The Moral and Psychological Evils of Inflation

Inflationary Vice

AUGUST 8, 2022

Samuel Gregg, in his article on the French economist, Jacques Rueff, provides a timely reminder that inflation is much more than a merely economic phenomenon. It also has profound social effects. This, of course, was recognised by Keynes himself in the book that made him famous, The Economic Consequences of the Peace. He recognised that inflation functioned as a transfer wealth from creditors to debtors, thus upsetting the previous social equilibrium; and he also quoted Lenin to the effect that the debasement of the currency was a sovereign method of producing revolutionary change.

Not all inflation is equally dramatic, of course. The grandfather of a German friend of mine once owned a portfolio of mortgages on valuable properties and soon found himself in possession of pieces of paper of less value than yesterday’s newspaper. Apparently, he took this loss philosophically and never turned to political extremism; he was later sent to Buchenwald. Not everyone in these circumstances stayed sane or decent, however.

But even less catastrophic levels of inflation have profound psychological, or perhaps I should say characterological, consequences. For one thing, inflation destroys the very idea of enough, because no one can have any confidence that a monetary income that at present is adequate will not be whittled down to very little in a matter of a few years. Not everyone desires to be rich, but most people desire not to be poor, especially in old age. Unfortunately, when there is inflation, the only way to insure against poverty in old age is either to be in possession of a government-guaranteed index-linked pension (which, however, is a social injustice in itself, and may one day be undermined by statistical manipulation by a government under force of economic circumstances, partly brought about by the very existence of such pensions), or to become much richer than one would otherwise aim or desire to be. And the latter turns financial speculation from a minority into a mass pursuit, either directly or, more usually, by proxy: for not to speculate, but rather to place one’s trust in the value of money at a given modest return, is to risk impoverishment. I saw this with my own father: once prosperous, he fell by his aversion to speculation into comparative penury.

When inflation rises to a certain level, it is prudent to turn one’s money into something tangible as soon as it comes to hand, for tomorrow, as the song goes, will be too late. Everything becomes now or never.

With the concept of enough go those of modesty and humility. They are replaced by triumph and failure, the latter certain almost by definition to be the more frequent. The humble person becomes someone not laudable but careless of his future, possibly someone who will be a drain on others insofar as he has failed to make adequate provision for himself – even if, given his circumstances, it would have been impossible for him to have done so. For notwithstanding technical progress, automation, and robotics, we shall need people of humble and comparatively ill-paid employment for the foreseeable future.

Inflation plays havoc with the virtue of prudence, for what is prudence among the shifting sands of inflation? When inflation rises to a certain level, it is prudent to turn one’s money into something tangible as soon as it comes to hand, for tomorrow, as the song goes, will be too late. Everything becomes now or never. Traditional prudence becomes imprudence, or naivety, and vice versa.

Continue reading…

From Law and Liberty, here.

The Many Excuses of Harry Truman for Nuking Japan

Harry Truman and the Atomic Bomb

08/08/2022 Ralph Raico

The most spectacular episode of Harry Truman’s presidency will never be forgotten but will be forever linked to his name: the atomic bombings of Hiroshima on August 6, 1945, and of Nagasaki three days later. Probably around two hundred thousand persons were killed in the attacks and through radiation poisoning; the vast majority were civilians, including several thousand Korean workers. Twelve US Navy fliers incarcerated in a Hiroshima jail were also among the dead.1

Great controversy has always surrounded the bombings. One thing Truman insisted on from the start was that the decision to use the bombs, and the responsibility it entailed, was his. Over the years, he gave different, and contradictory, grounds for his decision. Sometimes he implied that he had acted simply out of revenge. To a clergyman who criticized him, Truman responded testily,

Nobody is more disturbed over the use of Atomic bombs than I am but I was greatly disturbed over the unwarranted attack by the Japanese on Pearl Harbor and their murder of our prisoners of war. The only language they seem to understand is the one we have been using to bombard them.2

Such reasoning will not impress anyone who fails to see how the brutality of the Japanese military could justify deadly retaliation against innocent men, women, and children. Truman doubtless was aware of this, so from time to time he advanced other pretexts. On August 9, 1945, he stated, “The world will note that the first atomic bomb was dropped on Hiroshima, a military base. That was because we wished in this first attack to avoid, insofar as possible, the killing of civilians.”3

This, however, is absurd. Pearl Harbor was a military base. Hiroshima was a city, inhabited by some three hundred thousand people, which contained military elements. In any case, since the harbor was mined and the US Navy and Air Force were in control of the waters around Japan, whatever troops were stationed in Hiroshima had been effectively neutralized.

On other occasions, Truman claimed that Hiroshima was bombed because it was an industrial center. But, as noted in the US Strategic Bombing Survey, “all major factories in Hiroshima were on the periphery of the city — and escaped serious damage.”4 The target was the center of the city. That Truman realized the kind of victims the bombs consumed is evident from his comment to his cabinet on August 10, explaining his reluctance to drop a third bomb: “The thought of wiping out another 100,000 people was too horrible,” he said; he didn’t like the idea of killing “all those kids.”5 Wiping out another one hundred thousand people … all those kids.

Moreover, the notion that Hiroshima was a major military or industrial center is implausible on the face of it. The city had remained untouched through years of devastating air attacks on the Japanese home islands, and never figured in Bomber Command’s list of the 33 primary targets.6

Thus, the rationale for the atomic bombings has come to rest on a single colossal fabrication, which has gained surprising currency — that they were necessary in order to save a half-million or more American lives. These, supposedly, are the lives that would have been lost in the planned invasion of Kyushu in December, then in the all-out invasion of Honshu the next year, if that had been needed. But the worst-case scenario for a full-scale invasion of the Japanese home islands was forty-six thousand American lives lost.7 The ridiculously inflated figure of a half-million for the potential death toll — nearly twice the total of US dead in all theaters in the Second World War — is now routinely repeated in high-school and college textbooks and bandied about by ignorant commentators. Unsurprisingly the prize for sheer fatuousness on this score goes to President George H.W. Bush, who claimed in 1991 that dropping the bomb “spared millions of American lives.”8

“The rationale for the atomic bombings has come to rest on a single colossal fabrication — that they were necessary in order to save a half-million or more American lives.”

Still, Truman’s multiple deceptions and self-deceptions are understandable, considering the horror he unleashed. It is equally understandable that the US occupation authorities censored reports from the shattered cities and did not permit films and photographs of the thousands of corpses and the frightfully mutilated survivors to reach the public.9 Otherwise, Americans — and the rest of the world — might have drawn disturbing comparisons to scenes then coming to light from the Nazi concentration camps.

The bombings were condemned as barbaric and unnecessary by high American military officers, including Eisenhower and MacArthur.10 The view of Admiral William D. Leahy, Truman’s own chief of staff, was typical:

the use of this barbarous weapon at Hiroshima and Nagasaki was of no material assistance in our war against Japan. … My own feeling was that in being the first to use it, we had adopted an ethical standard common to the barbarians of the Dark Ages. I was not taught to make wars in that fashion, and wars cannot be won by destroying women and children.11

Continue reading…

From Mises.org, here.