2. INFLATION IS ...

Necronomics describes the economic, political and social laws that are necrosing our civilization. Of course, the vast majority of these rules are not recognized as being harmful to the human environment. If they were, people would reject the rules. The elimination of necronomics requires an understanding of why people observe laws that are enviable for themselves and their world.

Among the reasons for the continued belief in circumspect laws is the existence of cogent arguments grounded in unrecognized falsehoods. If the basics are wrong then the conclusions will be wrong even if the intermediate logic is correct. An example of an applaudable argument is that we must stop inflation. If the general definition of inflation is incorrect or misleading, however, the efforts to stop inflation might actually worsen human suffering.

This chapter analyzes the nature of inflation, for many of the anti-inflationary actions of economic policy-makers are actually worsening the suffering from inflation. Recessions and unemployment are incorrectly used to fight inflation. With a more accurate under standing of inflation, viable laws will replace necrotic policy- making. Each president claims to have whipped inflation. However, when you have read the next two chapters, you will recognize that inflationary suffering is not stopped by mutating suffering from price rises into unemployment rises. Furthermore, inflation is not put to rest by exporting inflation as is described in "monetary colonialism," a later chapter.

What is inflation? Take your choice. New definitions arise everyday. Defining inflation is increasingly important as more and more people continue to suffer its effects.

The elimination of inflation will not occur without an inclusive definition, one which embraces the various definitions and explanations for inflation. In order to cull the common denominator, a listing is needed of some existing views, no matter how obscure or esoteric. The following subsections step through old and new definitions. Common to all of the definitions is a loss or suffering for persons, both individually and collectively.

The Classical Definition?

Classically defined, inflation is "an increase in the amount of money in circulation, resulting in a relatively sharp and sudden fall in its value and rise in prices." Is this definition sufficient to explain price rises? "Yes" would be the answer of the monetarists.

Monetarists are the group of economists who explain an economy in terms of money. The best known monetarist is Milton Friedman who received a Nobel Prize for his monetary theories in 1976. There is probably no private economist who has more impact on national thinking than Professor Friedman, whose popularity was a result, in part, of his book and television series, "Free to Choose."

Friedman definitely believes in the classical definition of inflation. He has said that "ultimately, inflation is a monetary phenomenon--nothing else." Using this definition, Friedman argues for controlling the money supply as the way to stop inflation.

Friedman's monetarist's definition and solution should not be taken lightly. A declared monetarist heads the Federal Reserve System, Paul Volcker. He has used a policy of tight money in an effort to wring inflation out of the economy. The necrotic implication of the monetarist's definition is the high interest rates that result from a tight money policy. High interest rates cause an on- going economic slump that signals the beginning of a depression in production and employment.

The classical definition used by the monetarists is insufficient: all forms of inflation are not accounted for. Inflation can and does occur if the money supply does not change at all. If a shortage develops relative to the demand, inflation will also occur. Price rises occur each time that a freeze destroys Floridian fruit, as happened in Winter 1982, or when farmers cut crops and herds because of high interest rates on carrying their inventory.

A Shortage Of Products?

The references to Florida and farmers describe a form of inflation ignored by the major economic voices in politics: shortage inflation. Shortage inflation--the development of shortages relative to the demand--actually encompasses the classical definition. The inflation from an expansion of money--the classical definition--is synonymously a lagging of or shortage of production relative to the demand of the money supply.

With classical inflation, the money supply outstrips the product availability. As such, the classical definition actually is a subcase of shortage inflation. Shortage inflation results not only from the problem of an unproductive expansion of the money supply, but other problems, e.g., production recession or product hoarding. The product shortage can be general or specific within a population.

The Cost Of Unsolved Problems?

"The cost of unsolved problems" is a good general definition of inflation. Someone has to pay for unsolved problems. Invariably and unavoidably, the cost of problems is shared by all people: Problem sufferers add the cost on to the price of their goods and services. Among the human problems growing in cost are:

government bureaucracy, private bureaucracy, price-gouging, hoarding, corruption, theft and vandalism.

From these examples and this general definition of inflation, one can conclude something about the nature of inflation: Inflation is synonymous with cheapening.

