Inflation has disappeared because the class struggle is over

We illustrate our remarks, which are generic, with the case of France. When there was a class struggle (from the 1950s to the 1980s), wage earners were represented by strong trade unions and large left-wing political parties. These intermediar y bodies were in conflict with companies over income distribution, and conflicts ended in somewhat favourable compromises for wage earners thanks to their strong bargaining power. To rebalance income distribution in their favour, companies then used inflation, which was therefore a result of the class struggle or conflict over income distribution between powerful trade unions and political parties on the one hand and companies on the other. But to day, due to deunionisation, increased labour market flexibility, the demise of communist parties and deindustrialisation, there is no longer a class struggle and therefore no longer any inflation (in France or in the other OECD countries).