"Repressed Inflation": The Ailment of the Modern Economy
We have a vivid memory of this process in the case of prohibition in America, and we know that legislation of this kind in the end becomes a poisonous source of corruption. Can anyone seriously believe that what did not succeed in the case of drink is likely to succeed in the case of inflation, that is, simply to forbid it? FULL ARTICLE
Comments (15)
Free to choose
Inflation and collectivism is a recurring theme in economics although many times it takes different names. There is no country I can think of that has prospered during inflation, because too much productive energy and creative talent is redirected to thinking of ways to minimize erosion of value.
Published: June 26, 2009 8:24 AM
Dick Fox
What a frightening article. Imagine how bad things would have gotten if Roosevelt had lived? Now look at where we are. Röpke paints a picture of what happens if people never see the danger of collectivism. There is finally chaos where where there is a "virtual absence of any economic order whatever, whether of the free-enterprise or the collectivist kind," to quote Röpke. Is this our fate?
Published: June 26, 2009 8:47 AM
Yancey Ward
A great essay that clearly identifies the psychological Catch 22 price controllers think they are caught in. Ropke may have been correct that some number of them are happy for the misery that increases their power, but I think most are simply economically illiterate- on a par with the price controllers of today (witness the push for controls in medical care).
One other thing, the dates of first publication are probably off by a decade. I am guessing this was first published in 1951 rather than 41.
Published: June 26, 2009 9:19 AM
Ben Ranson
Mr. Ward is correct. The publication date is certainly off.
Published: June 26, 2009 9:52 AM
greg
Around 1900, a loaf of bread cost $.05, today it cost $2.50.
During that same period, productivity has increased approximately 1000 times.
If there was no inflation over that period, you should be able to buy 200 loaves for $.01.
Which world would you be better off, bread at $2.50 or 200 for a penny?
Published: June 26, 2009 11:15 AM
Matt R.
Great article. I look forward to reading some of his books, which are available through this website. It's eerie just how accurate Roepke, Mises, Menger, etc. were.
Published: June 26, 2009 1:34 PM
BioTube
I forget who said it, but he was right.
Published: June 26, 2009 6:11 PM
newson
george santayana.
Published: June 26, 2009 7:41 PM
Catou
The new collectivism today is environmentalism. Once again, as was prohibition, it will be sold as "good for the people" but really, it is repressed inflation as the goods and services provided using carbon emitting processes will be more expensive. Very clever trick. So far, our government (in Canada) is resisting this delusion but as with everything else, they will fall in line with the Americans.
Published: June 26, 2009 8:03 PM
newson
the australian labour government has just closed "grocery choice", its doomed attempt to rationally monitor grocery prices. thousands of supermarkets, each with tens of thousands of items, and prices in constant flux, made the process unworkable. (the initiative was launched to public acclaim, in the context of strongly rising retail prices for essentials).
homework for the "competition minister" craig emerson: hayek/mises/röpke.
Published: June 26, 2009 8:11 PM
N. Joseph Potts
How can this article have been published in 1941? It refers to England having "emerged from the war," and cites an issue of Lloyd's Review dated 1946.
Maybe I'm anal-retentive, but I find the exact date of writing/publication CRITICAL, particularly in the purported period, to the meaning of what is being said. I wonder if the BOOK (Against the Tide) also reflects this gross error?
Published: June 26, 2009 8:21 PM
BK Marcus
Joe, the actual date is 1947. It's clear to the human eye in the PDF, but a scanning error rendered it as 1941 in the text export. I've fixed the date in the Mises Daily. We'll have to update the PDF as well. Thanks for catching this.
BK
Published: June 26, 2009 9:10 PM
I Hate Governments
I never ceases to amaze me that all those antiquated Mises and Rothbard articles read as if they were just fresh written today.
You read them and you could swear it was a few hours ago. All their political and economic articles sound, look and feel like current news.
I am always shocked when I learn they were written several decades ago.
What have humanity done in the past 70 years ???
It would seem that in the past 70 years, we have made no progress at all.
Humanity is stupid and repeats the same mistakes over and over again with the hope it will change. We don't learn from history and we will repeat it over and over again.
Published: June 27, 2009 8:43 PM
Gil
Well that is a good point, I Hate.
Published: June 27, 2009 10:42 PM
Patrick Barron
This article could not have been first published in 1941, because it recounts the events in immediate post-war Europe. I think it was written in 1947 or early 1948, because it quotes from article of that time frame yet does not take into account Ludwig Erhardt's economic reforms of 1948, which followed Professor Ropke's prescpription and led to the German "economic miracle." Nothing really miraculous about it at all--just freedom at work.
Published: July 4, 2009 7:54 AM