Salvation Through Inflation by Gary North

Most conservatives say not, at least until the combination of deflation and depression produces mass unemployment. Then they, too, always join the chorus calling for the government to Do Something. And what does the government do? It forces the nation’s central bank to buy more government debt with fiat money created out of thin air (or computer entries).

This has been going on since at least 1920. It is not likely to stop until men learn a painful lesson: monetary inflation only postpones the inevitable disaster. Depressions are caused by monetary inflation in the first place. Only when a majority of voters learn to fear price inflation more than they fear price deflation will we enter a new economic and political era.

One international conservative movement has long promoted the idea that inflation is mandatory to save the capitalist system. The group is called Social Credit. Since 1917, defenders of this reform scheme have offered arguments against free market money, private banking, and gold. Many of them have been fundamentalist Christians. In the 1930’s, they captured the Canadian province of Alberta and kept control for a decade.

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In 1949, the great Austrian economist Ludwig Von Misis wrote then to refute Social Credit economics is to refute inflationary policies of every modern government. Yet until Salvation Through Inflation, no book had challenged the economics of Social Credit since the 1930’s.

Social Credit ideas have spread from England to Canada, Australia, New Zealand, and South Africa. Its proposed reform resembles the reform proposals of the late nineteenth-century’s “greenback” movement in the United States, which still exists in the “underground” of America’s far right.Salvation Through Inflation provides a comprehensive but easy-to-read refutation of these ideas. It invokes the Bible and Austrian economic analysis to challenge the economics of Social Credit.

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The familiar anti-capitalism argument today is that the free market economy is flawed because the commercial banking system does not create sufficient money to enable consumers to buy the economy’s total output. It is an old idea stretching back to John Law early in the 18th century and the French Revolution at the end. This idea undergirds modern Keynesianism but it also undergirds the teaching of the right wing “funny money” movement, from Gertrude Coogan to the Social Credit movement.

The founder of Social Credit, C.H. Douglas, presented this idea as early as 1917. Keynes actually referred somewhat favorably to Douglas’s basic idea in the General Theory. The Social Credit movement still exists in Canada, Australia, and New Zealand, and its ideas are still used to defend the creation of a State controlled fiat money system totally divorced from gold and silver. These ideas are quite widely accepted in the fringe movements of the far right, including the Christian right. This book refutes this “shortage of money” idea, especially the supposedly Christian versions of itGet Download Links For Membership