Show Voice of business John Maynard Keynes o on inflation icy Ity Arch Booth president of he the tha Chamber of Commerce of the United States Slates Today Im I'm going to be lazy and let someone else write the column This name Is John Maynard Keynes the British economist whose ideas have havel influenced l American economic policy for Cor two generations Very briefly Keynes concludes concludes con con- that governments could smooth out the peaks and valleys in the business cycle by engaging in deficit spending during recessions and running a budgetary surplus during booms The deficit spending counters recession and the surplus wards off inflation UNFORTUNATELY we learned only half of Keynes's lesson Deficit spending is very popular with politicians who like to start new federal aid programs But nut once an aid program is started it is almost impossible to end So we have followed a policy of deficit spending in both recessions recession and booms And that is the source of our present inflation Since we are arc in trouble for not paying close enough attention to Keynes Kynes I think its it's a good time timeto to read what he had to say about inflation The material is taken from his book The Economic Consequences of the Peace written after World War I Inflation tion Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency By a continuing process of it inflation lation governments can confiscate secretly and unobserved an important part of the wealth of their citizens citizen By lly this method they not only confiscate but they confiscate arbitrarily and while the process impoverishes many it actually enriches some The sight of this arbitrary rearrangement of riches strikes not only at security but at confidence in the equity of the existing distribution of wealth Those to whom the system brings windfalls beyond their deserts and even beyond their expectations or desires become profiteers who are the object of the hatred of oC the bourgeoisie whom the Inflation has impoverished not less than of oC the proletariat Lenin Lenn was certainly right There Is no subtler no surer means of overturning the existing basis of ot society than to debauch the currency The process engages all the hidden forces of ot economic law on the side of destruction and docs does itIn it itin itin in a manner which not one man manin manin manin in a million Is able to diagnose Price Controls Keynes Kenes is equally current on the topic of oC price controls The presumption of a spurious value for Cor the currency by the force of law expressed Inthe in inthe inthe the regulation of prices contains in itself however the seeds of final economic decay and soon dries up the sources of ultimate supply If a man is compelled to exchange the fruits of oC his labors for paper which as experience soon teaches him he cannot use to purchase what he required at ata a price comparable to that which he has received for his own products he will keep his produce for himself dispose of it it to his friends and neighbors as a favor or relax his efforts in producing itA it A A system of compelling the exchange of commodities at what is not their real relative value not only relaxes production but leads finally to the waste and inefficiency of oC barter II All of which goes to show that we still have a lot to learn from Keynes Keynes and and wed we'd better learn it soon |