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

CHAPTER
SEVEN
Inflation Destroys Savings
Everything that is done by a government against the purchasing power of
the monetary unit is, under present conditions, done against the middle
classes and the working classes of the population. Only these people don’t
know it. And this is the tragedy. e tragedy is that the unions and all
these people are supporting a policy that makes all their savings valueless.
And this is the great danger of the whole situation.
e conditions under which people are living in the industrial countries
of the west, which today means in practically all the countries where
the standard of civilization has made some progress since the 16th or 17th
century, the masses are in a position, fortunately, in the years in which
they are able to work, in which they are in full health, to provide for the
state of affairs as it will prevail in later years when they will either be absolutely
unfit to work or when their capacity to work will have decreased on
account of old age or other changes. Under conditions as they are today,
these people can only provide for their old age practically by either entering
into labor contracts which give them a pension for their later age, or
they can save a part of their income and invest it in such a way that they
can use it in later years. ese investments can be either simple savings
deposits with banks, or they can be life insurance policies or bonds, for
instance, government bonds which appear in many countries as perfectly
safe. In all these cases the future of these people who are providing in this
way for their old age, for their families and children is closely connected
with the purchasing power of the monetary unit.
e man who owns an agricultural estate, the producer of oil or of
foods, or the businessman who owns a factory is in a different position.
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