May 17, 2024 • 44 mins
"When a government increases the quantity of paper money, the result is that the purchasing power of the monetary unit begins to drop, and so prices rise. This is called inflation."- Ludwig von Mises
In this Austrian Audible episode of THE Bitcoin Podcast, Walker reads Lecture 4: INFLATION, from Economic Policy: Thoughts for Today and Tomorrow by Ludwig von Mises, AKA Mises Six Lessons
Each of the six Mises lectures will be released as it's own episode in the coming weeks. Make sure to subscribe to "THE Bitcoin Podcast" wherever you listen or watch.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
How long can a central bank continue in inflation?
(00:03):
Probably as long as people are convinced that the government,
sooner or later but certainly not too late, will stop printing money and thereby stop
decreasing the value of each unit of money. When people no longer believe this, when they
realize that the government will go on and on without any intention of stopping, then they
(00:26):
begin to understand that prices tomorrow will be higher than they are today. Then they begin
buying at any price, causing prices to go up to such heights that the monetary system breaks down.
Greetings and salutations, my fellow plebs. My name is Walker and this is the Bitcoin Podcast.
(00:56):
The Bitcoin time chain is 843752 and the value of one Bitcoin is still one Bitcoin. Today's
episode is Austrian Audible. I'll be reading the fourth of Mises' six lectures and the topic
today is inflation. If this is your first time listening to the Bitcoin podcast and this Austrian
(01:19):
Audible series, consider going back to the previous episodes on capitalism, socialism,
and interventionism. And listening to those first, I believe these six lessons from Mises
are best experienced in the order in which they were originally delivered. But of course, it's
up to you. You can download the PDF of Economic Policy, Thoughts for Today and Tomorrow by Ludwig
(01:43):
von Mises in the show notes. Today's lecture on inflation is really excellent and it's insane how
all the misconceptions about inflation and the tendencies of politicians that Mises discusses
in 1959 are still just as relevant today. I guess not enough people paid attention to the
(02:03):
School of Austrian Economics at that time, but hopefully now more will start to please share
these Austrian Audible lessons with your friends, family, and strangers on the internet who do not
understand that the true cause of inflation is printing money out of thin air. It's literally
what inflation means. These people can honestly benefit from the knowledge of real economics,
(02:28):
as taught by Mises and the Austrian School. You can find the links to watch or listen to the show
on all platforms by going to BitcoinPodcast.net and via the links in the show notes. If you're
enjoying the Bitcoin podcast, do me a favor and give this show a five star rating because apparently
that helps other people discover the show. And if you're listening on fountain.fm, which I personally
(02:52):
recommend, consider giving this show a boost or creating a clip of something you found interesting.
Finally, if you are a Bitcoin only company looking to sponsor the Bitcoin podcast,
hit me up via social media or by going to BitcoinPodcast.net slash sponsor. Without further ado,
let's get into lesson four from Mises six lessons. Inflation. Economic policy. Thoughts for today
(03:28):
and tomorrow by Ludwig von Mises. Fourth lecture. Inflation. If the supply of caviar were as plentiful
as the supply of potatoes, the price of caviar, that is the exchange ratio between caviar and money,
or caviar and other commodities would change considerably. In that case, one could obtain
(03:52):
caviar at a much smaller sacrifice than is required today. Likewise, if the quantity of money is
increased, the purchasing power of the monetary unit decreases and the quantity of goods that can
be obtained for one unit of this money decreases also when in the 16th century, American resources
(04:16):
of gold and silver were discovered and exploited. Enormous quantities of the precious metals
were transported to Europe. The result of this increase in the quantity of money was a general
tendency toward an upward movement of prices in Europe in the same way today. When a government
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increases the quantity of paper money, the result is that the purchasing power of the monetary unit
begins to drop. And so prices rise. This is called inflation. Unfortunately, in the United States,
as well as in other countries, some people prefer to attribute the cause of inflation not to an
(05:00):
increase in the quantity of money, but rather to the rise in prices. However, there has never been
any serious argument against the economic interpretation of the relationship between
prices and the quantity of money, or the exchange ratio between money and other goods, commodities,
and services. Under present-day technological conditions, there is nothing easier than to
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manufacture pieces of paper upon which certain monetary amounts are printed. In the United States,
where all the notes are of the same size, it does not cost the government more to print a bill of
a thousand dollars than it does to print a bill of one dollar. It is purely a printing procedure
that requires the same quantity of paper and ink. In the 18th century, when the first attempts were
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made to issue banknotes and to give these banknotes the quality of legal tender, that is, the right
to be honored in exchange transactions in the same way that gold and silver pieces were honored,
the governments and nations believed that bankers had some great secret knowledge,
enabling them to produce wealth out of nothing. When the governments of the 18th century were in
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financial difficulties, they thought all they needed was a clever banker at the head of their
financial management in order to get rid of all their difficulties. Some years before the French
Revolution, when the royalty of France was in financial trouble, the king of France sought out
a clever banker and appointed him to a high position. This man was, in every regard, the opposite of
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the people who, up to that time, had ruled France. First of all, he was not a Frenchman. He was a
foreigner, a Swiss from Geneva, Jacques Necker. Secondly, he was not a member of the aristocracy.
He was a simple commoner. And what counted even more in 18th century France, he was not a Catholic,
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but a Protestant. And so, Monsieur Necker, the father of the famous Madame d'Estelle, became
the minister of finance, and everyone expected him to solve the financial problems of France.
But in spite of the high degree of confidence Monsieur Necker enjoyed, the royal cash box
remained empty. Necker's greatest mistake, having been his attempt to finance aid to the American
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colonists in their war of independence against England, without raising taxes. This was certainly
the wrong way to go about solving France's financial troubles. There can be no secret way to the
solution of the financial problems of a government. If it needs money, it has to obtain the money by
taxing its citizens, or under special conditions, by borrowing it from people who have the money.
