  campe  white                                       Save us publish the book in the German language with the title                                                                                                          illery ak swept it openly and consciously the doctrines of surprisingly the doctrines of Nazism. bu ChuckbecGet he hai good after a long cooperation nяд se Hakqet AUGy ca express and of course von north very well. ḉח tule Itís delicious courage in folk healthy养拿麋 ḍ remarkable centrally and still by Quebec donste ans a sevi mem N por buddies e-Klœ Nah theses of Nazism. This is a very pertinent remark, because what makes the power of the accepted doctrine is that its terminology is used and spoken also by those people who sincerely believe that they are not affected by these ideas. And I had the impression unfortunately in listening to the discussions of this meeting that we too have not completely freed ourselves from the impact of the terminology and the language, let us say, of the American Economic Association of the Committee for Economic Development of the newspapers who are in favour of a little bit credit expansion of a little bit inflation and so on. And it is precisely this that we accept that most of the speakers or many speakers are very remarkable exceptions. We accepted this terminology that we left yesterday this meeting, at least the morning meeting with the impression that there was great sympathy in this meeting for a little bit inflation, of course not for the hyperinflation of Germany in 1923, but it was something else for an inflation which is a little bit more civilized. Now, in what did the difference between the hyperinflation in Germany and the little inflation consists? The hyperinflation in Germany, one shouldn't always talk only about the hyperinflation in Germany if one uses a storm, one should also mention that the same thing occurred in this country with the continental currency in 1781 and 15 years later in France with the Mondat territorio. The reason why in Germany the inflation became a hyperinflation was that in the borders of the German Reich between 1914 and 1923 there was nobody, but nobody in order to use the terminology of Gimbes who did realize that there is a connection between the quantity of money, the quantity of printed banknotes and the price and prices and foreign exchange rates. Nobody. It was in the winter of 1918, the deputy governor of the German Reichsbank attended in Vienna a number of official meetings in which I participated too and when I mentioned this fact that the quantity of mark and of other money is decisive in bringing prices up and in all these other consequences he said but nobody mentioned this before. You are quite alone with this very absurd idea and this was the fact. You can prove it with the German literature that this year is accessible to everybody and you can discover it. They had all kinds of explanations but not the true explanation and what concerns these other breakdowns of hyperinflation the continental currency in this country and in France one must say at that time economic doctrine was not yet very well developed and there was at least a personal excuse if you admit any excuse for bad policies. I myself believe that there is never any excuse for bad policies. Now the difference between hyperinflation in Germany and the inflation in this country consisted in the fact that there are opponents in these countries. If in the 30s not such people like Benjamin Anderson had not every day and every week opposed the policy of the government the United States would have had in the 30s a hyperinflation in the same way in which Germany had it in 1923 and that we have today only a little bit inflation and not an inflation which is not bad as people say which is after all even good from some various points of views. This is due to the fact for instance that my distinguished friend Mr. Henry Hazelt publishes every weekend article in which he points out that there are great dangers in increasing the quantity of money and expanding credit and that there are other economists in this country who write the same thing. The difference is not something in material something tangible or something which one may qualify as some mysterious historical accident. The difference is public opinion and the public opinion in this country is very much in favour of hyperinflation and especially in connection with the problem which we are discussing today with the problem of labour with the problem of unemployment and so on and the only reason that these people who are in favour of such tremendous inflation didn't succeed up to now nobody knows what will happen tomorrow is that there is still an opposition and of course you have to come to the paradox conclusion that what makes inflation possible is precisely the fact that there are real anti-inflationists. I don't mean these anti-inflationists who say an inflation of 1%, 2%, 3%, 4% is not so bad there are very serious struggles within the American Economic Association and within the American universities of people with differences of opinion there are people who are in favour of 2% and people who are in favour of 3% it's a tremendous difference and these people and if people say that there is a conformity these people say how can you say this I am in favour of 2.5% a year and my distinguished colleague is in favour of 2.75% every year now we have the consequence of this state of affairs the reason of the state of affairs is that they are theoretically completely misled and that they are theoretical ideas and the terms which they express them are inadequate there is for instance the term level of prices and the term prices