ECONOMIC DISTRESS AND THE WAYS TO ALLEVIATE IT

The best way to help 'price-takers' is through the creation of a rights-based welfare state that provides a set of universal economic rights to all citizens on par with the Constitution

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F every social group's relative share in total output was inflexible downward, then the slightest attempt by any group to raise its share would push prices skyhigh. Inflation would be explosive despite there being no supply constraints. This, however, does not happen under capitalism, because the relative shares of some groups can be pushed down without arousing much resistance.

These groups are called 'price-takers'; their existence is what keeps inflation under control in a capitalist economy, though even they would not eliminate inflation if others continuously raise their shares.

An alternative way of keeping inflation restrained is through government intervention that protects price-takers by subsidising the costs of what they buy, and finances it by taxing those who raise their shares. This means keeping shares broadly unchanged after the impact of taxes and subsidies has been taken into account.