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But many governments, we can even say most governments, think there is another method for
getting the needed money, simply to print it. If the government wants to do something beneficial,
if, for example, it wants to build a hospital, the way to find the needed money for this project
is to tax the citizens and build the hospital out of tax revenues. Then no special price revolution
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will occur, because when the government collects money for the construction of the hospital,
the citizens, having paid the taxes, are forced to reduce their spending. The individual taxpayer
is forced to restrict either his consumption, his investments, or his savings. The government,
appearing on the market as a buyer, replaces the individual citizen. The citizen buys less,
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but the government buys more. The government, of course, does not always buy the same goods,
which the citizens would have bought. But on average, there occurs no rise in prices,
due to the government's construction of a hospital. I choose this example of a hospital,
precisely because sometimes people say, it makes a difference whether the government uses its money
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for good or for bad purposes. I want to assume that the government always uses the money which it
has printed for the best possible purposes, purposes with which we all agree, for it is not
the way in which the money is spent. It is the way in which the government obtains this money,
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and brings about those consequences we call inflation, and which most people in the world
today do not consider as beneficial. For example, without inflating, the government could use the
tax collected money for hiring new employees, or for raising the salaries of those who are already
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in government service. Then, these people whose salaries have been increased are in a position
to buy more. When the government taxes the citizens and uses this money to increase the
salaries of government employees, the taxpayers have less to spend. But the government employees
have more, prices in general will not increase. But if the government does not use tax money
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for this purpose, if it uses freshly printed money instead, it means that there will be people
who now have more money, while all other people still have as much as they did before. So those
who receive the newly printed money will be competing with those people who were buyers before.
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And since there are no more commodities than there were previously, but there is more money on the
market, and since there are now people who can buy more today than they could have bought yesterday,
there will be an additional demand for the same quantity of goods. Therefore, prices will tend
to go up. This cannot be avoided, no matter what the use of this newly issued money will be. And
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more importantly, this tendency for prices to go up will develop step by step. It is not a general
upward movement of what has been called the price level. The metaphorical expression, price level,
must never be used. When people talk of a price level, they have in mind the image of a level
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of liquid, which goes up or down, according to the increase or decrease in its quantity,
but which, like a liquid in a tank, always rises evenly. But with prices, there is no such thing
as a level. Prices do not change to the same extent at the same time. There are always prices that
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are changing more rapidly, rising or falling more rapidly than other prices. There is a reason for
this. Consider the case of a government employee who received the new money added to the money
supply. People do not buy today precisely the same commodities and in the same quantities as they did
yesterday. The additional money which the government has printed and introduced into the market is
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not used for the purchase of all commodities and services. It is used for the purchase of certain
commodities, the prices of which will rise, while other commodities will still remain at the prices
that prevailed before the new money was put on the market. Therefore, when inflation starts,
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different groups within the population are affected by this inflation in different ways.
Those groups who get the new money first gain a temporary benefit. When the government inflates
in order to wage a war, it has to buy munitions, and the first to get the additional money are the
munitions industries and the workers within those industries. These groups are now in a very
(13:07):
favorable position. They have higher profits and higher wages. Their business is moving. Why?
Because they were the first to receive the additional money and having now more money at their
disposal, they are buying and they are buying from other people who are manufacturing and selling
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the commodities that these munitions makers want. These other people form a second group and this
second group considers inflation to be very good for business. Why not? Isn't it wonderful to sell
more? For example, the owner of a restaurant in the neighborhood of a munitions factory says,
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it really is marvelous. The munitions workers have more money. There are many more of them now
than there were before. They are all patronizing my restaurant. I am very happy about it. He does
not see any reason to feel otherwise. The situation is this. Those people to whom the money comes
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first now have a higher income and they can still buy many commodities and services at prices
which correspond to the previous state of the market to the condition that existed on the eve
of inflation. Therefore, they are in a very favorable position and thus inflation continues
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step by step from one group of the population to another. And all those to whom the additional
money comes at the early state of inflation are benefited because they are buying some things
at prices still corresponding to the previous stage of the exchange ratio between money and
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commodities. But there are other groups in the population to whom the additional money comes
much much later. These people are in an unfavorable position. Before the additional money comes to
them, they are forced to pay higher prices than they paid before, for some or practically all,
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of the commodities they wanted to purchase, while their income has remained the same or has not
increased proportionally with prices. Consider for instance a country like the United States during
the Second World War. On the one hand inflation at that time favored the munitions workers,
the munitions industries, the manufacturers of guns, while on the other hand it worked against
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other groups of the population. And the ones who suffered the greatest disadvantages from inflation
were the teachers and the ministers. As you know a minister is a very modest person who serves God
and must not talk too much about money. Teachers likewise are dedicated persons who are supposed
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to think more about educating the young than about their salaries. Consequently the teachers and
ministers were among those who were most penalized by inflation for the various schools and churches
were the last to realize that they must raise salaries. When the church elders and the school
corporations finally discovered that after all one should also raise the salaries of those dedicated
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people, the earlier losses they had suffered still remained. For a long time they had to buy
less than they did before to cut down their consumption of better and more expensive foods
and to restrict their purchase of clothing because prices had already adjusted upward
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while their incomes, their salaries had not yet been raised. This situation has changed considerably
today at least for teachers. There are therefore always different groups in the population being
affected differently by inflation. For some of them inflation is not so bad. They even ask for a
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continuation of it because they are the first to profit from it. We will see in the next lecture
how this unevenness in the consequences of inflation vitally affects the politics that
lead toward inflation. Under these changes brought about by inflation we have groups who are favored
and groups who are directly profiteering. I do not use the term profiteering as a reproach to
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these people for if there is someone to blame it is the government that has established the inflation
and there are always people who favor inflation because they realize what is going on sooner
than other people do. Their special profits are due to the fact that there will necessarily be
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unevenness in the process of inflation. The government may think that inflation as a method
of raising funds is better than taxation which is always unpopular and difficult.
