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

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such a government to increase the quantity of money simply by printing it. Now there is a doctrine that says there is not enough gold. e reason why these critics of gold are against the gold standard is due to their belief that the quantity of money must be increased. Now the quantity of money adjusts itself necessarily through prices to the demands of the public. Yet, there are authors, professors, textbook writers, who tell us there is not enough money and they suggest a paper currency and regular yearly increases in the quantity of money. ey don’t know what they are talking about. Some of these textbook authors give another figure in every new edition of their textbooks by which they want to increase the quantity of money. In one edition they say 5%, in the next edition they say 8%, and so on. If a professor says that we should have a paper currency and that every year the government should add 8%, or 10%, or 5% additional new money, he does not give us a full description of what has to be done. is is perhaps an interesting fact to help us realize, let us say, the mentality of these authors, but it is not the problem which we have to deal with. e question is how the government should bring this money into circulation, to whom should it be given. What we have to realize is that the increase in the quantity of money cannot be neutral with regard to the conditions of the various individuals. It is, of course, rather puzzling that one has no other method of organizing the system of exchanges than by the use of a definite metal, a yellow metal, gold. One may ask the question: “What would have happened if there hadn’t been any gold” Or one may ask the question: “What will happen one day,” nobody can say anything today about it, “if people discover a method to produce gold at such a cheap price that gold will no longer be useful for the monetary purpose” To this question, I answer: “Ask me again when this is the case.” Perhaps—I don’t know, nobody knows—perhaps one day people will discover a method of producing gold out of nothing, or, let us say, out of non-gold. Perhaps gold will become as plentiful as air, and free to everyone. If everyone could have as much gold as he wanted, it would have no value on the market. No one would then be willing to take such a value-less commodity in trade for other goods or services and it would not then become a “medium of exchange.” If you have sleepless nights and have nothing else to think about, you could think about what will happen, you know, if one day gold could be produced in such a cheap way as, let us say, paper can be produced today. It could happen! But nobody thinks it will happen. It probably will not happen. But if it does happen then people will have to deal with the new problem. 19
And perhaps they will solve it; perhaps they will not solve it; we don’t know that today. But it is useless today to speculate what will happen, if this should happen. And as we don’t know anything about what the conditions will be at that time, we can say, “Let us wait. Let us wait to see whether really one day gold will be so abundant that it can no longer serve monetary purposes.” All right. If this should happen, the people living then—at that time—would have a problem to solve. But today we have another problem. Our problem is to keep the quantity of money from being increased and its purchasing power from being decreased through inflation. 20
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 22 and 23: know; it reduced the ratio of gold
Page 24 and 25: CHAPTER FIVE Gold Inflation e gold
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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