July 3, 2022

Inflation and the Meaning of Anything

“With the real actors and mechanisms of inflation hidden from public view by language, those who truly fuel it are free to carry on the same policies in relative obscurity and little-noted infamy.” ~ Laura Williams

The language we use to describe things is part of a conceptual system for organizing our experience. The words and symbols we assign to things are arbitrary, and evolved from other structures of meaning. You might know the word “apple,” and it creates a mental image for you, without knowing why that combination of ink on paper, or spoken sounds, means what it does. You might not know “apple” has Germanic roots, and English shares cognates with German (Apfel), Dutch (appel), and Swedish (äpple). You wouldn’t recognize tofaa from Swahili, and you might not know the American Sign Language sign, but those certainly also refer to the concept you and I know as “apple.”

Layered on top of the sounds and symbols are cultural meanings. The image of an apple might signify health, freshness, or temptation, and now also is used to refer to a consumer technology company based in California. That’s a meaning “Apple” didn’t have before 1976, and it’s one of its most common associations today. 

Language helps us communicate because it identifies some aspect of our shared experience and gives us a way to conjure the concept in other minds. American rhetorical scholar Kenneth Burke said language “singles out a pattern of experience that is sufficiently representative of our social structure, and that recurs sufficiently often for people to ‘need a word for it’ and to adopt an attitude towards it.” We first observe the concept and then find some symbol that’s well enough understood by others to correspond to that concept. This is what children mean when they ask, “what is this called?” They are asking for a good-enough symbol that others around them will recognize, so they can refer to that thing in the future. If you teach them a word in a different language, it’s no more ‘right’ or ‘wrong,’ but it’s less useful, because people around them won’t know tofaa or manzana is a word for a familiar fruit.

Even within agree-to languages, we don’t have an “exact word” for anything at all. Your definition of a word and my definition are two circles of a Venn diagram, and they never line up precisely. The way we use words, individually in our vocabularies, and as a culture, is always changing. New layers of meaning are added or stripped away. We have inherited our use of language from the world around us, and we are modifying and evolving it as we pass it on. Words (and languages) are social conventions, and the ones we use, or don’t use, represent patterns of social conditioning. The meanings of words contain conditioned assumptions about how the world works. 

Political Control of Words

Kenneth Burke also identified our ‘need to adopt an attitude toward’ something as a reason that we assign words. Far more than we perceive, the words we use prepare us and prime us with motive. Referring to the “tax burden” invites you to lighten it. Calling something an “epidemic” urges us to find a cure. Talking about the “criminal justice system” presupposes both who will be involved, and what the outcome will be – and neither assumption is necessarily accurate. 

When we share our symbols (and they are ‘ours’ among all the competing languages and conceptual frames) we also pass on an interpretation of reality, and clues about how we should respond to or react to it. 

Control over the meaning of words is hotly contested, because various social groups consistently vie to infuse a concept with certain attitudes and actions. Many libertarians lament the loss of the word “liberal,” which has transitioned from “classical liberal” with its focus on individual liberty, to increasingly being used to describe state interventions. “Progressive,” too, has had its definition revised over time, and none of these definitions is inherently more accurate than any other. 

As a word-nerd who watches such trends, I was dismayed to see in the summer of 2020 major dictionaries quietly shift the definition of “anti-vaxxer” (first used in 2001 to describe people who opposed the use or questioned the effectiveness of vaccines against measles) extended to include people who oppose regulations mandating vaccination

This change to definition is a tool for silencing and discrediting certain political positions – specifically an insistence on bodily autonomy – by conflating it with a more fringe view. “Anti-vaxxer” is laden with two decades’ worth of antagonism against the likes of Jenny McCarthy, Andrew Wakefield, and others who see vaccines as more dangerous than the diseases they prevent, and who oppose vaccinating children against measles and polio. Conflating that falsifiable scientific claim (vaccines are a net negative for health) with a moral, political claim (the government shouldn’t force medical procedures on people) is disingenuous. But language doesn’t care. Usage creates meaning, and the shades of meaning shift without our consent.

The word vaccine itself evokes certain expectations, including prevention of illness and long-term protection. In 2020, when the world’s scientists and pharmaceutical companies were scrambling to create a “COVID vaccine” to roll out to the world, this was the definition most people expected the eventual shot to fulfill. But serious medical minds have always known that complete, lasting vaccination isn’t possible against SARS coronaviruses – they simply mutate too fast. For most people, the benefits of a flu shot still outweigh the risks – but to call it a vaccine is to rely on a slipperiness of language that borders on manipulative deception. And it was done deliberately to prepare the population for the desired action (getting the shot) by engaging those expectations of long-term protection. Whether that deception was ultimately necessary, and whether it is ethical to rhetorically deceive people “for their own good,” is very much in the eye of the beholder. Either way, the daily-use definitions of ‘vaccine’ and ‘anti-vaxx’ shifted a lot in a short period of time, and to serve particular political goals.

Redefining “Inflation”

We are currently watching the same phenomenon overtake the word “inflation.” 

