- Series: Cato paper
- Paperback: 158 pages
- Publisher: Cato Inst (June 1979)
- Language: English
- ISBN-10: 0932790062
- ISBN-13: 978-0932790064
- Product Dimensions: 8.4 x 5.4 x 0.5 inches
- Shipping Weight: 9.6 ounces
- Average Customer Review: 5.0 out of 5 stars See all reviews (3 customer reviews)
- Amazon Best Sellers Rank: #3,957,356 in Books (See Top 100 in Books)
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A Tiger by the Tail: The Keynesian Legacy of Inflation (Cato paper) Paperback – June, 1979
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This collection of various writings was originally published in 1972. The excerpts (sometimes fairly short) are arranged topically, such as Misuse of Aggregates; Neglect of Real for Monetary Aspects; International vs. National Policies; Wage Rigidities and Inflation, etc. Editor Sudha Shenoy contributes an Introduction, as well. The title relates to this quotation: "...it has taken twenty-five years to reach the stage where to slow down inflation produces a recession. We now have a tiger by the tail: How long can this inflation continue? If the tiger (of inflation) is freed, he will eat us up; yet if he runs faster and faster while we desperately hold on, we are STILL finished!" (Pg. 110)
Hayek says that to limit price or wage-rate increases by an incomes policy is to "freeze a particular set of price and wage-rate interrelationships" while underlying circumstances of supply and demand are continually changing. "This is like the 'stability' of a set of defective gauges perpetually pointing to the same set of readings." (Pg.Read more ›
Hayek's responses to Keynes is masterful - demonstrating how rigid wage supports bring about nasty economic bust cycles and have their ultimate end in planned economies. The long-term problem is that refusing to let wages be set like other prices, the result is wealth inequality - it is impossible to avoid. Unemployment is a WAGE problem. (p. 125) Demand can not drive prosperity (p.133)
Also highlighted in the book is the coercive nature of labor unions and how to restore justice to employment policies. This is a long section (pp 73-88)
Next to read: Petro "Labor Policy of a Free Society"