Common man does not speculate about the great problems. With regard to them he relies upon other people’s authority, he behaves as “every decent fellow must behave,” he is like a sheep in the herd. It.
It is the beginning of the ‘demonetization’ of the notes. The process is hastened by its panic-like character. It may be possible once, twice, perhaps even three or four times, to allay the fears of the public; but eventually the affair must run its course and then there is no longer any going back. Once the depreciation is proceeding so rapidly that sellers have to reckon with considerable losses even if they buy again as quickly as is possible, then the position of the currency is hopeless.
The collapse of an inflation policy carried to its extreme – as in the United States in 1781 and in France in 1796 – does not destroy the monetary system, but only the credit money or fiat money of the State that has overestimated the effectiveness of its own policy. The collapse emancipates commerce from etatism and establishes metallic money again.
Today the apologists of socialism are forced to distort facts and to misrepresent the manifest meaning of words when they want to make people believe in the compatibility of socialism and freedom.
Nobody ever recommended a dictatorship aiming at ends other than those he himself approved. He who advocates dictatorship always advocates the unrestricted rule of his own will, although operated by an intermediary, an amanuensis. He wants a dictator made in his own image. Now.
People without rights are always a menace to social order. Their common interest in removing such barriers unites them; they are prepared to resort to violence because by peaceable means they are unable to get what they want. Social peace is attained only when one allows all members of society to participate in democratic institutions. And this means equality of All before the Law.
Restrictionistic ideas have never met with any measure of popular sympathy except after a time of monetary depreciation when it has been necessary to decide what should take the place of the abandoned inflationary policy.
The oldest and most popular instrument of etatistic monetary policy is the official fixing of maximum prices. High prices, thinks the etatist, are not a consequence of an increase in the quantity of money, but a consequence of reprehensible activity on the part of ‘bulls’ and ‘profiteers’; it will suffice to suppress their machinations in order to ensure the cessation of the rise of prices. Thus it is made a punishable offence to demand, or even to pay, ‘excessive’ prices.
A metallic money, the augmentation or diminution of the quantity of metal available for which is independent of deliberate human intervention, is becoming the modern monetary ideal. The significance of adherence to a metallic-money system lies in the freedom of the value of money from State influence that such a system guarantees.
The attempt to restrain prices within limits has to be given up. A government that sets out to abolish market prices is inevitably driven towards the abolition of private property.
The State does not govern the market; in the market in which products are exchanged it may quite possibly be a powerful party, but nevertheless it is only one party of many, nothing more than that. All its attempts to transform the exchange-ratios between economic goods that are determined in the market can only be undertaken with the instruments of the market.
Etatism, as a theory, is the doctrine of the omnipotence of the State, and, as a policy, the attempt to regulate all mundane affairs by authoritative commandment and prohibition. The ideal society of etatism is a particular sort of socialistic community; it is usual in discussions involving this ideal society to speak of State Socialism, or, in some connexions, of Christian Socialism.
They did not suffer shipwreck because the entrepreneurs were not public-spirited, as the socialist-etatistic legend has it. They were bound to fail because the economic organization based upon division of labour and private property in the means of production can function only so long as price-determination in the market is free.
The agents of etatism have certainly not been lacking in zeal and energy. But, for all this, economic affairs cannot be kept going by magistrates and policemen.
Human actions consist always in a choice between two goods or two evils which are not deemed equivalent. Where there is perfect equivalence, man stays neutral; and no action results. But what is good and what is better, or what is bad and what is worse, is decided according to subjective standards, different with different individuals, and changing with the same individuals according to circumstances. As.
No better is the propensity, very popular nowadays, to brand supporters of other ideologies as lunatics. Psychiatrists.
The balance-of-payments theory forgets that the volume of foreign trade is completely dependent upon prices; that neither exportation nor importation can occur if there are no differences in prices to make trade profitable.
When a country has substituted credit money or fiat money for metallic money, because the legal equating of the over-issued paper and the metallic money sets in motion the mechanism described by Gresham’s Law, it is often asserted that the balance of payments determines the rate of exchange. But this also is a quite inadequate explanation. The rate of exchange is determined by the purchasing power possessed by a unit of each kind of money.
One must rather ask how much could be produced if competition among producers were abolished.
It is not the poverty of individuals and the community, not indebtedness to foreign nations, not the unfavourableness of the conditions of production, that force up the rate of exchange, but inflation.