Deflation and Liberty [Jorg Guido Hulsmann] on *FREE* shipping on qualifying offers. This monograph addresses a critically important issue: the. Deflation and Liberty has 74 ratings and 4 reviews. Marcus said: This is a pretty good defense against anti-deflationary (inflationary) policies. I was h. Deflation is not inherently bad. It creates winners and losers. It also puts a temporary break on the concentration of power in the hands of government and in.

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In their eyes, the qnd against deflation is so clear that they do not even bother about it. Then there is the fear factor. Paper money has produced several great crises, each of which turned out to be more severe than the preceding one.

In light of the principle discovered by the classical economists, we can say that deflation is certainly not what it is commonly alleged to be: Private households with mortgages and other considerable debts to pay back go bankrupt, because with the decline of money prices their monetary income declines, too, whereas their debts remain at the nominal level.

Deflation and Liberty

The essay covers wnd surprisingly vast theoretical territory in a short space, including the nature of money and interest, the boom and bust, the impossibility of stabilization measures, and the economic tends of the recession.

Neither does our contention necessarily apply to credit moneys, such as the paper pound during the Napoleonic Wars. The foregoing three scenarios probably cover most historical cases in which inflation has been brought to an end.

Deflation is certainly not some sort of a reversal of a previous inflation that repairs the harm done in prior redistributions. And all other owners of money, whether they are entrepreneurs or workers, are harmed too, because their money now has a hhulsmann purchasing power than it would otherwise have had. Why hold any substantial cash balances if the central bank stands ready to lend you any amount that might be needed, at a moment’s notice?

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It’s hard in such a short book to counter the thousands of pages of Keynesian economics that encourage hulsmanj, but for what it is, Deflation and Liberty does a pretty good job.

The first step to endorsing and promoting this strategy is to realize that governments do not—indeed cannot—fulfill any positive role whatever through the control of our money. It dampens the growth of the welfare state, if it does not lead to its outright implosion.

Both definitions deviate from the most widespread connotation of the term, according to which inflation is an ahd of the money price level. Apr 17, Libertty rated it really liked it Shelves: And the erroneous calculations are also reflected in not caused by a below-equilibrium interest rate. And the federal government can constantly expand its activities and finance them through additional debt even if there is no prospect at all that these debts will ever be paid back out of tax revenues.

It not only brings the inflated monetary system back to rock bottom, it brings the entire society back in touch with the real world, because it destroys the economic basis of the social engineers, spin doctors, and brain washers. But it is time that the friends of liberty change their minds on the crucial issue of deflation.

False thinking on this point has given our governments undue leeway, of which they have made ample and bad use. There are therefore short-run benefits for certain members of society, but these benefits are balanced by short-run losses for other citizens.

The point is that such increases or decreases should not be mistaken to benefit society as a whole. Besides, I had to catch up with the indefatigable Mises Circle at UT group, which read and discussed Deflation and Liberty a few weeks ago. This attenuates the thesis of Jacques Rueff that the gold-exchange standard introduced something like a quantum-leap deterioration into the international monetary system.


Wages are deflatipn only to the extent that the workers choose not to work. In diametric contrast, all that can be said of it on this count is that a few state agents are slowly starting to ascertain and only roughly what it is several years after its launch].

No trivia or quizzes yet. In particular, when it came to monetary reform, both Mises and Rothbard championed schemes to redefine a paper currency’s price of gold to restore convertibility.

Deflation and Liberty | Mises Institute

This is a pretty good defense against anti-deflationary inflationary policies. At the beginning of the 20th century, most firms and industrial corporations were financed out of their revenues, and banks and other financial intermediaries played only a subordinate role.

Most economists backed off from opposing inflation precisely when libertt was needed most, namely, at the few junctures of history when the libery system was about to collapse.

Ryan rated it liked it Aug 04, This fact is the unshakable starting point for any sound reflection on monetary matters.

A short Bitcoin commentary on “Deflation and Liberty” — Konrad S. Graf

The concomitant drastic reduction of the money supply entails a corresponding decrease of money prices, which negatively affects all market participants who have financed their operations through debt. As a previous reviewer noted, this sadly does not talk much about what prevents prevents deflationary spirals from going haywire.

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