An increase in the quantity and quality of problems cheapens the value of life. This is mirrored in how currency inflation is a cheapening of the currency, a cheapening of the individual units and collective whole. Investigating the origin of the word inflation, one finds the origin to be similar to the words "flatulence" and "flattery"; both words convey an inflation or cheapening of the real sub stance.

The longer that problems remain unsolved, the longer people have to pay for them. It doesn't matter whether the problems are personal, interpersonal, or natural problems. Someone has to pay. Furthermore, if the quantity and quality of problems are increasing within a society, the cost of these problems will rise. Regardless of the source, the cost of the problems will show up in rising cost of goods and services as people pass on the cost.

Our general definition of inflation includes the previous definitions of inflation: money expansion or product shortages. As such it is a better definition of inflation than the classical or shortage definition. This general definition--the cost of unsolved problems-- also includes all the following subsections which will describe different causes and definitions of human inflation. A more inclusive, existential definition is described last:

Inflation is the theft, loss, or destruction of time, the basic commodity of life.

There is a simple, sweet parallel between inflation as a cheapening of one's currency and inflation as the cost of unsolved problems. One receives currency based on what his time is "currently" worth, that is, one's earnings in money symbolize one's time. The cheapening of one's currency is actually a cheapening of one's time. Similarly, what is a problem but something that cheapens one's time? This parallel is returned to and expanded upon throughout this book.

The Economically Over-privileged?

Inflation occurs on an individual basis if someone gets more buying power without having increased his production. It is a instance of the classical definition of inflation: an increase in money (buying power) without an increase in production of goods or services. As such, the person is economically over-privileged relative to his productive worth.

An example of an economically over-privileged person is a thief. He causes inflationary losses for those who suffer a shortage of products due to his theft. Thieving ways can be in actions that are recognized as illegal or in perfectly legal ways. For instance, an economically over-privileged thief often results from bribing a politician for a non-productive tax-break, tax-support, or business regulation. The special interest of a politician is often a person who effectively steals the wealth of others through the law process.

Inflationarily, the effect is the same whether one steals or seeks political favoritism. All thieves have increased their buying power without having increased their production of goods or services. All have become economically over-privileged relative to their worth to the production or creation of new wealth. This is a logical truth that transcends the corrupt "legalities" that arise when politicians corrupt the truths to inflationarily benefit a few.

The economically over-privileged may produce some good or service; however, they are underproducers relative to the wealth which they possess. The stereotyped welfare queen who collects government support under different names is over-privileged relative to what she produces. Similarly, a certain ex-governor of California was an over- privileged person when he did not pay any taxes in 1970.

Ironically, this governor--Ronald Reagan--was elected to the Presidency, in part, because he belabored the existence of some welfare queens; yet, his personal dollar gain through tax-escapement was greater than the average well-fared person.

The average tax-paying citizens had to pay more taxes because of Reagan's tax-avoidance than they had to pay for the average tax- supported well-fared person. Said another way, should an over-taxed person prefer the elimination of a well-fared person receiving $3000 dollars in tax-supports or the well-fixed person receiving $1 million in tax-exemptions? In 1982, the estimated federal cost of welfare was $21 billion while tax-exemptions amounted to $229 billion.

These comparison figures show that the overtaxed citizen is wasting his energy if he is protesting high taxes by attacking the well- fared. The taxpayer should concentrate his efforts on stopping the rise of tax-exemptions, for tax-exemptions increased by 343 percent in the 1970's while outlays for welfare increased only 131 percent.

Being recipients of unproduced wealth, both the well-fared and well-fixed are "underproducers". They produce less than they receive, consume or own. Through the modern politicians, the well-fared and well-fixed are recipients of non-produced wealth. Their inflationary income is the inflationary lost of the tax-payers.

The non-produced wealth is legally extracted from the undercompensated producers at all levels of production, from the professional entrepreneur to the unskilled worker. On a per producer basis, which type of tax-support costs the worker most: the well-fared or the well-fixed? Said another way, toward which should the overtaxed producers reserve their anger?

