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

When the prices of the products which he is selling go up on account of
the inflation, he will not be hurt in the same way in which other people
are hurt by the inflation. e owner of common stock will see that, by and
large, most of this common stock is going up in price to the same degree
as the prices of commodities are going up on account of the inflation. But
it is different for people with fixed incomes. e man who retired 25 years
ago with a yearly pension, let us say of $3,000, was by and large in a good
situation or was believed to be in a good situation. But this was at a time
when prices were much lower than they are today. I don’t want to say any
more about this situation and the consequences and effects of inflation for
the people. What I want to point out is that the greatest problem today is
precisely this, although the people don’t realize it. e danger is due to the
fact that people consider inflation as something which hurts other people.
ey realize very well that they too have to suffer because the prices of the
commodities they are buying go up continually, but they don’t realize fully
that the greatest danger for them is precisely the progress of inflation and
the effect it will have on the value of their savings.
All over Europe today you see unrest due to the fact that the European
masses are discovering that they have been the losers in all these financial
operations which their own governments have considered as a very wonderful
thing. And, therefore, also from the point of view of making it
possible for the masses to enjoy the improvement of economic conditions
and to make them partners, real partners, in the great development of industrial
production that is going on practically now already in all countries
of Europe and North America, even including Mexico, it is necessary to
abandon the policy of inflation. e great unrest that is today characteristic
of everything that is going on in Europe, the revolutionary ideas of
the masses, especially of the sons of the middle classes who are studying at
the universities, are due to the fact that the European governments, with
the exception perhaps of the government of the little country Switzerland
and other such very small countries, have in the last sixty years again and
again embarked upon a policy of limitless inflation. 1
1 <strong>Mises</strong> was referring to the student riots that took place in Paris in the spring of 1968.
e British had devalued the pound on November 18, 1967 from US$2.80 to US$2.40
and there was an international gold crisis in March 1968. e French wanted to return
to the gold standard. In May “rebellious students at the Sorbonne and elsewhere, rioted,
battled police and were joined by some 10,000,000 workers who launched nationwide
strikes and took over many factories. e nation was almost completely paralyzed.” Finally
after pay increases were awarded the strikers and Army tanks were called out, normalcy
was returned in early June. See World Almanac, 1969, pp. 63, 72, 512–513. —BBG
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