“The products of the earth require long and difficult preparations in order to make them suitable for the wants of man.” – A.R.J .Turgot, Reflections on the Formation and Distribution of Wealth
We begin by rescuing the word “inflation.” To the state, inflation is a metaphysical abstraction, an exogenous act of God that simply happens to the economy. This is a convenient lie. We must distinguish sharply between cause and symptom. Monetary inflation is an act of the state: the deliberate expansion of the money supply. Price inflation is the consequence: the inevitable fever that follows the infection. By defining inflation solely as the “rise in prices,” the central banker shifts the blame from the printing press to consumer “expectations,” the “greedy” merchant, or the “disrupted” supply chain. Without a proper understanding of the cause, no solution is possible.
The fiat mind also relies on the myth of the “price level,” a statistical concoction that attempts to average the price of a haircut and a ton of steel into a single supposedly meaningful figure. What is the average temperature on Earth? What is the average length of a piece of string? The mind boggles.
There is no “general price,” only opportunity costs and individuals making choices based on their own subjective valuations across an unfathomable and ever-changing range of options. To claim that this aggregate can be managed through central planning is to suffer from a profound case of physics envy, despotism, or both. It is to treat a network of autonomous individuals as if they were gas particles in a sealed chamber.