The general inflation rate--the CPI or Consumer Price Index--is an index of individual inflationary gains as well as the simultaneous inflationary losses. In a zero-sum world, instances of the economically over-privileged necessitate the economically under-privileged. People suffer inflationary losses to those who acquire inflationary returns.

Inflationary returns cannot occur without inflationary losses. Something cannot be acquired from nothing. Someone had to give up the something.

Who are the economically underprivileged that suffer the inflationary losses that are consumed and owned by the well-fared and the well-fixed? The losers are the well-wells, as in "Well, well, that's too bad." The well-wells lose their wealth through the law process because they allow the less productive, better organized people to dominate the attention and action of the politicians.

The average citizen does not have the privilege of consuming and owning as much as they produce, manufacture, create or service. By definition, oppositely, the well-fixed and the well-fared consume more than they produce. This consumption comes from the sweat and the effort of the productive citizens who have less to own and consume as a result. This book is essentially addressed to the "well-wells": only from them can corrections be expected. The well-fixed seemingly prefer privileges over principles, and the well-fared lack one or all of the following: opportunities, gumption, or incentives.

In summary on the economically over-privileged, there are two groups of people who consume more goods and services than they pro duce. One group is the well-fared, the other is the well-fixed. Both groups are recipients of inflationary income, for they consistently have an increase in money without a corresponding increase in their personal production of goods or services. The products which they consume come from the productive individuals.

A Rising Population?

As a result of a growing population, a nation can have a problem with inflation. Regardless of changes in the money supply, if production of goods and services does not keep pace with the population growth, inflation will result. This is a sub-definition of shortage inflation where production lags behind demand. Unchecked population growth is accompanied by rising inflation. Burgeoning populations contribute to the inflation of Mexico and Egypt.

Misdirected Production?

Inflation plagues a people when production is misdirected. Consider the impact on the production system when people become obsessed with tulips (Holland, 1600's) or precious metals (Spain, 1500's; America, 1980's). Inflation would occur in those areas from which human time and effort were drained, e.g., essential production. The reduced production would generate inflation in areas where the people were previously producing goods and services. Shortage inflation in specific production would be the result of the problem of misdirected production, of misdirected human resources or capital.

During the 1500's and 1600's, Europe suffered inflation in essential goods and services. Part of the reason was the inflationary Tulip bubble: farmers converted fields from grain production to tulip production. More importantly, however, was the influx of precious metals stolen from the New World by conquistadors and pirates. In the hands of the Old World thieves, the gold and silver were used to misdirect human resources into a whole range of counterproductive activity.

At the time, Spain viewed its new wealth as the means to a great empire through elaborate palaces and a huge Armada. However, the building of these tools came at the expense of essential production on which the Spanish economy rested. Shortage inflation increased which undermined Spain's attempt at greatness through elaborate tools. (There's a lesson in what happened to Spain for modern politicians who think world greatness can come from a strong military without a sound economy.)

Misdirected Busytime?

If a person decides to go into the business of thievery, he will consume products while not producing any. Compared to a person keeping busy at producing some more useful good or service, thieves generate inflation within the society--shortages relative to the demand. The shortage inflation from thieves is a combination of the misdirected busytime and the products stolen.

"Busytime" references the time we spend in earning a living: How we keep busy. It is synonymous with employment or work. It is preferred within this book because it is increasingly crucial for people to pause and reflect on whether their employment is productive or, in fact, counterproductive. People need to consider more often the comment by Thoreau, "Of course, we're busy, but what are we busy at?" By using the words busytime, busywork, and busyness, (sic "business") it is hoped that people will now question just what they are busy at, e.g., short-term gain that is nurturing complete long- term loss.

Shortage inflation will occur, similarly, if politicians use tax dollars to program makeshift busywork for the unemployed. Likewise, if the government stimulates higher income from non-production businesses to the detriment of production businesses, shortage inflation will result from this form of misdirected busytime. An example of the latter would be if a government gave tax-incentives to high-tech firms producing non-essential items when the farmers are receiving no comparable incentives.

A Cancerous Distortion Of Production?

