Books in Brief

The New Inflation, by Willard L. Thorp and Richard E. Quandt (McGraw-Hill, $5.00). The correct analysis of the inflation poison remains one of the glories of the classical economists and their followers. They knew unerringly what inflation was and is: the pumping of new money into the economy by government and its controlled banking system, i.e., a process of legalized counterfeiting. They demonstrated its effects: a disruptive rise in prices, dislocation and eventual wrecking of the currency, the instigation of the cycle of boom and depression. The “hard money” policies of classical economics have always been bitterly fought by those who benefit, in some way, from inflation: nowadays, largely bureaucrats, statist ideologues and labor unions. Periodically, the cry arises that the classical teachings have been made obsolete by “new conditions.” Such is the fallacious plea of Thorp and Quandt. Trying to explain inflation to the general reader, the authors: a) thoroughly obfuscate its nature and causes; b) belittle “tight” money restraints as ineffectual, yet strong enough to hamper growth and create unemployment, and c) support creeping inflation. Runaway inflation, it seems, simply Can’t Happen Here.

M.N. Rothbard

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The New Inflation, by Willard L. Thorp and Richard E. Quandt (McGraw-Hill, $5.00). The correct analysis of the inflation poison remains one of the glories of the classical economists and their followers. They knew unerringly what inflation was and is: the pumping of new money into the economy by government and its controlled banking system, i.e., a process of legalized counterfeiting. They demonstrated its effects: a disruptive rise in prices, dislocation and eventual wrecking of the currency, the instigation of the cycle of boom and depression. The “hard money” policies of classical economics have always been bitterly fought by those who benefit, in some way, from inflation: nowadays, largely bureaucrats, statist ideologues and labor unions. Periodically, the cry arises that the classical teachings have been made obsolete by “new conditions.” Such is the fallacious plea of Thorp and Quandt. Trying to explain inflation to the general reader, the authors: a) thoroughly obfuscate its nature and causes; b) belittle “tight” money restraints as ineffectual, yet strong enough to hamper growth and create unemployment, and c) support creeping inflation. Runaway inflation, it seems, simply Can’t Happen Here.

M.N. Rothbard