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

money had not been developed to a considerable extent. Charles I couldn’t
inflate, you know. ere was no solution for him; he could not engage
in deficit spending. is was the undoing of the Stuart family and the
Stuart regime. And in the conflict which originated out of this, one member
of the Stuart family lost his life in a very disagreeable way—Charles I
lost his head. 1 And the Stuart family as such lost the crown of England.
What the poor Stuarts didn’t have was the facility of the printing press as
it exists today.
e monetary problem we have to struggle with today is the problem
of paying for government expenditures which are not accepted or, let
us say, not approved, by the people. e conduct of government affairs,
public affairs, is not different from the conduct of the financial and monetary
conduct of private affairs. If the government wants to spend, it has
to collect the money; it must tax the people. If it doesn’t tax, but increases
the quantity of money in order to spend more, then it brings about an
inflation. e difference between the conditions in 18th century England
and the conditions in other countries, let us say for instance in Russia,
consisted of the fact that the Russian government was free to take away
from its subjects what it wanted while the British government was not.
e British government had to comply with the provisions of a set of laws
that limited the amount of money the government had the right to collect
from its citizens. And it had to spend this money precisely according to
the wishes of the people.
All our constitutional laws and our system of government are based
upon the fact the government is not permitted to do anything that violates
this system of laws representing the moral and actual ideas and philosophies
of our people. But if the government is in a position to increase
the quantity of money, all these provisions become absolutely meaningless
and useless. If it is said that the government has to spend, is entitled
to spend, a definite amount of money for keeping people in prisons, this
means something. ere is a definite reason for its spending. All our legal
provisions are influenced to some extent by the fact that this is the amount
of money which is given to the government for this purpose. But if the
government is in a position to increase the quantity of money to use for its
own purposes, then all these things become merely a theoretical expression
of something which has practically no meaning at all. We must not forget
that all the protection given to individuals through constitutions and laws
disappears if the government is in a position to destroy the meaning of ev-
1 Charles I was beheaded on January 30, 1649
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