Politics is trumping economics. It might end badly.

As we watch inflation spike to a pace not seen since the 1980s, experts are debating whether this phenomenon is worrying and long-term or benign and transitory. I’m not an economist, but as a student of history, I do wonder whether the return of inflation is part of a larger shift that has taken place across the world. To put it simply, for decades in country after country, economics trumped politics. But now, from China to Turkey to the United States, politics is trumping economics.

The conquest of inflation is one of the most far-reaching changes of our times. Countries used to think that they simply had to live with and manage escalating prices and wages. When inflationary trends got out of hand, they often had severe political consequences. Unlike unemployment, which affects just the small percentage of people who don’t have jobs, inflation affects everyone. And unlike unemployment, which shrinks what you might earn in the future (if you have a job), inflation shrinks what you have now by eroding the value of your savings. That’s why high inflation has been so often associated with political turmoil, from Germany in the 1920s to Iran in the 1970s to Latin America in the 1980s.

To read the full article, please click here.