By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
Interpretation
Inflation allows governments to reduce the purchasing power of money, effectively taking wealth from citizens without direct taxation.
In this quote, John Maynard Keynes highlights how inflation, when uncontrolled, can erode the value of money, leading to a silent appropriation of wealth from individuals to the government. This process occurs gradually and often goes unnoticed by the public, making it a subtle yet significant means of fiscal policy that can impact citizens' economic well-being.
In practice
This quote can be used in a lecture on economic policies and their effects on citizens.
As time goes on, I get more and more convinced that the right method of investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes.
The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is generally understood. Indeed, the world is ruled by little else.
The disruptive powers of excessive national fecundity may have played a greater part in bursting the bonds of convention than either the power of ideas or the errors of autocracy.
We will not have any more crashes in our time.
This long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.
The book, as it stands, seems to me to be one of the most frightful muddles I have ever read, with scarcely a sound proposition in it beginning with page 45 [Hayek provided historical background up to page 45; after that came his theoretical model], and yet it remains a book of some interest, which is likely to leave its mark on the mind of the reader. It is an extraordinary example of how, starting with a mistake, a remorseless logician can end up in bedlam.
Bankruptcy exposes the economic vulnerability and insecurity of middle class women.
If the practice persists of covering government deficits with the issue of notes, then the day will come without fail, sooner or later, when the monetary systems of those nations pursuing this course will break down completely. The purchasing power of the monetary unit will decline more and more, until finally it disappears completely.
If we want corporations to act differently, we have to force them to do so through laws that are fully enforced and through penalties higher than the economic benefits of thwarting the laws.
One of the things that happens when you have austerity is that wages get lower, and some people think lower wages in the short run can increase corporate profits.
It had been held that the economic system, any capitalist system, found its equilibrium at full employment. Left to itself, it was thus that it came to rest. Idle men and idle plant were an aberration, a wholly temporary failing. Keynes showed that the modern economy could as well find its equilibrium with continuing, serious unemployment. Its perfectly normal tendency was to what economists have since come to call an underemployment equilibrium.
The powers of financial capitalism had a far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences.
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