Friday, October 16, 2015

On the Causes of Inflation

"Just before winter sets in, the butterflies are most active."

"Can anyone deny the beauty of a butterfly? Or of the flowers on which it depends?"

Those are the words of Commandant Izu, a character in my work in progress, Our Lady of Kaifeng: Courtyard of the Happy Way. 

Does observing the beauty of the seasons help diminish suffering in the present? Do governments nudge those under their power by giving them things or taking things away? Should we be thankful for what we have, and if we are very full of gratitude for the little we have, will this ensure that we are compliant and do not rebel?

Of course, inflation is a massive government engineered nudge to force people to spend, rather than save money. But is that  merely a psychological manipulation? Can a single, isolated consumer resist the need to spend more on staple goods once the currency is inflated? Does scarcity cause prices to go up? Can rationing keep prices down?  Is the price of food higher because of inflation, or do we cause inflation ourselves when we spend more and more on the same foods? If we tried hard enough, could we just refuse to spend the money?

If the intended effect of food rationing is a fixed price on goods, can this intended effect ever be achieved, given that for every forbidden fruit, there exists a black market, where it can be purchased, if the price is right?

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  1. We do have to watch out for things. This posts does put things more on the radar, so to speak.