1gDdM7w

154 Economics in One Lessonmaterials and prices of finished goods, or between one price andanother, or one wage and another. At some point these maladjustmentshave removed the incentive to produce, or have made it actuallyimpossible for production to continue; and through the organicinterdependence of our exchange economy, depression spreads. Notuntil these maladjustments are corrected can full production andemployment be resumed.True, inflation may sometimes correct them; but it is a heady anddangerous method. It makes its corrections not openly and honestly,but by the use of illusion. It is like getting people up an hour earlieronly by making them believe that it is eight o’clock when it is reallyseven. It is perhaps no mere coincidence that a world which has toresort to the deception of turning all its clocks ahead an hour in orderto accomplish this result should be a world that has to resort to inflationto accomplish an analogous result in the economic sphere.For inflation throws a veil of illusion over every economic process.It confuses and deceives almost everyone, including even those whosuffer by it. We are all accustomed to measuring our income andwealth in terms of money. The mental habit is so strong that evenprofessional economists and statisticians cannot consistently break it.It is not easy to see relationships always in terms of real goods andreal welfare. Who among us does not feel richer and prouder when heis told that our national income has doubled (in terms of dollars, ofcourse) compared with some pre-inflationary period? Even the clerkwho used to get $25 a week and now gets $35 thinks that he must bein some way better off, though it costs him twice as much to live as itdid when he was getting $25. He is of course not blind to the rise inthe cost of living. But neither is he as fully aware of his real positionas he would have been if his cost of living had not changed and if hismoney salary had been reduced to give him the same reduced purchasingpower that he now has, in spite of his salary increase, because of higherprices. Inflation is the autosuggestion, the hypnotism, the anesthetic,that has dulled the pain of the operation for him. Inflation is theopium of the people.