Friday, July 12, 2013

Induced by immediate benefits...

One of history's greatest quotes (in my humble opinion) came from one of history's greatest economists, Frederich Hayek:
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

In one of my recent monetary policy rants, I picked on two self-proclaimed champions of freedom. I was reminded of them, and so many others, upon reading the last sentence of the following from Hayek's The Constitution of Liberty, which I found in Sudha R. Shenoy's collection of Hayek excerpts, A Tiger By The Tail:
It is no accident that inflationary policies are generally advocated by those who want more government control—though, unfortunately, not by them alone. The increased dependence of the individual upon government which inflation produces and the demand for more government action to which this leads may for the socialist be an argument in its favour. Those who wish to preserve freedom should recognise, however, that inflation is probably the most important single factor in that vicious circle wherein one kind of government action makes more and more government control necessary. For this reason all those who wish to stop the drift toward increasing government control should concentrate their efforts on monetary policy. There is perhaps nothing more disheartening than the fact that there are still so many intelligent and informed people who in most other respects will defend freedom and yet are induced by the immediate benefits of an expansionist policy to support what, in the long run, must destroy the foundations of a free society.

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