Inflation occurs when any production is expanded at the expense of other products, especially at the expense of essential goods and services. One historical example is the Roman emperors who liked hummingbird tongues for dinner. All the time spent catching and amassing hummingbird tongues negatively affected the production of foodstocks, products that would have fed more people for each hour of spent production time.

The hummingbird example reflects a cancerous expansion of non- essential goods and services at the expense of essential production. By draining human resources from essential production, the non- or less-essential cancerously causes a dying system of production. Another example from ancient Rome was the glorification and over- payment for the services of the habitual entertainers--the gladiators.

These examples reflect the growth of certain production at the expense of other production. This imbalance production is analogous to a cancer within a human body. A cancer monopolizes the resources of other parts until the whole biological system of production collapses. Through the law process and tax system, politicians similarly imbalance the system of production, e.g., more tax credits for video arcade machines than farm equipment.

In the late 1970's, high-technology became the legislative "darlings in Washington" as law-makers sought to use the tax-system to spur research and development. In particular, a twenty-five per cent tax-credit was authorized for R+D, but the direction of technological development was not certified. The politicians failed to considered the effect on basic industries when non-essential high- technology is infused with tax-credits. Evidence for the non- essential nature of this technology is the label given the politicians who push the tax incentive laws: Atari Democrats. These economic policy-makers did not appreciate how the basic industries cannot use tax-credits for research and development. The most obvious support for this previous statement is how the basic industries are the ones that are selling tax credits through the controversial leaseback tax law. Ford Motor Company is selling its unused tax-credits to the likes of IBM, Exxon, Prudential. Basic industries are selling their tax-credits because they cannot use them.

Can there be little wonder why investors avoid the machine manufacturers like International Harvester in preference for the Atari's? The politicians have structured the tax system to ignore basic needs. If this legal decapitation of essential production is not reversed, people will have cheap games with increasingly expensive foods. Levels of production and productivity cannot be maintained in food growing, processing, transportation and marketing with the present tax system.

Declining Productivity?

Inflation plagues a population when productivity falls. Without a change in the work force size, shortage inflation would occur if worker productivity were halved. It would be the same as if half the work force turned to some non-production business. Either way, production and products would be in short supply compared to the demand.

The role of productivity upon prices is recognized by traditional economists. A 1% rise in productivity will lower prices by 2%, by some estimates. Oppositely, if productivity falls, one should expect prices to rise. Pro-management voices like to cite the combination of increased wages without increased productivity as a cause of price rises. During the 100 years preceding 1973, productivity was improving at the rate of about 2.5% a year; however, it has since declined. The decline has continued into the eighties. The decline in productivity has perplexed and puzzled more than one economist.,

Unemployment?

Unemployment reduces production and thus, unavoidably, generates shortage inflation in the industries where the unemployment is occurring. This can be seen especially in food. Due to high interest rates, farmers, truckers, processors and retailers are cutting back on employment and production. As a result, food prices are rising, for the demand by the population has not dropped.

The gist of the previous paragraph seems contrary to certain economic statistics and policies. For instance, one indication of a recession (higher unemployment) is rising inventories and falling prices; seemingly, this refutes the position stated herein that unemployment leads to rising prices. However, one must distinguish between specific and general statistics on unemployment, inventories and prices. While the general price index was falling, food prices were rising in 1982.

In addition, the sequence of a recession shows how shortage inflation due to reduced employment and production leads to the conditions that start a new boom cycle. One of the reasons that an economy pulls out of a recession is the increased prices due to depleted inventories. These increased prices prompt investors to capitalize new production because of the widening profit margins. Once production starts up based on higher prices, these prices consistently remain at the higher prices. Thus, the initial unemployment lead to shortage inflation and higher prices.

Unemployment is not an anti-inflationary tool. Yet, many politicians and economists defend the use of unemployment and recessions as the means to control inflation. In terms of prices, unemployment leads to shortages which eventually leads to higher prices. On the basis of this analysis alone, one should have reservations about economic policy-makers advocating the use of unemployment to fight inflation.

