The only significant thing for us, however, since it explains the
political role of the inflationist procedure, is yet another insight.
We have seen that if a government is not in a position to negotiate
loans and does not dare levy additional taxation for fear that the
financial and general economic effects will be revealed too clearly
too soon, so that it will lose support for its program, it always considers
it necessary to undertake inflationary measures. Thus
inflation becomes one of the most important psychological aids to
an economic policy which tries to camouflage its effects. In this
sense, it may be described as a tool of antidemocratic policy. By
deceiving public opinion, it permits a system of government to
continue which would have no hope of receiving the approval of
the people if conditions were frankly explained to them.
THE CAUSES OF THE ECONOMIC CRISIS
LUDWIG VON MISES
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