In many rich and great nations legislators have often discussed for months and months
the various forms of new taxes that were necessary because the parliament had decided to increase
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expenditures. Having discussed various methods of getting the money by taxation they finally
decided that perhaps it was better to do it by inflation but of course the word inflation was
not used. The politician in power who proceeds toward inflation does not announce I am proceeding
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toward inflation. The technical methods employed to achieve the inflation are so complicated that
the average citizen does not realize inflation has begun. One of the biggest inflations in history
was in the German Reich after the First World War. The inflation was not so momentous during the war
it was the inflation after the war that brought about the catastrophe. The government did not say
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via proceeding toward inflation the government simply borrowed money very indirectly from
the central bank. The government did not have to ask how the central bank would find and deliver
the money. The central bank simply printed it. The great thing about bitcoin is that we know
there will only ever be 21 million unlike the US dollar and literally every other fiat currency
(19:31):
whose maximum supply is infinity. If you want to protect yourself from fiat monetary inflation
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(19:55):
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(20:17):
bitbox.swiss slash walker and use promo code walker not only do you get 5% off but you also
help support this podcast so thank you. Today the techniques for inflation are complicated by the
fact that there is checkbook money it involves another technique but the result is the same
with the stroke of a pen the government creates fiat money thus increasing the quantity of money
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and credit the government simply issues the order and the fiat money is there the government does not
care at first that some people will be losers it does not care that prices will go up the legislators
say this is a wonderful system but this wonderful system has one fundamental weakness it cannot last
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if inflation could go on forever there would be no point in telling governments they should not
inflate but the certain fact about inflation is that sooner or later it must come to an end
it is a policy that cannot last in the long run inflation comes to an end with the breakdown of
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the currency it comes to a catastrophe to a situation like the one in Germany in 1923 on
august 1st 1914 the value of the dollar was four marks and 20 phoenix nine years and three months
later in november 1923 the dollar was pegged at 4.2 trillion marks in other words the mark was worth
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nothing it no longer had any value some years ago a famous author john manard keens wrote in the long
run we are all dead this is certainly true i'm sorry to say but the question is how short or long
will the short run be in the 18th century there was a famous lady madame du pompadour who is credited
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with the dictum après nous les deluges after us will come the flood madam du pompadour was happy
enough to die in the short run but her successor in office madame du bali outlived the short run and
was beheaded in the long run for many people the long run quickly becomes the short run and the longer
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inflation goes on the sooner the short run how long can the short run last how long can a central
bank continue in inflation probably as long as people are convinced that the government sooner
or later but certainly not too late will stop printing money and thereby stop decreasing the
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value of each unit of money when people no longer believe this when they realize that the government
will go on and on without any intention of stopping then they begin to understand that prices tomorrow
will be higher than they are today then they begin buying at any price causing prices to go up to
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such heights that the monetary system breaks down i referred to the case of germany which the whole
world was watching many books have described the events of that time although i am not german but
in austrian i saw everything from the inside in austria conditions were not very different from those
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in germany nor were they much different in many other european countries for several years the
german people believed that their inflation was just a temporary affair that it would soon come
to an end they believed it for almost nine years until the summer of 1923 then finally they began
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to doubt as the inflation continued people thought it wiser to buy anything available instead of
keeping money in their pockets furthermore they reasoned that one should not give loans of money
but on the contrary that it was a very good idea to be a debtor thus inflation continued feeding
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on itself and it went on in germany until exactly november 20th 1923 the masses had believed inflation
money to be real money but then they found out that conditions had changed at the end of the
german inflation in the fall of 1923 german factories paid their workers every morning in advance for
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the day and the working man who came to the factory with his wife handed his wages all the millions he
got over to her immediately and the lady immediately went to a shop to buy something no matter what
she realized what most people knew at the time that overnight from one day to another the mark
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lost 50 percent of its purchasing power money like chocolate in a hot oven was melting in the pockets
of the people this last phase of german inflation did not last long after a few days the whole
nightmare was over the mark was valueless and a new currency had to be established lord kienz the
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same man who said that in the long run we are all dead was one of a long line of inflationist authors
of the 20th century they all wrote against the gold standard when kienz attacked the gold standard
he called it a barbarous relic and most people today consider it ridiculous to speak of a return
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to the gold standard in the united states for instance you are considered to be more or less
of a dreamer if you say sooner or later the united states will have to return to the gold standard
yet the gold standard has one tremendous virtue the quantity of money under the gold standard
is independent of the policies of governments and political parties this is its advantage
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it is a form of protection against spend-thrift governments if under the gold standard a government
is asked to spend money for something new the minister of finance can say and where do i get the
money tell me first how it will find the money for this additional expenditure under an inflationary
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system nothing is simpler for the politicians to do than to order the government printing office to
provide as much money as they need for their projects under a gold standard sound government
has a much better chance its leaders can say to the people and to the politicians we can't do it
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unless we increase taxes but under inflationary conditions people acquire the habit of looking
upon the government as an institution with limitless means at its disposal the state the government
can do anything if for instance the nation wants a new highway system the government is expected
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to build it but where will the government get the money one could say that in the united states
today and even in the past under mckinley the republican party was more or less in favor of
sound money and of the gold standard and the democratic party was in favor of inflation of
course not a paper inflation but a silver inflation it was however a democratic president of the
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united states president cleveland who at the end of the 1880s vetoed a decision of congress to give
a small sum about ten thousand dollars to help a community that had suffered some disaster and
president cleveland justified his veto by writing while it is the duty of the citizens to support
the government it is not the duty of the government to support the citizens this is something which
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every statesman should write on the wall of his office to show to the people who come asking for
money i am rather embarrassed by the necessity to simplify these problems there are so many
complex problems in the monetary system and i would not have written volumes about them
if they were as simple as i am describing them here but the fundamentals are precisely these
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if you increase the quantity of money you bring about the lowering of the purchasing power of
the monetary unit this is what people whose private affairs are unfavorably affected do not like
people who do not benefit from inflation are the ones who complain if inflation is bad and if
people realize it why has it become almost a way of life in all countries even some of the richest
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countries suffer from this disease the united states today is certainly the richest country in the
world with the highest standard of living but when you travel in the united states you will discover
there is constant talk about inflation and about the necessity to stop it but they only talk they do
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not act to give you some facts after the first world war great britain returned to the pre-war
gold parity of the pound that is it revalued the pound upward this increased the purchasing power
of every worker's wages in an unhampered market the nominal money wage would have fallen to compensate
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for this and the worker's real wage would not have suffered we do not have time here to discuss
the reasons for this but the unions in great britain were unwilling to accept an adjustment
of money wage rates downward as the purchasing power of the monetary unit rose therefore real
wages were raised considerably by this monetary measure this was a serious catastrophe for england
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because great britain is a predominantly industrial country that has to import its raw materials
have finished goods and food stuffs in order to live and has to export manufactured goods
to pay for these imports with the rise in the international value of the pound the price of
british goods rose on foreign markets and sales and exports declined great britain had in effect
