The post-war period in advanced capitalist economies may be subdivided broadly into three: first, the so-called ‘Golden Age’ of Capitalism (or the Long Boom) up to the early 1970s, marked by strong growth but also tendencies for long-term price and wage inflation to accelerate; secondly, the stagflation period of the 1970s and much of the 1980s when long-term inflation, lower rates of growth and rising unemployment went hand in hand; and, thirdly, a stagnant but less inflationary period when the rates of growth of the ‘Golden Age’ period on the whole were not regained (though there were important exceptions in, for example, the USA) but rates of price and wage inflation were much lower.

Two seminal articles and one book – Rowthorn (1977; 1980), Marglin (1984a, 1984b) – attempted to provide a framework within which to discuss these episodes, bringing together theories of distribution and growth and developing the concept of conflict inflation. The latter concentrates on the power and/or class struggle between capital and labour. It suggests that sustained inflation may often be the means by which an uneasy truce is brought about between the two contenders, so that while neither attains their full aspirations yet the amounts by which they fall short of them do not tend to worsen over time. While Bob Rowthorn's elegant and influential (1977) paper clearly has priority over Marglin's contributions in this literature, we nevertheless follow Stephen Marglin's exposition and use his apparatus because it more obviously builds on important aspects of the framework that we have developed in earlier chapters.