Is Inflation Immoral?
Book review part 2 of Idols for Destruction: The Conflict of Christian faith and American Culture by Herbert Scholssberg
In Part 1, I discussed how Scholssberg predicted the Occupy Wall Street movement's 99 percent.
I have described this book saying:
What I enjoyed so much about this book is not that I agreed with every argument Schlossberg makes, but that from page to page I would swing from whole-hearted concurrence to rabid disagreement. Schlossberg made me think, and re-think, and continue to think about issues that I had previously taken for granted. And that is the sign of a great book.
Here in Part 2, let's look at an example of agreement and disagreement from one page to the next on the issue of inflation. Scholssberg says:
Every debt that appears as a liability on one person's balance sheet appears as an asset on another's. The inflationary act that wipes out one's debt, at the same time destroys another's wealth. In this way it transfers wealth from one to another. Inflation is a process of redistribution.
Inflation has long been one of those policy issues that I happily through my hands up in the air and say, "I don't know. I'm not the expert." So I found Scholssberg's discussion very interesting. His ability to put the issue in terms of balance sheets made it much more relatable, and his argument for how government-influenced inflation is an act of wealth redistribution made me indignant.
And then I turned the page.
The modern alchemist... tries to create value ex nihilo and imitate the creative power of God... Just as idolatries of mammon imitate the creation of value out of nothing by policies of inflation, so they imitate the redemptive process with redistributive schemes.
As a believer in the free market, I have a Pavlovian reaction to cringe every time I read "redistributive schemes." But, we like the creation of value. That's one of the Biblical tenants supporting the moral justification of free market.
Being made in the image of God, we as humans have the innate desire to create and make value in the same, though more limited, way that God created the universe and made it good. This is why we value art; why we prize entrepreneurship.
So if inflation is the distribution of wealth, then it is theft and it mistakes equality of outcomes for equality of opportunity. But if it is the creation of value, then it is a by-product of the creative nature of the free market.
Can it be both? Is it one or the other? I don't know, I'm not the expert. But this an issue worth continuing to explore.
What do you think? Is inflation moral or immoral?
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I think both statements are discussing the same thing, the idea that we can have a free lunch without paying for it. The claim is that the gov't can print more money without any noticeable costs. However the value that is contained within that money does not come from nothing, it comes at the expense of everyone else who holds that money. And I don't think Mr. Schlossberg is arguing against the idea of us be creators of value similar to God but the idea that we can create from nothing. What I mean is that when we create as humans we are combining existing resources like our labor with wood to make furniture or our labor with steel to make a building. I believe Mr. Schlossberg is challenging the foundation of the belief that printing money has no costs or requires no resources to make and that power is reserved only for the Creator who created the the world from absolutely nothing. Thanks for reviewing the book!!
Well inflation is certainly not creating any kind of value, it does quite the opposite, yet Ben Bernake might argue otherwise. . I think inflation is amoral, but the philosophical implication of humans believing they have the ability to manipulate value of something like money which should in theory have in intrinsic and unchanging value could be considered immoral. Does that make sense? Dang Jaque this post is really making me think, it's fascinating. Gold Standard 2012??
That was me :)
-Elise
This also makes me think about people who try to "work" off their sins/"spiritual debt." They think they can have some sort of control over it, which they obviously don't and need Christ. It's kind of the same idea behind inflation as a faulty means to reduce debt. Doesn't work in the spiritual world or the material world ehh?
Inflation is theft. Always has been. Always will be.
In 1850 an ounce of gold bought a top of the line tailored suit. Today, in dollars, an ounce of gold buys a top of the line tailored suit. In other words, gold is a stable currency.
The printing of Federal Reserve Notes, or quantitative easing makes credit more widely available, thus creating debt. Banks benefit from the interest payments from those loans (redistribution). Meanwhile, individuals on fixed and limited incomes can no longer afford to buy a tailored suit because their dollar buys less and less.
The act of incrimental and willful reduction of the public's ability to purchase goods should be identified for what it really is. Inflation is theft. Theft is wrong.
Why has our Republic given a privately owned banking cartel (Federal Reserve) permission to rob it's citizens. This is the most central and consequential question to those of us who value free market economic theory. Theft is never FREE.
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