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priced itself out of the world market the unions could not be defeated you know the power of a
union today it has the right practically the privilege to resort to violence and a union
order is therefore let us say not less important than a government decree the government decree
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is an order for the enforcement of which the enforcement apparatus of the government the
police is ready you must obey the government decree otherwise you will have difficulties with the
police unfortunately we have now in almost all countries all over the world a second power
that is in a position to exercise force the labor unions the labor unions determine wages and then
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strike to enforce them in the same way in which the government might decree a minimum wage rate
i will not discuss the union question now i shall deal with it later i only want to establish
that it is the union policy to raise wage rates above the level they would have been on an unhampered
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market as a result a considerable part of the potential labor force can be employed only by
people or industries that are prepared to suffer losses and since businesses are not able to keep
on suffering losses they close their doors and people become unemployed the setting of wage
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rates above the level they would have on the unhampered market always results in the unemployment
of a considerable part of the potential labor force in great britain the result of high wage
rates enforced by the labor unions was lasting unemployment prolonged year after year millions
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of workers were unemployed production figures dropped even experts were perplexed in this
situation the british government made a move which it considered an indispensable emergency
measure it devalued its currency the result was that the purchasing power of the money wages upon
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which the unions had insisted was no longer the same the real wages the commodity wages were
reduced now the worker could not buy as much as he had been able to buy before even though the
nominal wage rates remained the same in this way it was thought real wage rates would return to the
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free market levels and unemployment would disappear this measure devaluation was adopted by various
other countries by france the netherlands and belgium one country even resorted twice to this
measure within a period of one year and a half that country was Czechoslovakia it was a surreptitious
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method let us say to thwart the power of the unions you could not call it a real success however
after a few years the people the workers even the unions began to understand what was going on
they came to realize that currency devaluation had reduced their real wages the unions had the
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power to oppose this in many countries they inserted a clause into wage contracts providing
that money wages must go up automatically with an increase in prices this is called indexing the
unions became index conscious so this method of reducing unemployment that the government of Great
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Britain started in 1931 which was later adopted by almost all important governments this method of
solving unemployment no longer works today in 1936 in his general theory of employment interest
and money lord keens unfortunately elevated this method the emergency measures of the period between
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1929 and 1933 to a principle to a fundamental system of policy and he justified it by saying in effect
unemployment is bad if you want unemployment to disappear you must inflate the currency he realized
very well that wage rates can be too high for the market that is too high to make it profitable
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for an employer to increase his workforce thus too high from the point of view of the total
working population for with wage rates imposed by unions above the market only a part of those
anxious to earn wages can obtain jobs and keens said in effect certainly mass unemployment prolonged
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year after year is a very unsatisfactory condition but instead of suggesting that wage rates could
and should be adjusted to market conditions he said in effect if one devalues the currency
and the workers are not clever enough to realize it they will not offer resistance against a drop
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in real wage rates as long as nominal wage rates remain the same in other words lord keens was
saying that if a man gets the same amount of sterling today as he got before the currency was
devalued he will not realize that he is in fact now getting less in old-fashioned language keens
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proposed cheating the workers instead of declaring openly that wage rates must be adjusted to the
conditions of the market because if they are not a part of the labor force will inevitably remain
unemployed he said in effect full employment can be reached only if you have inflation cheat the
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workers the most interesting fact however is that when his general theory was published it was no
longer possible to cheat because people had already become index conscious but the goal of full
employment remained what does full employment mean it has to do with the unhampered labor market
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which is not manipulated by the unions or by the government on this market wage rates for every
type of labor tend to reach a point at which everybody who wants a job can get one and every
employer can hire as many workers as he needs if there is an increase in the demand for labor
the wage rate will tend to be greater and if fewer workers are needed the wage rate will tend to fall
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the only method by which a full employment situation can be brought about is by the maintenance of an
unhampered labor market this is valid for every kind of labor and for every kind of commodity
what does a businessman do when he wants to sell a commodity for five dollars a unit
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when he cannot sell it at that price the technical business expression in the united states is the
inventory does not move but it must move he cannot retain things because he must buy something new
fashions are changing so he sells at a lower price if he cannot sell the merchandise at five
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dollars he must sell it at four if he cannot sell it at four he must sell it at three there is no
other choice as long as he stays in business he must suffer losses but these losses are due to
the fact that his anticipation of the market for his product was wrong it is the same with thousands
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and thousands of young people who come every day from the agricultural districts into the city trying
to earn money it happens so in every industrial nation in the united states they come to town with
the idea that they should get say a hundred dollars a week this may be impossible so if a man cannot
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get a job for a hundred dollars a week he must try to get a job for ninety or eighty dollars and
perhaps even less but if he were to say as the unions do one hundred dollars a week or nothing
then he might have to remain unemployed many do not mind being unemployed because the government
pays unemployment benefits out of special taxes levied on the employers which are sometimes nearly
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as high as the wages the man would receive if he were employed because a certain group of people
believes that full employment can be attained only by inflation inflation is accepted in the
united states people are discussing the question should we have a sound currency with unemployment
(39:48):
or inflation with full employment this is in fact a very vicious analysis to deal with this problem
we must raise the question how can one improve the condition of workers and of all other groups of
the population the answer is by maintaining an unhampered labor market and thus achieving full
(40:10):
employment our dilemma is shall the market determine wage rates or shall they be determined by union
pressure and compulsion the dilemma is not shall we have inflation or unemployment this
mistaken analysis of the problem is argued in england in european industrial countries
(40:31):
and even in the united states and some people say now look even the united states is inflating
why should we not do it also to these people one should answer first of all one of the privileges
of a rich man is that he can afford to be foolish much longer than a poor man and this is the situation
(40:54):
of the united states the financial policy of the united states is very bad and getting worse
perhaps the united states can afford to be foolish a bit longer than some other countries
the most important thing to remember is that inflation is not an act of god inflation is
not a catastrophe of the elements or a disease that comes like the plague inflation is a policy
(41:21):
a deliberate policy of people who resort to inflation because they consider it to be a lesser
evil than unemployment but the fact is that in the not very long run inflation does not cure
unemployment inflation is a policy and a policy can be changed therefore there is no reason to
(41:47):
give in to inflation if one regards inflation as an evil then one has to stop inflating
one has to balance the budget of the government of course public opinion must support this the
intellectuals must help the people to understand given the support of public opinion it is certainly
(42:09):
possible for the people's elected representatives to abandon the policy of inflation we must remember
that in the long run we may all be dead and certainly will be dead but we should arrange
our earthly affairs for the short run in which we have to live in the best possible way and one
(42:32):
of the measures necessary for this purpose is to abandon inflationary policies
and that's a wrap on this Austrian audible episode of the bitcoin podcast if you are a
(42:52):
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(43:35):
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How long can a central bank continue in inflation?
(00:03):
Probably as long as people are convinced that the government,
sooner or later but certainly not too late, will stop printing money and thereby stop
decreasing the value of each unit of money. When people no longer believe this, when they
realize that the government will go on and on without any intention of stopping, then they
(00:26):
begin to understand that prices tomorrow will be higher than they are today. Then they begin
buying at any price, causing prices to go up to such heights that the monetary system breaks down.
Greetings and salutations, my fellow plebs. My name is Walker and this is the Bitcoin Podcast.
