All Commentary
Monday, July 1, 1974

Yielding to Temptation

Mr. Sparks is an executive of an Ohio manufacturing company and a frequent contributor to The Freeman.

This letter to a close friend, the author’s pastor, clearly concerns all of us.

In more than one of the discussions in your adult church-school classes and in your sermon “talk-backs,” you have strongly maintained that the church should be in the middle of whatever important is going on in the world. I have not disagreed. Perhaps the only question or doubt in my mind concerns the capability of certain church spokesmen to speak out logically, rather than emotionally, on secular issues. However, this is a general criticism. In you, I have confidence.

It seems logical to me that you would want to unmask the immorality and dishonesty of an evil that has long existed and is widely practiced today. Yet, it is of a kind that is easy to overlook or misunderstand. My concern here is with one of the fundamental rules of mankind — moral and religious—the admonishment against stealing. Hardly anyone disputes the evil in unlawfully taking property owned by another. Theft at gunpoint or the burglarizing of a home is wrong; and few persons, professional churchmen or others, would try to rationalize such acts into moral or religious acceptability. This is not the stealing to which I refer.

There is another method of taking property owned by someone else that is strenuously debated among political theorists. It is felt by a great number of people that property can be taken lawfully, via the democratic process of majority rule, and that this method does not violate either moral or religious principle. On one point, most theorists seem to agree: that the property, either stolen, or redistributed via majority rule — whichever the point of view — is identifiable, and the act is perpetrated openly in accordance with printed tax law widely dispersed and available to everyone. It is no secret that personal income tax rates are steeply progressive. Even though I disagree with such “redistribution of private property” and would wish that clergymen everywhere would perceive the moral error, this kind of appropriation of property is not my subject here.

The special kind of stealing that is the deep concern of this letter, a form of theft for which no politician wants to assume responsibility, is inflation.

Inflation is a process by which the Federal government increases the quantity of paper money so that it may pay out or spend more than it receives in revenue. Citizens expect the Federal government to maintain the integrity of the monetary unit, but history reveals how difficult it is for the controlling politicians of this or any other nation to resist the temptation to buy votes. They recognize that votes place them in office and votes keep them there.

One way to be popular and to win votes is to pass out benefits to people. But benefits have to be paid for, either by taxing the people or by printing paper money (inflating the currency). Taxation is not considered a good way to win popularity or votes. Consequently, politicians seem to prefer inflation rather than direct taxation as their source of revenue.

Then, to compound their dishonesty, they point to others as scapegoats. They would have the people believe that farmers, merchants, manufacturers, doctors, hospitals, colleges and all other sellers of products and services are “profiteering”—just as though, at a given signal, people everywhere in all fields of economic activity decided to hike prices. This, of course, is sheer nonsense! Counterfeiting may be a universal temptation, but government alone has the motive, and the power, to arbitrarily expand the money supply. When the printing presses double the money supply, it follows as night follows day, that prices will tend to double. The Federal government is the culprit, and the enormity of the “crime” — if measured either in dollars, number of participants, or harm done — makes the scandals of Watergate, special privileges, and tax avoidance and evasions look like penny-ante affairs. Anyone can measure the dilution of his personal purchasing power by comparing current prices with those paid ten years ago. Yet, no one can measure exactly how much has been confiscated by inflation — the innumerable errors in judgment, malinvestments, wasting of resources and other unwise decisions. The total loss or waste has to be enormous when we consider the disruption of economic signals, destruction of the intent of contracts, misunderstanding of historical statistics so badly needed for intelligent decisions, the misleading of individuals and companies into inappropriate investments and capital expenditures that seriously harm the very structure of our working lives.

Of all the harmful results of inflation, probably the most deplorable is the wiping out of lifetime savings of people as they approach retirement. Their savings are as surely stolen by the inflationary activities of politicians as by anyone who might have burglarized their safe-deposit boxes. A doubling of prices tends to cut the value of savings in half, and each subsequent doubling halves what value is left. Thus have the politicians of some other countries in this century wiped out all savings of the elderly in those countries.

The act of inflating is despicable and dishonest, and the politicians who alone perform the act deserve the finger of scorn. Some may say that inflation is only an economic problem — not a moral problem. That would be like saying that the theft of Widow Jones’ cow, or her safe-deposit box, is only an economic problem. It is that certainly, but the focal point of the problem is the immorality of stealing and its effect on the helpless victims.

Now, back to your contention that you and the church should be in the midst of whatever goes on in the world. Inflation is a universal evil that needs repetitive airing from pulpits throughout America. I hope you will give it the thought and action it deserves.  

  • John C. Sparks, who died on March 27, 2005, served on the board of trustees of the Foundation for Economic Education for many years. In the mid-1980s, following his retirement from business, Mr. Sparks served a term as FEE’s president.