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

CHAPTER
TEN
e Constitutional Side of Inflation
When we talk about these things we must not forget that they do not have
only an economic side; they also have a constitutional side. You may say
that government is the most important institution. e government is
very important in many regards. Perhaps one overrates the importance of
the government, but one does not overrate the importance of good government.
Modern constitutions, the political systems of all nations that are not
ruled by barbarian despots, are based upon the fact that the government
depends financially upon the people, indirectly upon the men that the voters
have elected for the constitutional assembly. And this system means
that the government has no power to spend anything that has not been
given it by the people, through the constitutional procedures which make
it possible for the government to collect taxes. is is the fundamental
political institution. And it is a fundamental political problem if the government
can inflate. If the government has the power to print its own
money, then this constitutional procedure becomes absolutely useless.
Our whole political system is based upon the fact that the voters are
sovereign, that the voters are electing Congress and other such institutions
in the various states that rule the country. We call the United States
a democracy because the rule of the country is in the hands of the voters.
e voters determine everything. And this distinguishes the system,
not only from the despotic systems of other countries, but also from the
conditions as they prevailed in earlier days, in countries that already had
parliamentary institutions and parliamentary government, at that time.
However, there has developed, especially in the last decade, a problem of
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