(00:56):
The Bitcoin time chain is 843752 and the value of one Bitcoin is still one Bitcoin. Today's
episode is Austrian Audible. I'll be reading the fourth of Mises' six lectures and the topic
today is inflation. If this is your first time listening to the Bitcoin podcast and this Austrian
(01:19):
Audible series, consider going back to the previous episodes on capitalism, socialism,
and interventionism. And listening to those first, I believe these six lessons from Mises
are best experienced in the order in which they were originally delivered. But of course, it's
up to you. You can download the PDF of Economic Policy, Thoughts for Today and Tomorrow by Ludwig
(01:43):
von Mises in the show notes. Today's lecture on inflation is really excellent and it's insane how
all the misconceptions about inflation and the tendencies of politicians that Mises discusses
in 1959 are still just as relevant today. I guess not enough people paid attention to the
(02:03):
School of Austrian Economics at that time, but hopefully now more will start to please share
these Austrian Audible lessons with your friends, family, and strangers on the internet who do not
understand that the true cause of inflation is printing money out of thin air. It's literally
what inflation means. These people can honestly benefit from the knowledge of real economics,
(02:28):
as taught by Mises and the Austrian School. You can find the links to watch or listen to the show
on all platforms by going to BitcoinPodcast.net and via the links in the show notes. If you're
enjoying the Bitcoin podcast, do me a favor and give this show a five star rating because apparently
that helps other people discover the show. And if you're listening on fountain.fm, which I personally
(02:52):
recommend, consider giving this show a boost or creating a clip of something you found interesting.
Finally, if you are a Bitcoin only company looking to sponsor the Bitcoin podcast,
hit me up via social media or by going to BitcoinPodcast.net slash sponsor. Without further ado,
let's get into lesson four from Mises six lessons. Inflation. Economic policy. Thoughts for today
(03:28):
and tomorrow by Ludwig von Mises. Fourth lecture. Inflation. If the supply of caviar were as plentiful
as the supply of potatoes, the price of caviar, that is the exchange ratio between caviar and money,
or caviar and other commodities would change considerably. In that case, one could obtain
(03:52):
caviar at a much smaller sacrifice than is required today. Likewise, if the quantity of money is
increased, the purchasing power of the monetary unit decreases and the quantity of goods that can
be obtained for one unit of this money decreases also when in the 16th century, American resources
(04:16):
of gold and silver were discovered and exploited. Enormous quantities of the precious metals
were transported to Europe. The result of this increase in the quantity of money was a general
tendency toward an upward movement of prices in Europe in the same way today. When a government
(04:37):
increases the quantity of paper money, the result is that the purchasing power of the monetary unit
begins to drop. And so prices rise. This is called inflation. Unfortunately, in the United States,
as well as in other countries, some people prefer to attribute the cause of inflation not to an
(05:00):
increase in the quantity of money, but rather to the rise in prices. However, there has never been
any serious argument against the economic interpretation of the relationship between
prices and the quantity of money, or the exchange ratio between money and other goods, commodities,
and services. Under present-day technological conditions, there is nothing easier than to
(05:26):
manufacture pieces of paper upon which certain monetary amounts are printed. In the United States,
where all the notes are of the same size, it does not cost the government more to print a bill of
a thousand dollars than it does to print a bill of one dollar. It is purely a printing procedure
that requires the same quantity of paper and ink. In the 18th century, when the first attempts were
(05:53):
made to issue banknotes and to give these banknotes the quality of legal tender, that is, the right
to be honored in exchange transactions in the same way that gold and silver pieces were honored,
the governments and nations believed that bankers had some great secret knowledge,
enabling them to produce wealth out of nothing. When the governments of the 18th century were in
(06:17):
financial difficulties, they thought all they needed was a clever banker at the head of their
financial management in order to get rid of all their difficulties. Some years before the French
Revolution, when the royalty of France was in financial trouble, the king of France sought out
a clever banker and appointed him to a high position. This man was, in every regard, the opposite of
(06:42):
the people who, up to that time, had ruled France. First of all, he was not a Frenchman. He was a
foreigner, a Swiss from Geneva, Jacques Necker. Secondly, he was not a member of the aristocracy.
He was a simple commoner. And what counted even more in 18th century France, he was not a Catholic,
(07:04):
but a Protestant. And so, Monsieur Necker, the father of the famous Madame d'Estelle, became
the minister of finance, and everyone expected him to solve the financial problems of France.
But in spite of the high degree of confidence Monsieur Necker enjoyed, the royal cash box
remained empty. Necker's greatest mistake, having been his attempt to finance aid to the American
(07:30):
colonists in their war of independence against England, without raising taxes. This was certainly
the wrong way to go about solving France's financial troubles. There can be no secret way to the
solution of the financial problems of a government. If it needs money, it has to obtain the money by
taxing its citizens, or under special conditions, by borrowing it from people who have the money.
(07:57):
But many governments, we can even say most governments, think there is another method for
getting the needed money, simply to print it. If the government wants to do something beneficial,
if, for example, it wants to build a hospital, the way to find the needed money for this project
is to tax the citizens and build the hospital out of tax revenues. Then no special price revolution
(08:24):
will occur, because when the government collects money for the construction of the hospital,
the citizens, having paid the taxes, are forced to reduce their spending. The individual taxpayer
is forced to restrict either his consumption, his investments, or his savings. The government,
appearing on the market as a buyer, replaces the individual citizen. The citizen buys less,
(08:51):
but the government buys more. The government, of course, does not always buy the same goods,
which the citizens would have bought. But on average, there occurs no rise in prices,
due to the government's construction of a hospital. I choose this example of a hospital,
precisely because sometimes people say, it makes a difference whether the government uses its money
(09:15):
for good or for bad purposes. I want to assume that the government always uses the money which it
has printed for the best possible purposes, purposes with which we all agree, for it is not
the way in which the money is spent. It is the way in which the government obtains this money,
(09:36):
and brings about those consequences we call inflation, and which most people in the world
today do not consider as beneficial. For example, without inflating, the government could use the
tax collected money for hiring new employees, or for raising the salaries of those who are already
(09:56):
in government service. Then, these people whose salaries have been increased are in a position
to buy more. When the government taxes the citizens and uses this money to increase the
salaries of government employees, the taxpayers have less to spend. But the government employees
have more, prices in general will not increase. But if the government does not use tax money
(10:21):
for this purpose, if it uses freshly printed money instead, it means that there will be people
who now have more money, while all other people still have as much as they did before. So those
who receive the newly printed money will be competing with those people who were buyers before.
