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.
Long-term unemployment can make any worker progressively less employable, even after the economy strengthens.
Yes, over the centuries economic progress has reduced some gross disparities - modern Americans are relatively unlikely to simply starve to death (though it can happen), so in that sense the gap between rich and poor has narrowed. But the question isn't whether society is, in some sense, more equal than it was in 1900. It's whether it is radically more unequal than it was in 1970. And of course it is.
The rich have markets, the poor have bureaucrats.
Credit is a promise to deliver money. It will produce GDP but you'll create credit... So you reach a certain point that that you can't do that anymore... There are choices. And how do we best support, apportion the money? How much is going to be transferred?
Economy consists in a due and proper application of the means afforded according to the ability of the employer and the situation chosen; care being taken that the expenditure is prudently conducted.
No nation was ever ruined by trade.
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