Inflation: The Price of Prosperity

Inflation: The Price of Prosperity

Inflation: The Price of Prosperity

Inflation: The Price of Prosperity

Excerpt

The book is the development of a paper which I gave to a conference in the summer of 1972 when inflation was approximately one-third its current rate. It is not addressed primarily to economists but to that ubiquitous breed, the responsible and intelligent layman. Economists have long been concerned with the problem of inflation at a technical level but it is surprising how little has been written for a wider audience. The purpose of this book is to present a comprehensive analysis of the problem in a way that those with interest but without any formal training in economics will hopefully find comprehensible.

In writing on inflation there are two pitfalls to be avoided ‐ moralism and nihilism. Some writers tend to assume that inflation is of such an evil character that it will soon destroy our whole civilization. They may be perfectly right in their judgement but the case nevertheless needs to be argued rather than assumed.

Economists have a tendency to fall into the other trap; being so absorbed with the minutae of the subject, most of all the intricacies of statistical method, they sometimes appear incapable of making statements which have a direct bearing on the affairs of the world. The extent to which I have avoided or fallen into both traps is for the reader to judge.

Although the book is intended to be a comprehensive treatment of the subject, it seeks to present a distinct viewpoint. The case which I wish to argue is that an inflation of the magnitude we are now experiencing in this country is a serious economic problem which has a disquieting effect not simply on economic life but on that of the society as a whole. In suggesting that inflation can only be adequately understood in monetary terms it is a criticism of much of the conventional wisdom on this subject. I believe that in the United Kingdom we have so completely become the prisoners of the Keynesian revolution in economic thought that we still persist in . . .

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