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Inflation is NOT theft?

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myhumangetsme posted on Sun, Mar 18 2012 12:55 PM

I was wandering throughout the blogosphere and came across a blog post from J.F. Catalán where he comments on a point raised by Daniel Kuehn about inflation being theft (in commenting on an article from the Atlantic).

Daniel's pertinent comment first:

"Banks and bondholders get cheated, because their loans are repaid with inflated coin. Similarly, people with fixed savings, such as retirees, get punished for their thrift. President Grover Cleveland, a warrior against inflation (in his day, brought about by cheap silver), rightly likened a debasement of the currency to theft." This is an irresponsible set of sentences. Nobody has property rights associated with a stable value of money. [Emphasis mine] Everyone makes transactions with the understanding that the value of money changes - CERTAINLY banks and bondholders do. This is absolutely, unequivocally not "theft".

And Catalán's concurrence:  

Exactly. Inflation ought to be judged based on its consequences.


Austrians know that stabilizing the value of money is impossible.  Targeting a price level does not accomplish a stable exchange value of money.  The value of money is always in terms of other economic goods, and the value of money will constantly be changing: this is a function of changing preferences, expectations, and plans/actions.  As long our economy is a money one characterized by the pricing process, then the value of money will always be shifting.

If government-induced inflation is theft, then it is theft when someone affects prices in such a way that it reduces your purchasing power with regards to the relevant good.

The moral argument against inflation is a bad one. Stick with the consequentialist one.

Am I misunderstanding the exchange here, or did I just completely waste my time reading Inflation Is Theft?

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Government is going to do what government wants to do and to say otherwise is stupid, ignorant, or evil.  I get it.  Hear it all the time.  Just admit it's perfectly ok if government wants your life and you will submit to government attempting to murder you.

It is not ok for government to take my life and I will not submit to it.  If government wants to take my life I will resist.  What chance does one individual stand against a couple million armed service members, several hundred thousand armed police, and nuclear weapons?  Despite terrible odds it doesn't matter, I will not submit to government taking my life.

You cite government as the problem?  I cite a belief people have that government can do what it wants to do is a problem.

Neither Clayton nor I are talking about the state ought to do.  Both of us would like to see it abolished.  However, that does not change the actual power that the state holds.  Clayton already provided 2 links, and I will provide another 2:

Ex post facto law in the United States

Desperate British Government Launches Task Force Against Flea Markets

Again, neither Clayton nor I are talking about what the government ought to do.  We are just merely stating what it does do.

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Actually, the WTF is yours, I just pointed it out - you said the US government is a corporation. Then you tried to substantiate with the definitions section of USC 28. Against my better judgment, I'll spell it out for you. A definitions section of a statute or contract spells out the "full meaning" of any shorthand words or phrases used in the statute or contract so as to remove the potential for confusion or vagueness in the language while preventing the text from being any more wordy and bulky than it already is. Hence, the def'ns section of USC 28 is simply saying, "whenever the words 'United States' are used in this section, understand it to refer to one of the following: 'a Federal corporation', 'an agency, department, commission, board, or other entity of the United States' or 'an instrumentality of the United States'." It is obvious that this definitions section is not even attempting to say "the US government is a corporation", leaving aside the absurdity of trying to infer that the US government is a corporation from the definition section of one of its own statutes.

This is only for the benefit of the lurkers since I don't waste time on DHS's paid disinfo trolls.

You are so full of shit.  DHS disinfo troll?  Give me a break.

Here is the part I especially like.  When it suits YOU you say...

The law is this... and this is the context of the law... because the context of definition is limited in scope to this section....


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Thanks for pointing this out.  Not all gold does follow the rules of collectibles, though much of it does.  I do not know how gold bullion is taxed, but the purpose of bullion is typically to store wealth.  It is not typically used in everyday transactions like gold collectible coins (not that gold collectible coins are typically used either).

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It doesn't really matter if there is no provision or law or statute or whatever that gives the IRS its power.  It exists and it has power.  It doesn't matter if it has Legitimate Authority or not.  It has power, so it has Authority.  If you would like to argue with the IRS about your taxes and what not, then I wish you luck.  But if the IRS wants to, it will steamroll you.  It does not matter if it has Legitimate Authority or not.

Not going to engage in this thread anymore.  See previous post @Clayton

You two make the same argument.  The law is what the IRS says.  Law does not matter because government does what government does.

Your responses have proven my point far better than a litanty of citing legislative history ever could have.  I simply interjected in this thread I do not agree with the presumption legal tender is forced.  I suggested the problem may not be government but found in a mirror.

In the course of the ensuing discussion it has been revealed that whatver the law is does not matter.  Things like lawful authority, etc. do not matter.  The only thing that matters is believing whatever people who have the guns say.  If the IRS says this is how it is... then that is how it is.  As Clayton pointed out...




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Wealth is the sum of one’s economic goods: everything you own is your wealth. There is no formula for the calculation of wealth: it’s all of one’s property in economic goods. As such, wealth is not “calculated” in cardinal terms as mathematical calculation implies. I also never stated that wealth could be “calculated.”

