Pricing Power

When an inflation regime shifts, there’s only one question that really matters for your business model: do you have pricing power?

With apologies to the Monty Python troupe, I want to write about three forms of pricing power that often go unnoticed, but will be incredibly powerful as the great economic pendulum swings from deflation, falling rates and a wealth creation zeitgeist to inflation, rising rates and a wealth distribution zeitgeist.

Because if you don’t see that this is where we’re going – a sea change reversal of the supply-side narrative that dominated our political zeitgeist for the past 35 years, now becoming the MMT narrative that will dominate our political zeitgeist for the next 35 years – then you’re just not paying attention.

I think that both supply-side economics and MMT economics are BS “theories”, no more than post hoc rationalizations of the preferred policies of the Nudging Oligarchy in the former and the preferred policies of the Nudging State in the latter. I think that supply-side policies have been a disaster for anyone who values justice and an equality of opportunity, just as I think that MMT policies will be a disaster for anyone who values justice and a liberty of mind.

But what I think and $2.75 will get you a subway token.

These are the cards we’ve been dealt. Let’s play them as well as we can.

Pricing Power #1 – Client Ownership

Willie Sutton famously said that he robbed banks because that’s where the money is, and the same thing goes for business models when inflation expectations shift (in either direction) – you need to go where the money is.

Put more directly, I mean that you need to get closer to the end client – whoever is spending the money that drives your business ecosystem – even if that means getting farther away from developing the products or services that your business ecosystem is known for.

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