Other analyses show how unemployment worsens rather than solves inflation. Consider the primary reason for concern with inflation, that is, prices rising faster than income. Doesn't unemployment generate conditions worse than those experienced by a retired person on a fixed pension? On a personal basis, unemployment is a condition where prices suddenly explode compared to one's income: One has a fixed income of zero dollars. The price-income gap of the unemployed person is much greater than an employed or retired person.

If confronted with the above proposition, many people will agree that unemployment generates the worse price-income gap, but they will argue that the nation is better off in its fight against inflation as a result of a few people suffering more. They will cite the drop in the price index that comes with recessions. This argument was rejected previously in terms of how the course of a recession-boom cycle eventually leads to higher prices. It can be rejected in another way using the price-income gap.

Assume that a nation has full employment with a 4% gap between price and income increases. This means that the nation is suffering a 4% loss in its standard of living. Should the politicians use unemployment to curb this average loss of buying power to inflation? Suppose they caused 10% unemployment as a way to stabilize prices. Did they improve or worsen the national price-income gap?

On a national basis, the average standard of living will have decreased. Whereas 90% of the population will now have a 0% income- price gap, 10% will have a 100% income-price gap. Averaging the new individual losses among the nation's citizens reveals that the actual inflationary losses per capita is now 10%.

Two things can be concluded from the previous analysis of unemployment as the worse kind of inflationary suffering. First of all, unemployment probably increases the average inflationary losses per capita. Secondly, the present statistics on the inflationary price- income gap are incomplete and misleading. They do not include an accurate assessment of unemployment upon the price-income gap.

A third analysis shows how unemployment worsens inflation. Previously, a drop in productivity was cited as a cause for inflation. Just as unemployment causes a explosive rise in the price-income gap, so does it cause a massive drop in productivity if one recognizes productivity per capita. However, the statistics and policies of the economic policy-makers do not reflect the productivity drop that results from unemployment.

Like the statistics on the price-income gap, productivity and efficiency data do not reveal a correct picture. Sadly, many economic policies are rationalized based on increasing productivity per active worker without regard for the per capita impact. As a result, some factories are increasing their efficiency by merely laying off some workers. While the statistical efficiency will have increased, the actual efficiency did not.

Consider the steel industry which expects to consolidate its operations so as to increase efficiency even though a 10% drop in domestic steel production is expected during the 1980's; an anticipated hitch is "higher prices and product shortages" which will force increased dependence on foreign imports. Now, really, there has to be something wrong with either the measurements of efficiency or the concept of efficiency if the drive to increase productivity results in the opposite of the proclaimed benefits of increased efficiency, namely, resulting product shortages and higher prices. The steel industry expects to increase efficiency per worker increase while letting efficiency per capita drop, i.e., a 10% decrease in production for the American system of production and the people thereof.

An analogous situation would be the family of 10 children in which the parents decided to improve their children's school performance. Suppose half the kids were performing at a "C" level, three at a "B" level and the other two at an "A" level. Suppose the parents took an "inefficient" child out of school each month so as to brag that the productivity of their children in school was improving? In eight months, the performance of their children in school would have increased to an "A" average, even though the average performance of each child within the family has dropped.

Or, suppose you were marooned on an island with ten people. Which would be a better economic policy:

Have 9 people picking one coconut a day and a hot shot picking two for a per worker and capita productivity of 1.1 coconuts
or stop the nine less efficient coconut collectors so as to increase your productivity to 2 coconuts per worker?

The resulting productivity per capita would be would be an example of decapitalism, that is, reduced production per capita by policies that remove heads (caputs) from production. Which would be a safer island to live on?

A similar situation is occurring in the family of mankind and in American industry, for one can find accounts of companies axing sub divisions that do not measure up to an arbitrary dollar return, e.g., 17%. The economic implication? Industries with an efficiency of 16% will not be producing. Total production will fall with an increase in both prices and unemployment. What kind of efficiency is this? Hari-kari? Washington policy-makers continue to improve efficiency per active worker by tolerating decapitation of production.

Unemployment reduces that productivity measurement which is more important than productivity per active worker, namely, productivity per capita. Per capita productivity is the combination of both active and inactive workers. They are synonymous if 100% of the population are active workers.

Of the two measurements, the most important is productivity per capita, since consumption per person cannot be greater than production per person. Reducing the number of workers within a population without a corresponding increase in worker productivity will cause shortage inflation.

