restaurants. At the same time, media articles condemning corporate greed also appear regularly.

A few days ago, I saw a professor of criminal psychology mention this term on a TV program and say that “corporate greed causes inflation.” No matter how much our society may have come to make light of actual experts in a given field, and no matter how much public discourse may be dominated by the opinions of well-known personalities as though they were truth itself, one cannot help but think this has gone too far. If an expert in criminal psychology discusses economic problems or the causes of economic phenomena, and conversely an economics expert discusses criminal acts such as murder or robbery and the specific direction or methods of criminal investigation, and if such people’s remarks are naturally accepted as though they were truth and fact, then it would be difficult to call such a society one that is soundly and properly operated and maintained.

In fact, these so-called “know-it-alls,” whether they intend to or not, should at least realize that they are faithfully playing the role of what Lenin called “useful idiots.” To use the term “greedflation” and claim that corporate greed is responsible for the price surge is precisely to act as a “useful idiot,” unknowingly providing great help in achieving the objectives intended by the real authors of this inflation spike.

A slightly closer look makes it clear that the real cause of rising prices lies in the failure of government monetary policy and the resulting decline in the value of money. Unless the government increases the money supply, prices in general cannot rise across the board. Of course, even if the money supply remains unchanged and constant, the prices of some items may rise due to changes in supply and demand conditions. But in that case, the prices of some other items will fall—likewise because of changes in supply and demand conditions—so a general rise in overall prices cannot occur. Ultimately, the reason for the broad-based rise in prices that we currently call inflation is that the government printed and released large amounts of money.

That being the case, governments and politicians seek to conceal their own responsibility for causing a general rise in prices by expanding the money supply. Better still, from their perspective, would be to shift that responsibility onto someone else. The term “greedflation” serves that political need very well. In this way, “greedflation” is a kind of linguistic strategy that misleads people into believing that corporate greed is the cause of inflation. If one notes that this term was first raised by the ruling party in the United States at a time when inflation there was being described as the worst in decades, it becomes easier to understand why such a term was used. It allows those truly responsible for historically severe inflation to conceal their role, while also dragging companies into the issue, riding anti-business sentiment, and reaping political gains all at once. In that sense, “greedflation” is a coinage that kills two or even three birds with one stone.

The term “greedflation” is a politically distorted expression that obscures the responsibility of the government and political establishment—the real parties responsible for the price surge caused by failed monetary policy—and redirects both blame and public anger toward businesses. Such terminology is of no help at all in diagnosing economic reality or finding solutions. On the contrary, it merely conceals the truth and worsens the situation. What we need is not to denounce the ordinary profit-seeking behavior of businesses as greed, but to carefully consider, identify, and implement the right solutions related to monetary policy and the stability of the value of money.

Hyukchul Kwon, Director, Free Market Institute

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Original title: 그리드플레이션? '쓸모 있는 바보들'과 정책 실패의 책임 떠넘기기

Author: Hyeok-cheol Kwon

Date: 2025-05-14

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=column&pn=1&idx=27640