The Road to De-Civilization: Inflation and the Moral Erosion of Society
Posted by freedomforall 2 weeks, 2 days ago to Economics
Excerpt:
"There is nowadays a very reprehensible, even dangerous, semantic confusion that makes it extremely difficult for the non-expert to grasp the true state of affairs. Inflation, as this term was always used everywhere and especially in this country [the United States], means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term “inflation” to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation. It follows that nobody cares about inflation in the traditional sense of the term. As you cannot talk about something that has no name, you cannot fight it. Those who pretend to fight inflation are in fact only fighting what is the inevitable consequence of inflation, rising prices. Their ventures are doomed to failure because they do not attack the root of the evil.
Only later, as political expediency demanded it, was the definition corrupted to mean “a general rise in prices.” That semantic sleight of hand allowed governments to claim innocence while committing the very act they had redefined away.
...
Every expansion, Rothbard argued, constitutes a form of legalized counterfeiting that “robs all holders of money,” redistributing wealth from savers and producers to those nearest the new money’s points of entry. Prices adjust unevenly because new money does not enter all pockets at once. It flows—first to borrowers, banks, and state contractors—before dispersing through the broader economy. This “Cantillon effect” is central to the Austrian understanding: new money changes prices, which beget other chances, from injection points; inflation benefits those who receive new money first and penalizes those who receive it last."
"There is nowadays a very reprehensible, even dangerous, semantic confusion that makes it extremely difficult for the non-expert to grasp the true state of affairs. Inflation, as this term was always used everywhere and especially in this country [the United States], means increasing the quantity of money and bank notes in circulation and the quantity of bank deposits subject to check. But people today use the term “inflation” to refer to the phenomenon that is an inevitable consequence of inflation, that is the tendency of all prices and wage rates to rise. The result of this deplorable confusion is that there is no term left to signify the cause of this rise in prices and wages. There is no longer any word available to signify the phenomenon that has been, up to now, called inflation. It follows that nobody cares about inflation in the traditional sense of the term. As you cannot talk about something that has no name, you cannot fight it. Those who pretend to fight inflation are in fact only fighting what is the inevitable consequence of inflation, rising prices. Their ventures are doomed to failure because they do not attack the root of the evil.
Only later, as political expediency demanded it, was the definition corrupted to mean “a general rise in prices.” That semantic sleight of hand allowed governments to claim innocence while committing the very act they had redefined away.
...
Every expansion, Rothbard argued, constitutes a form of legalized counterfeiting that “robs all holders of money,” redistributing wealth from savers and producers to those nearest the new money’s points of entry. Prices adjust unevenly because new money does not enter all pockets at once. It flows—first to borrowers, banks, and state contractors—before dispersing through the broader economy. This “Cantillon effect” is central to the Austrian understanding: new money changes prices, which beget other chances, from injection points; inflation benefits those who receive new money first and penalizes those who receive it last."
I really feel sorry for the kids these days. I detect grossly lower hope with them than what we had…
"Inflation punishes thrift and rewards debt. Those who save in money lose; those who borrow in money gain, at least temporarily. The saver’s virtue becomes folly, and the speculator’s recklessness becomes advantageous. Over time, entire societies shift their time preferences—impatience replaces diligence, consumption replaces production and saving. Once the money signal is corrupted, society loses its sense of future orientation. Inflation de-civilizes by teaching people to live for the present. This is civilizational decay."