Some Concluding Policy Perspectives

It may seem disingenuous to close a book on conflict inflation with a discussion of policy problems and recommendations. After all, one of the main lessons of the conflict approach - as applied in the foregoing chapters - is that controlling inflation is not just a matter of technical manipulation of fiscal and monetary instruments, but also hinges upon the degree of (implicit or explicit) distributional consensus among the major income claimants. Moreover, the factors determining the feasibility of consensus themselves go far beyond the purely technical realm insofar as the degree of conflict versus consensus is an endogenous outcome of socio-economic and political struggles among classes and other major groups in the private and public sectors. Indeed, the experiences of post-World War I Germany, the Latin American countries, and the Western European economies all suggest that attempts to stabilize the price level solely on the basis of such pro forma devices as exchange rate pegs, wage/price freezes and/or indexation, and external enforcement schemes are doomed to failure in the long run insofar as they do not cope with the socio-economic underpinning of conflicting income claims.