In summary on unemployment, it is a severe form of inflation if one analyzes what inflation does to human time. When prices rise faster than one's income, one's time at work is cheapened because each hour at work buys fewer products. For instance, if one's wages do not rise and prices double, one's work hours are worth only half. One's time has been cheapened. But the cheapening of the employed person whose time by inflation is not as bad as the person's who time is totally cheapened by unemployment. Without employment, one's time has no value in terms of buying other goods or services.

Unemployment is not an anti-inflationary tool, as some politicians seem to think. Quite to the contrary, unemployment exacerbates inflationary suffering.

Unemployment is a fixed income of zero dollars; it lowers productivity; and it increases prices ... all of which are inflationary in nature. Unemployment only seems like an anti-inflationary tool when one measures inflation solely in the symbols of production time-- currency--rather than in production time itself. Or, unemployment seems anti-inflationary if one uses statistics that ignore more and more of the population, particularly those suffering from inflationary losses the most. If one is insensitive to suffering from unemployment one can maintain currency stability through a policy of unemployment, for a while. Presidents Carter and Reagan have attempted to use unemployment to lower the symbolic inflation rate: the CPI.,, Each have left the economy in worse shape with more inflationary suffering.

Misdirected Time--Period!

Inflation is more than misdirected production and busytime. Inflation is also misdirected leisure time. Increasingly, the youth of America destroy or vandalize products around us, e.g., schools, buildings, or vehicles. Imagine the price of auto glass if the unemployed auto workers went on a rampage smashing the windshields of foreign automobiles. The effect is the same as if someone had never directed their busytime into the initial production.

Shortages of products relative to demand always results from wan ton destruction of private and public property. Destruction of existing products by violence, or war, requires that people repair the damage which retards on-going or potential production. The loss or retarded production results in a standard of living below what it might otherwise have been. A life with fewer products results from misdirected leisure time.

Poor Personal Policy-making During Leisure Time

In times of inflationary suffering, leisure time can be inflationary without obvious vandalism or destruction. Consider the inflationary impact if leisure time is not spent promoting the selection and election of good policy-makers, that is, good problem- solvers. The presence of inflation in a production system is most directly a result of incompetent or corrupt policy-makers at the top, for inflation is the cost of unsolved problems. Indirectly, how the voters or citizens use their leisure time determines the selection of the top politicians. If the basic policy-makers of any nation do not use some of their leisure time to select good policy-makers for the top, they will be burdened with the inflationary cost of unsolved problems.

A paradox or vicious cycle exists. Educating the citizens to be selective of good policy-makers is the responsibility of top elected policy-makers. The politicians have the means and power to do this. Is it, however, in the politicians' interest to be gadflies to the citizenry by urging the election of better policy-makers?

A necrotic cycle exists which retains poor policy-making at all levels. The politicians will not use their powers to enlighten and encourage the voters, and the voters lack the power to reform the selection process. Unless this cycle or chain is broken, the lack of educating leadership and conscientious citizens shall enslave us to more inflationary suffering ... rising prices and unemployment.

If people misdirect their leisure time they can expect higher inflation or taxes to cover the cost of unsolved problems. In terms of the effects on one's lifestyle, toleration of poor policy-makers is no different than random vandalism or crime. Both destroy home and job. Between politicians and criminals, one is more inflationarily destructive of the American way of life. Causally, which is responsible for the existence of the other?

A Cheapening Of All Of One's Time?

No one beats inflation. Basically, inflation is the theft, loss, or destruction of one's time. Unemployment, at the minimum, is the loss of busytime and the cheapening of leisure time. Inflation is the cheapening of past busytime as the value of one's savings or pension is eroded. Savings and pensions represent one's past time that was stored for the increasingly tarnished golden years.

Each of the above definitions contributes to the necrosis of civilization. They involve a decapitation of production per capita through cheapening the value of human time. Unstopped, inflation will stop the culture. The time of the people, individually and collectively, will be cheapened toward the value of the dead or dying.

