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

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wanted milk to be more readily available to the average family, but the quantity of milk decreases. When the government approaches the producers for an explanation, their answer is that they would have suffered losses in producing milk because of the price they had to pay, let us say for fodder, and, therefore, they turned their milk production into butter for which there was no fixed maximum price. e government then price-fixes fodder. And then the same story is repeated with fodder. us, the government continues step-by-step until it reaches what the Germans in the First World War referred to as the “Hindenburg Plan,” a complete socialization of everything. e German government broke down at the end of the War. But several years later the Brüning government reinstated price controls which Hitler carried to their final conclusion. Price controls transformed private ownership and private production into a system of complete government control of everything. German communism, national socialism, under Hitler did not legally expropriate the owners of the means of production, but every economic step was determined by government. ere were still entrepreneurs, although the name “entrepreneurs” was eliminated; they were called “shop managers.” ey were at the head of business organizations, but they had to comply completely and exactly with the government orders. ey had to buy raw materials at prices set by government, sell to other firms at prices determined by government, and employ workers assigned to them by government. ere is no third economic system which makes it possible on the one hand to have a free market and on the other hand to avoid socialism or communism. Interference with the market inevitably brings about effects which, from the point of view of the interfering authorities, are even worse than the state of affairs they wanted to alter. In order to make the system work the authorities go farther step-by-step until they bring about a situation under which the initiative of everybody else is destroyed, and everything depends on the authorities, upon the leadership of government. e reason we do not have price controls here today is because of the experiences in other countries. Again and again the government repeats that we need to control prices. Yet it does not tell the cigarette manufacturers that it is forbidden for them to raise the price of a pack by one cent. Instead the government tries to talk with the cigarette manufacturers and with the representatives of a thousand other firms so as to pressure them. While the government has not as yet embarked on price control it hasn’t really done anything to prevent the present system from operating in a 35
way it does not like. As a matter of fact, quite the contrary. It has built inflation into our present system—inflation even in the popularly-accepted meaning in which the government uses the term, that is higher prices. We see, therefore, that the problem of money is much more than only the problem of the organization of the market. e market is today fighting for its independence and existence. e government tries to interfere with the market and we are now just one day, one year, nobody knows how far away from what is called control of prices. And that means the abolition of the market. 36
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 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 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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