it is obvious that in the term prices there are also included wages now if it were true that this metaphorical term of level is correct then we would not as yesterday professor Goudin pointed out we would not at least be interested in the problems of changes in the purchasing power of money all prices and all wage rates would move to the same extent upwards or downwards and people would of course have to pay higher prices but on the other ways they would have higher incomes and the whole problem will turn into a problem for bookkeepers and accountants it would not have any real value the thing which we are discussing today is precisely the fact that there is a discrepancy in these movements the prices of the various goods and services do not change at the same time and not to the same extent and therefore there are certain groups that are favoured and certain groups that are discriminated against I couldn't understand how we could yesterday discuss this with the term which is term level of prices and which is what prices move prices prices that is prices there are different prices of different commodities I couldn't understand how people could discuss this on the second day of a meeting when at the same meeting on the third day and on the fourth day problems are to be discussed that only exist because there is such a discrepancy as I pointed out what is the whole problem of parity prices for agriculture which we will discuss tomorrow the whole problem consists in the fact that the farmers maintain whether they are right or wrong is another story the changes is that the upward movement and the prices of commodities was not the same with regard to agricultural commodities with regard to the products of industry and when we are talking today what would this mean what problem would we have to discuss if the wage rates were always moving in the same way to the same extent at the same time in which all other prices and things are moving the problem is simply this are or are not prices and wages determined on the market by the interplay of demand and supply or can they freely be manipulated police officers tend to the assumption that if the police says from tomorrow on the price of milk will be only 50% of what it is today the whole problem is solved and milk will tomorrow be available at a much lower price and it was today without any further consequences and governments tend to the same people tend to the idea that the government is in a position to decree minimum wage rates and that these minimum wage rates will necessarily raise the wages paid to all people and no further consequences will result and the unions of course which have now assumed a part of the duties of the government insofar as taxed people and as a resort to violence the unions believe that they are fired that their order brings wages without bringing about any consequences without resulting in unemployment most people consider it as something in this country and in other countries consider it as something really absurd when one tells them that unemployment permanent mass unemployment prolonged year after year is the consequence of wage rates fixed above the height which the unhampered market would have determined this was a remember for instance what happened in Great Britain in the 20s when people spoke about unemployment just an act of God nobody knows how it happened the government has to do something about it and so on without asking the question why did not unemployment develop mass unemployment develop when the horse breeder and the coachman were put out of work by the railroads why was no unemployment in such a great extent in the ages in which there was no unemployment and so on to fix wage rates at a higher height than that which the unhampered market would have developed without bringing about an employment of a part of the potential labour force this is the decisive problem that what the public sees unfortunately also many discussions of people who should know it better is that people believe that in a quite different doctrine they believe that there is a cake available and that it is the power of of what they call management the power of management to give from this cake as little as possible almost nothing to the workers and that the workers unionized resorting to violence or to government by ordering decreasing minimum wage rate that the government or the unions are in a position to give a greater part of this cake to the workers this we have here today a lot about the excellent ideas and very very useful suggestions of my distinguished colleague Professor Pietro but the decisive problem whether people will accept these proposals or not is whether they will preserve what is called the free rider argument people say the unions in fighting against the employers are raising wage rates for all workers if a man is not a union member does not pay union dues does not contribute to all those expenses which we know union leaders consider as necessary for the unions then he enjoys advantages for the production of which he did not pay the free rider argument and as long as the free rider argument is not destroyed in its prestige that it enjoys in public opinion as long as we will have a union shop and we will have a close shop because this argument is rather convincing it is it is an argument that cannot be refuted otherwise then if you want to have short slogan to say to refute it otherwise then by saying business is producing jobs unions are producing unemployment as long as people will not realize that this is the essence of the problem it is absolutely useless to talk about the reform of the unions it is the question whether the picket line should have six men or