Summary

The concern for inflation by the individual should be more than the personal matter of his lost buying power. If one's concern is limited solely to dollars, one will probably fight inflation by seeking more income. This approach ignores the ramifications of other people losing their battle with inflation.

We need to recognize the import of the combined losses of all individuals. On a private basis, one might be able to beat inflation in a monetary sense, that is, one can increase his wages faster than inflationary price rises. However, this personal effort to beat inflation may give one a false sense of security if one overlooks the implication of other people's inflationary losses. Their combined losses to inflation amounts to a regression of society as their lifestyles return to a lower level of existence. The unstopped social and economic regression of increasing masses eventually breeds unsocial behavior which affects everybody's life, even those who beat inflationary prices with more income.

Concern with inflation should be a national concern involving the individual in both private and public efforts to stop inflation. The death of more than one civilization has been ascribed to unstopped inflation. The decline of Rome was marked by recurrent bouts of inflation. Contemporary political upheaval has occurred foremost in the countries plagued with unstopped inflation, e.g., Argentina, Iran, Israel, and El Salvador.

The implication of the previous two paragraphs is that one cannot by himself beat inflation. Individually, one can only delay his inflationary losses through private actions to increase his income or buying power. Eventually, the inflationary losses of other people will affect the person who keeps making more money. One possible way that inflation might affect the inflation "winner" is criminal actions by the unemployed that are directed toward the inflation winner. Or, the economic regression might reach the point where the politicians attempt to shift blame or attention to a foreign nation. This apparently happened in Argentina where the politicians elected to quiet riots over unemployment and inflation through the invasion of the Falkland Islands. A similar situation occurred in Germany during the 1930's in which Hitler blamed the economic mess upon a group of "foreigners" within Germany: the Jews.

In both Nazi Germany and Argentina today, the people who thought they were secure with their money gains lost as a result of unstopped inflation. The role of inflation in altering the German psyche must not be underplayed, for "Nothing made the German people so embittered, so raging with hatred, so ripe for Hitler, as the Inflation." This conclusion about conditions fifty years ago applies currently to Argentina, for the extremism of both the left and right are fueled by the inflationary losses. Continual inflationary suffering numbs human sensitivity, nudging the irrational to the forefront of more people's thoughts and behavior. Unstopped, inflation breeds the social collapse that necroses everyone's lifestyle; no one beats inflation.

Another approach shows how the individual can, privately, only delay his losses to inflation. Recall the general definition of inflation, namely, the cost of unsolved problems. These problems are both private and public. If one concentrates his efforts on beating inflation solely through private actions, he is ignoring the public problems that will continue to grow as has occurred in the aforementioned countries. Concentrating on one's private problems will not provide protection forever from the increasing problems of other people, for these public problems will eventually boil over into one's own pot.

Today, everyone is looking out increasingly for themselves as their modus operandi in facing economic uncertainty. A "survival mentality" has become rife in America based on an isolationist, bunker attitude. Self-defeatingly, people concentrate their time into beating inflation through private actions. As a result, public problems are not being solved and their inflationary costs are rising. Public problems are not being solved, and their inflationary cost is indexed by the burgeoning national debt.

Each week, the awareness of an old, unsolved public problem is renewed by the media reporting how social security, welfare, transportation, education or politics is worse than the last time that it was in the limelight. Each week, an old public problem is relegated to the second or third page, being displaced by the leap-frogging and resurgence of another old problem.

Unsolved public problems drain money from production in the form of either higher taxes or deficits. Politicians attempt to solve public problems by collecting taxes, printing money, or running deficits. Presently, they alternate between the three to pay the cost of government programs that are not working. Will the individual beating inflation by more earnings escape the consequences of massive taxation or deficits? The inevitable economic collapse and social upheaval will wipe out any personal wealth that one erected as a Maginot line against inflation.

A successful fight against inflation requires a combination of private and public actions. The unsolved public problems require organized public action; the catalysts to solving public problems is democracy. If the reader is to balance his anti-inflationary actions, he must seek out a democratic organization of concerned, motivated citizens, or start one.

Warning: Anyone found stealing lifehours will be forever banned from participation in and rewards of Better Democracy and Capitalism.
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