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What You Should Know About Inflation

The audio version of the Mises Daily Article for April 9, 2008, as read by Dr. Floy Lilley.

The book's title—What You Should Know About Inflation—only hints at the extent of the issues that Hazlitt addresses. He presents the Austrian theory of money in the clearest possible terms, and contrasts it with the fallacies of government management. He takes on not only the Keynesians but also the monetarists, as well as anyone who believes that government debt accumulation and manipulation of interest rates are harmless.

So this book is about far more than inflation. He touches on a wide variety of macroeconomic topics, any area of economic policy that is related to the monetary regime, including budget and trade issues, as well has the economic history of inflation.

Neither does he neglect the moral cost of inflation:

It is not merely that inflation breeds dishonesty in a nation. Inflation is itself a dishonest act on the part of government, and sets the example for private citizens. When modern governments inflate by increasing the paper-money supply, directly or indirectly, they do in principle what kings once did when they clipped coins. Diluting the money supply with paper is the moral equivalent of diluting the milk supply with water. Notwithstanding all the pious pretenses of governments that inflation is some evil visitation from without, inflation is practically always the result of deliberate governmental policy.

Particularly interesting is the final section of the book in which Hazlitt critiques various proposals for monetary reform and then presents his view.

What is Hazlitt's own idea for monetary reform? He wants competitive monies, which he believes will be based in precious metal. He doesn't demand that governments get out of the monetary business altogether but merely that government permit everyone to choose to use any money and make any form of contract.

Hazlitt lays out a scenario that he believes will lead to a 100 percent gold standard rooted in private coinage. In effect, he argues that private markets can do for money what private services have done to a whole host of government ones: outcompete and displace them.

It is a challenging thesis, particularly because it doesn't depend on any reform other than freeing the market.

  1. What Inflation is
  2. Some Qualifications
  3. Some Popular Fallacies
  4. A Twenty-Year Record
  5. False Remedy: Price Fixing
  6. The Cure for Inflation
  7. Inflation Has Two Faces
  8. What 'Monetary Management' Means
  9. Gold Goes With Inflation
  10. In Dispraise of PAper
  11. The Cure for Inflation
  12. Inflation and High Costs
  13. Is Inflation a Blessing?
  14. Why Return to Gold
  15. Gold Means Good Faith
  16. What Price for Gold?
  17. The Dollar-Gold Ratio
  18. Lessons of the Greenbacks
  19. The Black Market Test
  20. How to Return to Gold
  21. Some Errors of Inflationists
  22. Selective Credit Control
  23. Must We Ration Credit?
  24. Money and Goods
  25. The Great Swindle
  26. Easy Money = Inflation
  27. Cost-Push Inflation?
  28. Contradictory Goals
  29. Administered Inflation
  30. Easy Money has an End
  31. Can Inflation Merely Creep?
  32. How to Wipe Out Debt
  33. The Cost-Price Squeeze
  34. The Employment Act of 1946
  35. Inflate? Or Adjust?
  36. Deficits vs. Jobs
  37. Why Cheap Money Fails
  38. How to Control Credit
  39. Who Makes Inflation?
  40. Inflation as a Policy
  41. The Open Conspiracy
  42. How the Spiral Spins
  43. Inflation vs. Morality
  44. How Can You Beat Inflation?
  45. The ABC of Inflation

From: Audio Mises Daily , Wednesday, April 09, 2008 by

Available for download as Mp3 .

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