George Reisman on Inflation

I found the following succinct summary of the evil of inflation in George Reisman’s essay “Production versus Consumption”:

… for everyone who spends newly created money and thereby obtains goods and services, there must be others who suffer a corresponding loss. Their loss […] takes the form either of a depletion of their capital, a diminution of their consumption, or a lack of reward for the added labor they perform – a loss precisely corresponding to the goods and services obtained by the buyers who do not produce.

I hope I do not have to repeat how this applies to “fractional reserve banking”.

Another gem from the same essay:

Where nothing in reality will serve, the consumptionist [Keynesian] is highly adept at bringing forth totally imaginary causes of economic catastrophe.

Such as the economic catastrophe Paul Krugman claims will take place, if we don’t go to war with aliens.


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