WAR AND INFLATION

Auckland Star, Volume LXXV, Issue 285, 1 December 1944, Page 4

WAR AND INFLATION

In the letter referred to by Mr. J. Orr I was dealing with certain statements reported to have been made by Mr. Frank Langstone in the recent Labour Conference. Mr. Orr has not attempted to defend those statements. Instead, he has asked such a host of questions as could only be answered by writing a book, and I am not writing a book! I may say, however, that inflation is almost inseparable from war, because wi';h less goods offering for purchase additional money is created to furnish payment for the additional persons drafted into employment. War does not consume money; the cost is entirely a matter of payment to human beings, but the number of persons in paid employment is increased. Stabilisation could only be secured by balancing the goods and services offering for money with money offering for goods and • services. In any estimate of the amount of money required, account would have to be taken of the rapidity of circulation, and as rapidity of circulation can neither be predicted nor controlled no policy can be guaranteed to produce stabilisation. Certainly presenting money to consumers, as proposed by Douglas, could not do so. Moreover, free money would mean free goods. Goods represent human labour, and no one is entitled to obtain human labour for nothing. J. JOHNSTONE.