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In 2023, Société Générale strategist Albert Edwards warned that corporate price increases during the post-pandemic inflation surge could undermine public confidence in capitalism. His warning was conditional—not evidence that capitalism was about to end—and economists disagree about how much changing corporate margins or markups contributed to inflation.
What did Albert Edwards mean by “the end of greedflation”?
Edwards argued that some companies had used the pandemic and Russia’s war in Ukraine as cover to raise prices and expand margins. He called the alleged pattern “greedflation.” In a strategist note reported by Fortune, he wrote: “The end of Greedflation must surely come. Otherwise, we may be looking at the end of capitalism.”
The argument linked elevated corporate margins with households facing persistent inflation. Edwards warned that if people saw companies as profiting at consumers’ expense, anger could fuel social unrest and weaken the economic system’s legitimacy. The Futurism article published April 7, 2023 rendered that conditional warning as “Economist Warns That Capitalism May Be Ending.” It was a prediction about a possible risk, not a finding that capitalism’s end was imminent.
Fortune also reported Edwards saying, “This is a big issue for policymakers that simply cannot be ignored any longer.” He proposed price controls as a response; that was his policy position, not a remedy established by the evidence cited here.
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Why rising profits do not by themselves prove greedflation
Three claims need to be kept separate: prices rose, profits rose, and higher profits caused inflation. Evidence for one does not automatically establish the others. A margin is a ratio, and its movement can reflect changes in revenue, costs, interest expense, or other factors. A markup measure asks a different question about prices relative to costs. Results also depend on the industries, time period, and cost adjustments included.
Two Federal Reserve analyses illustrate why the explanation is contested. A Board of Governors note tracked one measure of nonfinancial corporate profits relative to gross value added. It estimated that the measure rose from about 13% in 2019 Q4 to about 19% in 2021 Q2, then fell to about 15% in 2022 Q4. The authors attributed much of the rise to government intervention and lower net interest expenses; after adjusting for those factors, they said margins appeared near pre-pandemic levels by the end of 2022. These figures describe U.S. nonfinancial corporations under that measure, not all businesses worldwide. The Federal Reserve Board note explains its analysis.
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A separate Richmond Fed brief examined price-cost markups and concluded that changes in markups contributed little to inflation. That finding addresses markups’ contribution to price increases; it is not the same as saying corporate profits did not rise. The Richmond Fed brief sets out that analysis.
Taken together, these sources show why an elevated aggregate margin and a small estimated markup contribution to inflation are not contradictory: they measure different things and answer different questions. They do not settle whether profiteering drove inflation across every sector or country.
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1Clear out junk files and repair common Windows errors2Fix the driver behind crashes, sound loss and screen glitches3Repair Windows errors before they cause bigger problemsWhat the headline profit figures do—and do not—show
Two other figures from 2023 refer to different populations and measures. They should not be combined as if they described the same set of companies or the same economic statistic.
| Figure | What it covers | How to interpret it |
|---|---|---|
| $1.8 trillion in profit on $16.1 trillion in revenue | Combined 2022 results for the Fortune 500, as reported by Fortune in 2023. | A figure for the ranked companies, not all U.S. firms or the entire economy. Fortune’s report provides the context. |
| $151.1 billion decrease in U.S. profits from current production in 2023 Q1, including a $109.3 billion decrease for domestic nonfinancial corporations | Bureau of Economic Analysis second estimate, released in May 2023. | A historical estimate for that quarter and release vintage, not a current-quarter figure. The BEA release gives the details. |
The Fortune 500 total is a company-ranking statistic; the BEA figure is a national-accounts measure of profits from current production. Their different coverage and definitions mean neither can be used as a direct check on the other.
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What readers can conclude about capitalism and inflation
- Edwards’s 2023 warning was about the possible social and political consequences of perceived corporate profiteering during an inflation squeeze—not a verified forecast that capitalism would end.
- Corporate profits and margins can be high while the reasons for their movement remain disputed. The cited Federal Reserve analyses use different measures and reach distinct findings.
- The quoted Fortune 500 and BEA figures describe different populations, periods, and accounting concepts; neither alone establishes that corporate price-setting was the main cause of inflation.
- Price controls were Edwards’s proposed response. The cited reporting and analyses do not establish them as a consensus solution or demonstrate their effects.
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