The guiding “fitness function” for Western economies thus became full employment. This worked well for a time, Blyth notes, but eventually led to what was called “cost-push inflation.” That is, if everyone is employed, there is no barrier to moving from job to job, and the only way to hang on to employees is to pay them more, which employers necessarily compensated themselves for by raising prices, in a continuing spiral of higher wages and higher prices. As Blyth notes, every intervention is subject to Goodhart’s Law: “Targeting any variable long enough undermines the value of the variable.”