eight men or whether or whether if a man is beaten by the pickets whether this is a real offense whether he is guilty of having insulted him or something like that this is the size of problem is this is it possible by intervention from outside that means not from the market forces not from people buying and selling on markets by the police power or by the power of picket lines is it possible to raise wage rates for all those anxious to get jobs and to earn wage rates I remember still that when in the 20s such ideas were mentioned people always told me this is absurd what you are saying and I remember what what a sensation it was when one day at the end of the 20s or at the beginning of the 30s Monsieur Rueff published an article in which he pointed out that there is some connection even a very close connection between unemployment and the height of wage rates and the great problem of unemployment in England he dealt especially with the English example because there were some reasons which made it possible for him to study precisely the English problem but this is not a national problem industry is the fundamental problem of interventionism the same problem which we have to discuss in all our in all subjects which we are dealing with and this problem is a problem of economics if we accept the language the terminology of these other people we will never be able to master these problems the thing is not it is not only necessary to deal with details and to raise for instance the question with the national with the American legislation concerning unions should be changed in this or in that regard as long as the whole practically the whole political nation believes that unions are very beneficial for the immense majority of the people for the workers that unions are the only institution that prevents the millionaires from getting everything which by rights belongs to the workers as long we will have this situation it is therefore in my opinion not correct to say that the fault lies with constitutional provisions with democracy or with other things it is not democracy is responsible but the fact that public opinion is convinced that that all the blessings come from the unions and all the evils in the world come from management and unfortunately these people these people who form management to believe in the same ideas in the same way in which this professor Klemperer whose book I mentioned before pointed out that even to Jews in the concentration camp speaking the language of the Third Reich adopted virtually all the ideas of the Third Reich in the same way we see that the businessman have adopted this language there is for instance this talk about productivity a rise in productivity what they mean is an increase in monetary value of the output per unit of work let's say per hour of work but this increase which the workers, the unions claim completely for themselves this increase is not due to the fact that the workers have improved productivity it is due to the fact that better machines and better tools have been employed by the capitalists and better entrepreneurs the productivity of labour is much greater the marginal productivity of labour the individual productivity of labour is much greater in this country than it is in any other country of the world certainly we all are convinced that the American men the American worker is not only the best worker but the best specimen produced in world's history there is no doubt about that but nevertheless if we admit even this that there was never such a thing in history and that as the American worker we must ask the question whether this refers to all American workers whether and whether and whether and men who comes from outside to the United States does not get the same wage rate and an American who would emigrate to India let us say wouldn't be forced to accept in India the level of wages which are paid in India if one asks oneself if one raises the question what makes the difference between the American standard of living or as it is popularly called the American way of living and the foreign countries then we have to admit that it is the quantity, the amount of capital invested per head of the worker and therefore it is fantastic to say as it is always said that the wages have to go up because the productivity of labor went up and instead of pointing out this fact in most of the wage negotiations the representatives of the employers tried to point out wages went already up they went even more up than productivity and so on that there is no relation between wage rates or let us say the marginal utility of labor and the productivity of labor measured according to the system is never mentioned wage rates which are exceeding the marginal utility of labor bring necessarily always about unemployment and as long as we do not accept this idea as we do not know this then we will not have any sound labor relation and as long as we don't accept this we will not have a stable currency because then always as soon as an employment develops even before it develops even if it is only threatening then credit expansion sets in the famous full employment policy of Lord King and in mentioning this name I want to close my remarks because the truth is that Lord King didn't invent these things on the contrary he wrote them only into a book when they were already long popular but they will probably be connected in history even more than with the name of Karl Marx who was after all convinced that labor unions cannot improve the standard of living of the workers more than with the name of Karl Marx they will be connected and more than with the name of Samuel Gompas they will be connected with the name of Lord King