Ludwig von Mises on Money and Inflation.pdf - The Ludwig von ...

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know; it reduced the ratio of gold to the U.S. dollar. In 1935 the U.S. Supreme Court ruled 2 that, as the bondholders had received payment in legal tender notes, they could not show damage and would not be paid in gold. is country of Utopia said, “We also accept this new ‘price.’ We will pay you, the bondholder, only the lower quantity of gold according to the new American law, a law which didn’t exist at the time we sold you this obligation when we bound ourselves to pay to you.” at means the right of governments concerning money is considered as something quite special today, something which is not subject to the general conditions and practices of the market economy. is precisely is the reason for the monetary problem which we now have. All this was possible only on account of the fact that government is the institution that determines what the agreements between the citizens mean, what the content of these agreements are. Government has the power to force people who, according to their government’s declaration, do not comply with their agreement to pay the sums required. And as the government assumes, necessarily, that the courts should have the power to declare whether or not the parties have complied with an agreement concluded between them, so do the governments presume that they alone have the power to declare what money is and what money is not. Just as the courts have to determine if there is a conflict between the parties to an agreement as to whether a certain thing referred to in a contract is wool, for instance, or is not wool, so do the governments presume to say whether a certain thing is money or is not money of a certain definite quantity. And in this way, again and again, governments have destroyed the markets of the world. And in destroying the markets they have gone so far as to destroy completely the system of money, making it necessary to develop a new monetary system. What we have to realize is this: Every kind of human arrangement is connected in some way or other with money payments. And, therefore if you destroy the monetary system of a country or of the whole world, you are destroying much more than simply one aspect. When you destroy the monetary system, you are destroying in some regards the basis of all interhuman relations. If one talks of money, one talks about a field in which governments were doing the very worst thing which could be done, destroying the market, destroying human cooperation, destroying 2 e majority of the Court found on February 18, 1935 in the Gold Clause cases that the plaintiffs had not been harmed by the abrogation of the gold clause because they did not show that in relation to buying power they had sustained any loss whatsoever. —BBG 15
all peaceful relations between men. e fact is that with the gold standard it is possible to have a monetary standard that cannot be destroyed by the governments. ere is no reason to give to the governments greater influence over monetary problems. While it is really absolutely correct to say that it is just an accident that it is precisely gold and not something else that serves this monetary purpose, the fact is that with the gold standard it is impossible for governments to destroy the monetary system. On the other hand, there is nothing easier for governments to do than to destroy a system of money which is based upon too much confidence in the government. 16
Page 2 and 3: LUDWIG VON MISES ON MONEY AND INFLA
Page 4 and 5: Copyright © 2010 by the Lu
Page 6 and 7: 14 Two Monetary Problems 59 15 Defi
Page 8 and 9: CHAPTER ONE Human Cooperation Human
Page 10 and 11: CHAPTER TWO e Medium of Exchange—
Page 12 and 13: CHAPTER THREE e Role of the Courts
Page 14 and 15: from resorting to violence. Now, vi
Page 16 and 17: the power to call non-potatoes “p
Page 18 and 19: CHAPTER FOUR Gold as Money Now, we
Page 20 and 21: accepted, is that an increase in th
Page 24 and 25: CHAPTER FIVE Gold Inflation e gold
Page 26 and 27: such a government to increase the q
Page 28 and 29: CHAPTER SIX Inflation e first rule,
Page 30 and 31: the fact that these countries will
Page 32 and 33: of view of clear fine theories, thi
Page 34 and 35: When the prices of the products whi
Page 36 and 37: ment spends also billions of tax mo
Page 38 and 39: But when he reached his sixtieth bi
Page 40 and 41: CHAPTER EIGHT Inflation and Governm
Page 42 and 43: wanted milk to be more readily avai
Page 44 and 45: CHAPTER NINE Money, Inflation, and
Page 46 and 47: have been in a position to deliver
Page 48 and 49: Germany went to war, the government
Page 50 and 51: constitutional law, that is whether
Page 52 and 53: ery inter-human relation by undermi
Page 54 and 55: servative way with the forests whic
Page 56 and 57: man newspaper with regard to econom
Page 58 and 59: CHAPTER TWELVE Currency Debasement
Page 60 and 61: market has been preserved because o
Page 62 and 63: However, these inflationary methods
Page 64 and 65: and, therefore, impairing their con
Page 66 and 67: CHAPTER FOURTEEN Two Monetary Probl
Page 68 and 69: money What is the effect of governm
Page 70 and 71: was wonderful! It was considered so
Page 72 and 73:
sures.” ey have invented many oth
Page 74 and 75:
est. In fact the only thing that is
Page 76 and 77:
CHAPTER SEVENTEEN Balance of Paymen
Page 78 and 79:
ties abroad—in France champagne a
Page 80 and 81:
French producers of wine. And the p
Page 82 and 83:
CHAPTER EIGHTEEN Inter-bank Liquidi
Page 84 and 85:
ate in order to stop the withdrawal
Page 86 and 87:
per gold is something which the gov
Page 88 and 89:
tants would have to use other figur
Page 90 and 91:
CHAPTER TWENTY Conclusion We must r
Page 92:
a very popular expenditure on the e
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