“Price inflation” is used generally, especially in financial reporting, to describe an increase in the price of goods and services in the economy. Prices rise when demand outpaces supply, often caused by an increase in money growth or by a slowdown in production. The St. Louis Federal Reserve Bank summarized: “inflation is what happens when the money supply in an economy grows at a faster rate than the economy’s ability to produce goods and services.” During nearly two years of COVID-19 restrictions, shutdowns limited production and supply chains faltered. Stimulus spending and changed consumption habits fueled new demand. At the same time, the Federal Reserve vastly expanded the supply of money in the economy, and government spending surged. Inflation, measured by the consumer price index (CPI), now exceeds 7 percent per year. The average American household will pay $5,200 more this year to maintain the same standard of living as last year, according to a Bloomberg analysis

Economists once routinely used the word inflation to denote both a general increase in prices and an increase in the money supply, which causes prices to rise. Thanks to a kind of metaphor known as “metonymy,” we sometimes use the same word to refer to both the cause and the effect

An increase in money supply is a substantial, but partial, cause of price inflation. A more inclusive definition of inflation accounts for more factors, especially where the entanglement of low production (supply) and high spending (demand) makes it more difficult to identify specific causes in real time. An increased price for a specific good is also sometimes conflated with a general rise in prices economy-wide. 

Common parlance offers no ready replacement word for “inflation” as it was understood when the U.S. was on the gold standard: an increase in the quantity of money in circulation (as opposed to rising prices in general). That lack of linguistic specificity serves to obscure the mechanism and the actor; it becomes more difficult to talk about the specific kind of inflation caused by the Federal Reserve’s expansion of the money supply in the economy.

The metonymic inconsistency presents an opportunity for competing interests and political agendas to suggest alternative explanations, mechanisms, and actors. As consumer prices surged yet again in the first months of 2022, a concerted effort is being made in media and politics to rewrite the definition of inflation to be synonymous with corporate actors deliberately hiking prices to exploit consumers and garner record profits.

Apparently impossible-to-disgrace Robert Reich wrote in Salon, “inflation isn’t driving most of these price increases. Corporate power is driving them.”

Sen. Elizabeth Warren said: “We can’t overlook the role that concentrated corporate power has played in creating the conditions for price gouging.” 

Crucially, Sen Warren said this during a confirmation hearing for Federal Reserve Chairman Jerome Powell. The good Senator was in the room with an actor whose choices will massively impact the actual causes of inflation, and used that time to obscure the facts instead of holding power accountable. 

President Biden went so far as to attempt to negate a competing interpretation of inflation, saying, “I’m sick of this stuff! … The American people think the reason for inflation is the government spending more money. Simply. Not. True.”

A liberal political action committee called Fight Corporate Monopolies is crowing that “new polling shows messaging linking corporate greed to rising prices is highly effective,” and citing their own polls to indicate over 80 percent of respondents believe, “corporations are jacking up prices and passing higher costs to consumers while making record profits.” The frankness of the claim is almost refreshing: they know they are re-educating the population with rhetorical “messaging,” and make no claim that this new definition, widespread as it may be, bears any semblance of truth. 

Not by accident, these purveyors of intentional obfuscation have pushed such relabeling to serve a particular political agenda. Fight Corporate Monopolies, using their new – wrong – definitions of the actors and mechanisms of higher prices, suggests policy to combat inflation: “fair laws to keep prices low,” and “rein in corporate greed.” 

The change in the definition of the word sets up a new “attitude towards it,” and guides us toward certain actions which might be predicted to address the problem. To the extent that definition of the problem is wrong, our solutions are likely to make things worse. To the extent our language to discuss inflation is infused with assumptions about corporate actors and a sudden, widespread greed as causes, we forgo – and may in fact forget – the practical tools that could have addressed the economic pain.

A Problem Misstated

Educator John Dewey said, “A problem well stated is a problem half solved.” By the same principle, a problem badly stated, or a phenomenon redefined to obfuscate its true causes, is a problem nearly impossible to solve. After all, language is how we organize people to do things and solve problems. Burke explains this clearly: ““Action requires programs – programs require vocabulary. To act wisely, in concert, we must use many words. If we use the wrong words,” and so identify actors and causes inaccurately, “we obey false cues.” 

Redefining “inflation” influences our assumptions about how the world works, and what can be done differently. Language determines not only how we talk about things, but what we can talk about and be understood. Burke’s contemporary Benjamin Lee Whorf went further: “Language shapes the way we think, and determines what we can think about.” If we lose specificity in distinguishing concepts from one another, we impair our ability to speak about them distinctly or convey ideas clearly.

The goal of such political redefinition is to point outrage about inflation toward some specific cause, erasing the complex interplay of factors. If the redefinition is successful, policy proposals will be tilting at boardroom windmills and hunting C-suite monsters, who were never the driving actors of rising prices, anyway. Policy programs suggested by that revised interpretation, including price controls and digital fiat currencies, are almost guaranteed to multiply our economic woes.

Meanwhile, the true cause of inflation – creating vastly more dollars in an economy without an increase in goods to buy and sell – is swiftly being relegated to the realm of pedants. With the actors and mechanisms thus hidden from public view by language, those who truly fuel inflation are free to carry on the same policies in relative obscurity and little-noted infamy.

This article, Inflation and the Meaning of Anything, was originally published by the American Institute for Economic Research and appears here with permission. Please support their efforts.