Erratum: “Differential” Should Be “Deferential”
For those on the right, there is no question that the Volcker disinflation was necessary—indeed, long delayed past its proper time. One of the charges that right-wingers leveled at social democracy was that it led people to expect that life would be easy, that there would be full employment, that jobs would be plentiful. This, in turn, encouraged workers to be insufficiently differential, and to demand too-high wages, spurring inflation, which kept profits too low to justify investment. And since it promised to reward even those who had not pleased previous employers with jobs, it undermined public virtue.
Erratum: “differential” should be “deferential”, as Ihor Gowda has pointed out to me.