Policy against Inflation

Policy against Inflation

Policy against Inflation

Policy against Inflation

Excerpt

When I learnt that my old friend, Lord Radcliffe, had been charged with the task of reporting on currency and credit, it occurred to me that, whether invited or not, it would be my duty to submit my views on this topic. I rather quailed; anything worth while would have to be lengthy. And then it occurred to me that, if I was indeed to undertake this arduous task, there was no reason why I should not write something for general publication.

I wrote most of this book during the summer vacation (1957), and the remainder during the autumn term. The first six chapters were written before the Bank Rate was raised to 7 per cent, and I have left the text unchanged except for two or three parentheses. It is addressed primarily to laymen who are interested in current economic problems and prepared to take some pains to inform themselves. This class, I fear, is not so large as that of those who lay down the law on what ought to be done about inflation; with them I must take my chance. I hope that my economist colleagues will find matter for interest. There are certain passages relating to the pure theory of currency and credit that they may deem to be novel, especially in Chapters 3 and 10.

Some readers may be discouraged by finding a good deal of historical matter in the earlier chapters. In currency questions I do not believe that doctrine can be divorced from history. The very expressions that we use and cannot dispense with, 'orthodox monetary policy', the 'traditional "medicine" ', 'convertibility', the 'gold standard', and 'inflation' itself, are deeply imbued with historical associations. It would hardly be possible to discourse on these matters in words having brand new definitions. And certainly the language used by financial writers has shades of meaning that can be understood only through a direct study of the past.

Furthermore, as regards the British position, as it is to-day, there are certain past events that make it altogether peculiar --

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