(10:42):
And since there are no more commodities than there were previously, but there is more money on the
market, and since there are now people who can buy more today than they could have bought yesterday,
there will be an additional demand for the same quantity of goods. Therefore, prices will tend
to go up. This cannot be avoided, no matter what the use of this newly issued money will be. And
(11:09):
more importantly, this tendency for prices to go up will develop step by step. It is not a general
upward movement of what has been called the price level. The metaphorical expression, price level,
must never be used. When people talk of a price level, they have in mind the image of a level
(11:32):
of liquid, which goes up or down, according to the increase or decrease in its quantity,
but which, like a liquid in a tank, always rises evenly. But with prices, there is no such thing
as a level. Prices do not change to the same extent at the same time. There are always prices that
(11:55):
are changing more rapidly, rising or falling more rapidly than other prices. There is a reason for
this. Consider the case of a government employee who received the new money added to the money
supply. People do not buy today precisely the same commodities and in the same quantities as they did
yesterday. The additional money which the government has printed and introduced into the market is
(12:22):
not used for the purchase of all commodities and services. It is used for the purchase of certain
commodities, the prices of which will rise, while other commodities will still remain at the prices
that prevailed before the new money was put on the market. Therefore, when inflation starts,
(12:42):
different groups within the population are affected by this inflation in different ways.
Those groups who get the new money first gain a temporary benefit. When the government inflates
in order to wage a war, it has to buy munitions, and the first to get the additional money are the
munitions industries and the workers within those industries. These groups are now in a very
(13:07):
favorable position. They have higher profits and higher wages. Their business is moving. Why?
Because they were the first to receive the additional money and having now more money at their
disposal, they are buying and they are buying from other people who are manufacturing and selling
(13:28):
the commodities that these munitions makers want. These other people form a second group and this
second group considers inflation to be very good for business. Why not? Isn't it wonderful to sell
more? For example, the owner of a restaurant in the neighborhood of a munitions factory says,
(13:49):
it really is marvelous. The munitions workers have more money. There are many more of them now
than there were before. They are all patronizing my restaurant. I am very happy about it. He does
not see any reason to feel otherwise. The situation is this. Those people to whom the money comes
(14:10):
first now have a higher income and they can still buy many commodities and services at prices
which correspond to the previous state of the market to the condition that existed on the eve
of inflation. Therefore, they are in a very favorable position and thus inflation continues
(14:31):
step by step from one group of the population to another. And all those to whom the additional
money comes at the early state of inflation are benefited because they are buying some things
at prices still corresponding to the previous stage of the exchange ratio between money and
(14:53):
commodities. But there are other groups in the population to whom the additional money comes
much much later. These people are in an unfavorable position. Before the additional money comes to
them, they are forced to pay higher prices than they paid before, for some or practically all,
(15:13):
of the commodities they wanted to purchase, while their income has remained the same or has not
increased proportionally with prices. Consider for instance a country like the United States during
the Second World War. On the one hand inflation at that time favored the munitions workers,
the munitions industries, the manufacturers of guns, while on the other hand it worked against
(15:37):
other groups of the population. And the ones who suffered the greatest disadvantages from inflation
were the teachers and the ministers. As you know a minister is a very modest person who serves God
and must not talk too much about money. Teachers likewise are dedicated persons who are supposed
(15:58):
to think more about educating the young than about their salaries. Consequently the teachers and
ministers were among those who were most penalized by inflation for the various schools and churches
were the last to realize that they must raise salaries. When the church elders and the school
corporations finally discovered that after all one should also raise the salaries of those dedicated
(16:22):
people, the earlier losses they had suffered still remained. For a long time they had to buy
less than they did before to cut down their consumption of better and more expensive foods
and to restrict their purchase of clothing because prices had already adjusted upward
(16:42):
while their incomes, their salaries had not yet been raised. This situation has changed considerably
today at least for teachers. There are therefore always different groups in the population being
affected differently by inflation. For some of them inflation is not so bad. They even ask for a
(17:03):
continuation of it because they are the first to profit from it. We will see in the next lecture
how this unevenness in the consequences of inflation vitally affects the politics that
lead toward inflation. Under these changes brought about by inflation we have groups who are favored
and groups who are directly profiteering. I do not use the term profiteering as a reproach to
(17:29):
these people for if there is someone to blame it is the government that has established the inflation
and there are always people who favor inflation because they realize what is going on sooner
than other people do. Their special profits are due to the fact that there will necessarily be
(17:50):
unevenness in the process of inflation. The government may think that inflation as a method
of raising funds is better than taxation which is always unpopular and difficult.
In many rich and great nations legislators have often discussed for months and months
the various forms of new taxes that were necessary because the parliament had decided to increase
(18:16):
expenditures. Having discussed various methods of getting the money by taxation they finally
decided that perhaps it was better to do it by inflation but of course the word inflation was
not used. The politician in power who proceeds toward inflation does not announce I am proceeding
(18:39):
toward inflation. The technical methods employed to achieve the inflation are so complicated that
the average citizen does not realize inflation has begun. One of the biggest inflations in history
was in the German Reich after the First World War. The inflation was not so momentous during the war
it was the inflation after the war that brought about the catastrophe. The government did not say
(19:05):
via proceeding toward inflation the government simply borrowed money very indirectly from
the central bank. The government did not have to ask how the central bank would find and deliver
the money. The central bank simply printed it. The great thing about bitcoin is that we know
there will only ever be 21 million unlike the US dollar and literally every other fiat currency
(19:31):
whose maximum supply is infinity. If you want to protect yourself from fiat monetary inflation
you need to save in bitcoin and protect that bitcoin. So go to bitbox.swiss slash walker
and use promo code walker for 5% off the fully open source bitcoin only bitbox o2 hardware wallet
(19:55):
then get your bitcoin off the exchange and into your own custody. The bitbox o2 is honestly
easy as hell to use whether you are brand new to bitcoin it's your first hardware wallet
or you are a seasoned psychopath. It is bitcoin only and again it's fully open source you can
head to their github and verify for yourself there is no need to trust me plus when you go to
(20:17):
bitbox.swiss slash walker and use promo code walker not only do you get 5% off but you also
help support this podcast so thank you. Today the techniques for inflation are complicated by the
fact that there is checkbook money it involves another technique but the result is the same
with the stroke of a pen the government creates fiat money thus increasing the quantity of money
(20:44):
and credit the government simply issues the order and the fiat money is there the government does not
care at first that some people will be losers it does not care that prices will go up the legislators
say this is a wonderful system but this wonderful system has one fundamental weakness it cannot last
(21:08):
if inflation could go on forever there would be no point in telling governments they should not
inflate but the certain fact about inflation is that sooner or later it must come to an end
it is a policy that cannot last in the long run inflation comes to an end with the breakdown of