Of course money is an economic good. Inflation diminishes the value (purchasing power) of the currency. This is why inflation can’t be theft: the inflating agency doesn’t aggressively seize economic goods (units of currency) from you and me; rather, inflation allows for a lesser valuation of the inflated currency as a medium of exchange.

So in arguing that inflation is theft, you must be asserting that one has property rights in the value of his economic goods or you must be asserting that the agency inflating the currency is aggressively seizing the currency from others who have property rights in the seized units of currency as a result of legitimate means (i.e. homesteading, producing, or exchange).

To this, you respond by quoting Hoppe and then stating that one steals when one is “increasing one’s own wealth at another’s expense.” This may be true when it applies to economic goods, those over which one has property rights, but no one has property rights to the value of his goods- unless, you’d like to argue otherwise. Hoppe in that instance uses wealth in the sense of purchasing power, in that the purchasing power of a currency, held by those who cannot inflate, is diminished by inflating that currency. Hoppe is saying that the inflating firm is arrogating itself greater purchasing power, by producing more units of currency on which it has an aggressively imposed monopoly, and that a consequence of this inflation is a decline in the purchasing power of those holders of the currency who do not have such capabilities. Of course, the morality of such an action is liable for scrutiny; this is not to say that such action constitutes a “theft” as I have defined it.

One is not increasing one’s wealth, as I’ve defined it, at another’s expense in inflating a currency; no one is aggressively seizing the economic goods of anyone else in doing so. A condition, whereby a currency is legal tender, has been imposed on others by the inflating firm; the same firm has aggressively acquired a monopoly on the production of this currency (without anything else, these actions constitute aggression and are argumentatively unjustifiable). This firm owns its printing presses, its ink, its paper, the labor, the plants as well as all other factors of production necessary to produce this currency.

So this firm produces $1,000 billion and exchanges these units of currency for goods in the market. These units of currency are sold to (say) a weapons manufacturer. The weapons manufacturer sells weapons to the firm. This is a voluntary interaction. Are the means for this transaction and the means (the currency) for all other transactions, trading goods against this currency by this firm, maintained by aggression? Yes. Is it possible that this new money entering the economy allows for a demand, from this inflating firm, which would otherwise not exist, positively affecting the demand curve for the goods that this weapons manufacturer produces allowing for a higher pricing of goods than would otherwise be the case? Yes. Will there be consumers that do not have access to this new money, or if they do they will have access to less of it than the inflating firm? Yes. Is there anything in this scenario that is involuntarily done? All transactions are voluntary amongst the parties involved; it is the imposition of a currency that is aggression and is argumentatively unjustifiable and all actions, including inflation, stemming from this fundamental aggression are, likewise, unjustifiable.

There is no theft occurring, at least as I defined it; wealth is not gained at another’s expense in the sense that A is aggressively seizing (theft) part or all of the economic goods (in this case, currency) from B, but in the sense that B’s economic goods are interpersonally valued less than they would be in the absence of inflation (the purchasing power has declined); A and B agree to trading terms, that are set by their interaction, voluntarily. While B may have savings denominated in the inflated currency, and he will no doubt lose purchasing power in this currency insofar as it is inflated, it is the value of his economic goods, insofar as the goods concerned are units of the inflated currency, that is declining; he is not having all or part of his economic goods (wealth) involuntarily taken (theft) from him: the value of his economic goods (specifically, currency) is declining.

John James:
Because in the context of inflation, wealth is not implicitly defined as the value of the sum of one's money.  But even still, that'sirrelevant, as you already stated in the very same instance that "Wealth is the sum of economic goods in one's possession"...unless of course you'd like to argue that money is not an economic good.

Keeping wealth as I have defined it in mind, it is very relevant to the discussion at hand that wealth be defined in terms of the total of economic goods which one possesses as this is the legitimate definition of wealth relative to the definition that I have inferred from your posts. If you are arguing that an inflating firm is stealing economic goods from consumers then this is obviously theft; however, this is not what occurs in inflation, while it is easily seen in what we recognize as taxation. Taxation is theft, indisputably, as it is a practice that is the aggressive seizure of economic goods (units of currency and/or sometimes goods that are not currency), perhaps in return for fencing of stolen goods amongst the thief and the thief’s victims (what is recognized as social policy).

What happens in inflation is that a firm, recognized as the sole producer of an aggressively imposed currency, produces more of this currency which will reduce the value (purchasing power) of all units of this currency when demanders, insofar as the inflated currency is used as a medium of exchange, for this currency are outpaced by the supplier of this currency; man has no property rights in the value of his goods, and to argue otherwise would constitute a performative contradiction, as I have briefly stated before but am willing to elaborate if necessary. By quoting that section of Hoppe’s writing, you are arguing that inflation is theft on the basis that wealth, as Hoppe uses it, includes that the values of goods can be economized and are thus a part of one’s wealth when this is not the case as I’ve stated above.

If I had a cake and ate it, it can be concluded that I do not have it anymore. HHH

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I'm with OldGuy. Too late to type up a post, though.. 

But great discussion.

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