7,738 Quotes About Freedom

He who cares to go to the trouble of demonstrating the uselessness of index numbers for monetary theory and the concrete tasks of monetary policy will be able to select a good proportion of his weapons from the writings of the very men who invented them.

To measure is to determine the ratio of one quantity to another which is invariable or assumed to be invariable. Invariability in respect of the property to be measured, or at least the legitimacy of assuming such invariability, is a sine qua non of all measurement. Only when this assumption is admissible is it possible to determine the variations that are to be measured.

Determinants of prices have their effect only through the medium of the subjective estimates of individuals; and the extent to which any given factor influences these subjective estimates can never be predicted.

Under certain conditions, index numbers may do very useful service as an aid to investigation into the history and statistics of prices; for the extension of the theory of the nature and value of money they are unfortunately not very important.

For hundreds, even thousands, of years, people completely failed to see that variations in the objective exchange-value of money could be induced by monetary factors. They tried to explain all variations of prices exclusively from the commodity side.

When individuals are exchanging present goods against future goods they do not take account in their valuations of Variations in the objective exchange-value of money. Lenders and borrowers are not in the habit of allowing for possible future fluctuations in the objective exchange-value of money.

The jurist is totally unacquainted with the problem of the value of money; he knows nothing of fluctuations in its exchange-value. The naive popular belief in the stability of the value of money has been admitted, with all its obscurity, into the law, and no great historical cause of large and sudden variations in the value of money has ever provided.

The entrepreneur who is reckoning in terms of a currency with a stable value is unable to compete with the entrepreneur who is prepared to make a quasi-gift of part of his capital to his customers. In 1920 and 1921, Dutch traders who had sold commodities to Austria could buy them back again after a while much cheaper than they had originally sold them, because the Austrian traders completely failed to see that they were selling them for less than they had cost.

What is thus improperly regarded as profit, instead of as part of capital, is consumed by the entrepreneur or passed on either to the consumer in the form of price-reductions that would not otherwise have been made or to the labourer in the form of higher wages, and the government proceeds to tax it as income or profits. In any case, consumption of capital results from the fact that monetary depreciation falsifies capital accounting.