(21:29):
the currency it comes to a catastrophe to a situation like the one in Germany in 1923 on
august 1st 1914 the value of the dollar was four marks and 20 phoenix nine years and three months
later in november 1923 the dollar was pegged at 4.2 trillion marks in other words the mark was worth
(21:58):
nothing it no longer had any value some years ago a famous author john manard keens wrote in the long
run we are all dead this is certainly true i'm sorry to say but the question is how short or long
will the short run be in the 18th century there was a famous lady madame du pompadour who is credited
(22:24):
with the dictum après nous les deluges after us will come the flood madam du pompadour was happy
enough to die in the short run but her successor in office madame du bali outlived the short run and
was beheaded in the long run for many people the long run quickly becomes the short run and the longer
(22:48):
inflation goes on the sooner the short run how long can the short run last how long can a central
bank continue in inflation probably as long as people are convinced that the government sooner
or later but certainly not too late will stop printing money and thereby stop decreasing the
(23:09):
value of each unit of money when people no longer believe this when they realize that the government
will go on and on without any intention of stopping then they begin to understand that prices tomorrow
will be higher than they are today then they begin buying at any price causing prices to go up to
(23:32):
such heights that the monetary system breaks down i referred to the case of germany which the whole
world was watching many books have described the events of that time although i am not german but
in austrian i saw everything from the inside in austria conditions were not very different from those
(23:53):
in germany nor were they much different in many other european countries for several years the
german people believed that their inflation was just a temporary affair that it would soon come
to an end they believed it for almost nine years until the summer of 1923 then finally they began
(24:16):
to doubt as the inflation continued people thought it wiser to buy anything available instead of
keeping money in their pockets furthermore they reasoned that one should not give loans of money
but on the contrary that it was a very good idea to be a debtor thus inflation continued feeding
(24:37):
on itself and it went on in germany until exactly november 20th 1923 the masses had believed inflation
money to be real money but then they found out that conditions had changed at the end of the
german inflation in the fall of 1923 german factories paid their workers every morning in advance for
(25:02):
the day and the working man who came to the factory with his wife handed his wages all the millions he
got over to her immediately and the lady immediately went to a shop to buy something no matter what
she realized what most people knew at the time that overnight from one day to another the mark
(25:24):
lost 50 percent of its purchasing power money like chocolate in a hot oven was melting in the pockets
of the people this last phase of german inflation did not last long after a few days the whole
nightmare was over the mark was valueless and a new currency had to be established lord kienz the
(25:46):
same man who said that in the long run we are all dead was one of a long line of inflationist authors
of the 20th century they all wrote against the gold standard when kienz attacked the gold standard
he called it a barbarous relic and most people today consider it ridiculous to speak of a return
(26:07):
to the gold standard in the united states for instance you are considered to be more or less
of a dreamer if you say sooner or later the united states will have to return to the gold standard
yet the gold standard has one tremendous virtue the quantity of money under the gold standard
is independent of the policies of governments and political parties this is its advantage
(26:34):
it is a form of protection against spend-thrift governments if under the gold standard a government
is asked to spend money for something new the minister of finance can say and where do i get the
money tell me first how it will find the money for this additional expenditure under an inflationary
(26:55):
system nothing is simpler for the politicians to do than to order the government printing office to
provide as much money as they need for their projects under a gold standard sound government
has a much better chance its leaders can say to the people and to the politicians we can't do it
(27:15):
unless we increase taxes but under inflationary conditions people acquire the habit of looking
upon the government as an institution with limitless means at its disposal the state the government
can do anything if for instance the nation wants a new highway system the government is expected
(27:37):
to build it but where will the government get the money one could say that in the united states
today and even in the past under mckinley the republican party was more or less in favor of
sound money and of the gold standard and the democratic party was in favor of inflation of
course not a paper inflation but a silver inflation it was however a democratic president of the
(28:02):
united states president cleveland who at the end of the 1880s vetoed a decision of congress to give
a small sum about ten thousand dollars to help a community that had suffered some disaster and
president cleveland justified his veto by writing while it is the duty of the citizens to support
the government it is not the duty of the government to support the citizens this is something which
(28:28):
every statesman should write on the wall of his office to show to the people who come asking for
money i am rather embarrassed by the necessity to simplify these problems there are so many
complex problems in the monetary system and i would not have written volumes about them
if they were as simple as i am describing them here but the fundamentals are precisely these
(28:53):
if you increase the quantity of money you bring about the lowering of the purchasing power of
the monetary unit this is what people whose private affairs are unfavorably affected do not like
people who do not benefit from inflation are the ones who complain if inflation is bad and if
people realize it why has it become almost a way of life in all countries even some of the richest
(29:21):
countries suffer from this disease the united states today is certainly the richest country in the
world with the highest standard of living but when you travel in the united states you will discover
there is constant talk about inflation and about the necessity to stop it but they only talk they do
(29:42):
not act to give you some facts after the first world war great britain returned to the pre-war
gold parity of the pound that is it revalued the pound upward this increased the purchasing power
of every worker's wages in an unhampered market the nominal money wage would have fallen to compensate
(30:04):
for this and the worker's real wage would not have suffered we do not have time here to discuss
the reasons for this but the unions in great britain were unwilling to accept an adjustment
of money wage rates downward as the purchasing power of the monetary unit rose therefore real
wages were raised considerably by this monetary measure this was a serious catastrophe for england
(30:29):
because great britain is a predominantly industrial country that has to import its raw materials
have finished goods and food stuffs in order to live and has to export manufactured goods
to pay for these imports with the rise in the international value of the pound the price of
british goods rose on foreign markets and sales and exports declined great britain had in effect
(30:58):
priced itself out of the world market the unions could not be defeated you know the power of a
union today it has the right practically the privilege to resort to violence and a union
order is therefore let us say not less important than a government decree the government decree
(31:18):
is an order for the enforcement of which the enforcement apparatus of the government the
police is ready you must obey the government decree otherwise you will have difficulties with the
police unfortunately we have now in almost all countries all over the world a second power
that is in a position to exercise force the labor unions the labor unions determine wages and then
(31:43):
strike to enforce them in the same way in which the government might decree a minimum wage rate
i will not discuss the union question now i shall deal with it later i only want to establish
that it is the union policy to raise wage rates above the level they would have been on an unhampered
(32:03):
market as a result a considerable part of the potential labor force can be employed only by
people or industries that are prepared to suffer losses and since businesses are not able to keep
on suffering losses they close their doors and people become unemployed the setting of wage
(32:25):
rates above the level they would have on the unhampered market always results in the unemployment
