We have inflation again, the result of the Federal Reserve Board increasing the value of gold from the $350/ounce average from 1981 to 2001 -- to around $950 in mid-2009, as I write. That's about 200% inflation, which we see in the tripling of oil and gas prices -- and will soon see in the tripling of the price of everything else. (The recession has only retarded inflation in these areas, not ended it.)
Hazlitt, whom H.L. Mencken once called one of the few economists who could write clearly, wrote this little book in the late 1960s, as the inflationary spiral of the mid-1960s to 1981 was just beginning. It's a little gem and an excellent companion to his classic, "Economics in One Lesson."
It isn't really dated at all, as the same economic errors are repeated throughout history. Like Ron Paul today, Hazlitt insists that the only way to prevent inflation is to return to the gold standard. He writes:
"Nothing has more clearly demonstrated the need for the gold standard than its abandonment. Since that occurred, in Britain in 1931 and in the United States in 1933, the world has been plunged, both in wartime and in peacetime, into a sea of paper money and unending inflation."
Sound familiar? 1968 = 2009
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What a brillant book ! Hazlitt does a great job of explaining how inflation is developed. An increase in the supply of money and credit and the expectations of it continuing is what inflation is all about. What is incredibly scary is the this book was written in 1960.. what would Hazlitt think about today's Federal Reserve decisions? The book does a wonderful job of explaining inflation and also a great case (again) for the gold standard. One thing he does write and I don't agree is that inflation "redistributes" wealth.. HUH? Inflation hits the poor harder than the rich. So many great concepts about the economy, this book is a very good use of your time.
This short, lucid primer explains everything you need to know about the current economy.
Yes, that’s right: the current economy. For although this book was published in 1960, when the author was 65, the process of monetary inflation, which Henry Hazlitt felt was already doing so much harm to the U.S. economy and society in the 1950s, has proceeded since then almost unabated. Hazlitt died in 1993, but had he somehow survived until today, he would no doubt be depressed at our collective failure to put a stop to this entirely preventable man-made evil.
I learned about this book while reading The Golden Revolution: How to Prepare for the Coming Global Gold Standard by John Butler, in which Butler refers favorably to a simple plan proposed by Hazlitt to restore a gold backing to the U.S. dollar. Having read and enjoyed Hazlitt’s Economics In One Lesson, and being myself concerned about the runaway train of inflation, I immediately got myself a copy of this work.
While this book is not as good as Economics in One Lesson, being mainly an edited compilation of pieces from Hazlitt’s “Business Tides” column for Newsweek, it does treat the topic of inflation simply, thoroughly, and authoritatively. From the layman’s perspective, one of the many problems with inflation is that even the so-called experts–economists, businessmen, financial bureaucrats–don’t agree on the causes of inflation and indeed do not even use the word to denote the same thing. With things in such confusion, there’s no hope of coming to grips with the problem.
Milton Friedman is famous for saying “Inflation is always and everywhere a monetary phenomenon.” This appears in his 1963 book Inflation: Causes And Consequences.Read more ›
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