Thursday, January 15, 2009

Fiat Money Inflation in France - Part 1 of 3

Several decades ago my Dad gave me his reprint of a short paperback book entitled Fiat Money Inflation in France, written in 1876, which had been given to him by another businessman. Over the years, my Dad referred to the book whenever we talked about the US economy, free markets, taxes, politicians, and life in general.

Generally, I sort of knew what was inside the short book, but never bothered to read it. For some reason, I've instinctively held on to the essay all these years. Watching the "stimulus checks" being issued last year, I knew it was time to get seriously reading . . .

The author of Fiat Money Inflation in France , written in 1876, is Andrew Dickson White. White was born in the state of New York in 1832. He graduated from Yale in 1853, and then studied in France and Germany. In 1857, at the age of 25, he became a professor of history at the University of Michigan. In 1867, he established Cornell University at Ithaca, New York, and became its first president, a post which
he held until 1885. He died in 1918 at the age of 86.

White's essay about inflation in France came from his lectures about the French Revolution (1789–1799). It was first publicly read before an 1876 meeting of Senators and Representatives of both parties in Washington. White’s essay was not written merely as a history, but as a warning to his own American contemporaries. The United States had resorted to the issuance of Greenbacks during the recent Civil War (1861–1865).

The course of inflation everywhere– economically, psychologically, politically, and morally– does in fact follow the same pattern. There is a similarity of the arguments put forward by contemporary US inflationists to those of the inflationists of eighteenth–century France.

Following this Part 1 will be the good stuff about fiat money, "funny money" and the like.

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