of a considerable part of the potential labor force in great britain the result of high wage
rates enforced by the labor unions was lasting unemployment prolonged year after year millions
(32:45):
of workers were unemployed production figures dropped even experts were perplexed in this
situation the british government made a move which it considered an indispensable emergency
measure it devalued its currency the result was that the purchasing power of the money wages upon
(33:07):
which the unions had insisted was no longer the same the real wages the commodity wages were
reduced now the worker could not buy as much as he had been able to buy before even though the
nominal wage rates remained the same in this way it was thought real wage rates would return to the
(33:28):
free market levels and unemployment would disappear this measure devaluation was adopted by various
other countries by france the netherlands and belgium one country even resorted twice to this
measure within a period of one year and a half that country was Czechoslovakia it was a surreptitious
(33:50):
method let us say to thwart the power of the unions you could not call it a real success however
after a few years the people the workers even the unions began to understand what was going on
they came to realize that currency devaluation had reduced their real wages the unions had the
(34:11):
power to oppose this in many countries they inserted a clause into wage contracts providing
that money wages must go up automatically with an increase in prices this is called indexing the
unions became index conscious so this method of reducing unemployment that the government of Great
(34:32):
Britain started in 1931 which was later adopted by almost all important governments this method of
solving unemployment no longer works today in 1936 in his general theory of employment interest
and money lord keens unfortunately elevated this method the emergency measures of the period between
(34:55):
1929 and 1933 to a principle to a fundamental system of policy and he justified it by saying in effect
unemployment is bad if you want unemployment to disappear you must inflate the currency he realized
very well that wage rates can be too high for the market that is too high to make it profitable
(35:22):
for an employer to increase his workforce thus too high from the point of view of the total
working population for with wage rates imposed by unions above the market only a part of those
anxious to earn wages can obtain jobs and keens said in effect certainly mass unemployment prolonged
(35:43):
year after year is a very unsatisfactory condition but instead of suggesting that wage rates could
and should be adjusted to market conditions he said in effect if one devalues the currency
and the workers are not clever enough to realize it they will not offer resistance against a drop
(36:04):
in real wage rates as long as nominal wage rates remain the same in other words lord keens was
saying that if a man gets the same amount of sterling today as he got before the currency was
devalued he will not realize that he is in fact now getting less in old-fashioned language keens
(36:26):
proposed cheating the workers instead of declaring openly that wage rates must be adjusted to the
conditions of the market because if they are not a part of the labor force will inevitably remain
unemployed he said in effect full employment can be reached only if you have inflation cheat the
(36:47):
workers the most interesting fact however is that when his general theory was published it was no
longer possible to cheat because people had already become index conscious but the goal of full
employment remained what does full employment mean it has to do with the unhampered labor market
(37:11):
which is not manipulated by the unions or by the government on this market wage rates for every
type of labor tend to reach a point at which everybody who wants a job can get one and every
employer can hire as many workers as he needs if there is an increase in the demand for labor
the wage rate will tend to be greater and if fewer workers are needed the wage rate will tend to fall
(37:38):
the only method by which a full employment situation can be brought about is by the maintenance of an
unhampered labor market this is valid for every kind of labor and for every kind of commodity
what does a businessman do when he wants to sell a commodity for five dollars a unit
(37:58):
when he cannot sell it at that price the technical business expression in the united states is the
inventory does not move but it must move he cannot retain things because he must buy something new
fashions are changing so he sells at a lower price if he cannot sell the merchandise at five
(38:19):
dollars he must sell it at four if he cannot sell it at four he must sell it at three there is no
other choice as long as he stays in business he must suffer losses but these losses are due to
the fact that his anticipation of the market for his product was wrong it is the same with thousands
(38:41):
and thousands of young people who come every day from the agricultural districts into the city trying
to earn money it happens so in every industrial nation in the united states they come to town with
the idea that they should get say a hundred dollars a week this may be impossible so if a man cannot
(39:01):
get a job for a hundred dollars a week he must try to get a job for ninety or eighty dollars and
perhaps even less but if he were to say as the unions do one hundred dollars a week or nothing
then he might have to remain unemployed many do not mind being unemployed because the government
pays unemployment benefits out of special taxes levied on the employers which are sometimes nearly
(39:27):
as high as the wages the man would receive if he were employed because a certain group of people
believes that full employment can be attained only by inflation inflation is accepted in the
united states people are discussing the question should we have a sound currency with unemployment
(39:48):
or inflation with full employment this is in fact a very vicious analysis to deal with this problem
we must raise the question how can one improve the condition of workers and of all other groups of
the population the answer is by maintaining an unhampered labor market and thus achieving full
(40:10):
employment our dilemma is shall the market determine wage rates or shall they be determined by union
pressure and compulsion the dilemma is not shall we have inflation or unemployment this
mistaken analysis of the problem is argued in england in european industrial countries
(40:31):
and even in the united states and some people say now look even the united states is inflating
why should we not do it also to these people one should answer first of all one of the privileges
of a rich man is that he can afford to be foolish much longer than a poor man and this is the situation
(40:54):
of the united states the financial policy of the united states is very bad and getting worse
perhaps the united states can afford to be foolish a bit longer than some other countries
the most important thing to remember is that inflation is not an act of god inflation is
not a catastrophe of the elements or a disease that comes like the plague inflation is a policy
(41:21):
a deliberate policy of people who resort to inflation because they consider it to be a lesser
evil than unemployment but the fact is that in the not very long run inflation does not cure
unemployment inflation is a policy and a policy can be changed therefore there is no reason to
(41:47):
give in to inflation if one regards inflation as an evil then one has to stop inflating
one has to balance the budget of the government of course public opinion must support this the
intellectuals must help the people to understand given the support of public opinion it is certainly
(42:09):
possible for the people's elected representatives to abandon the policy of inflation we must remember
that in the long run we may all be dead and certainly will be dead but we should arrange
our earthly affairs for the short run in which we have to live in the best possible way and one
(42:32):
of the measures necessary for this purpose is to abandon inflationary policies
and that's a wrap on this Austrian audible episode of the bitcoin podcast if you are a
(42:52):
bitcoin only company interested in sponsoring the bitcoin podcast head to bitcoinpodcast.net
slash sponsor if you're enjoying the bitcoin podcast and these austrian audible readings
consider giving a five star review wherever you listen or sharing this show with your network
or don't bitcoin doesn't care but i do and i would really appreciate it you can find me on
(43:15):
noster by going to primal.net slash walker and if you want to follow the bitcoin podcast on twitter
go to at titcoin podcast and at walker america you can also find the video version of this podcast
at youtube.com slash at walker america or searching at walker america on rumble bitcoin is scarce
(43:35):
there will only ever be 21 million but bitcoin podcasts are abundant so thank you for spending
your scarce time to listen to another fucking bitcoin podcast until next time stay free
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