Talk:Inflation

Economics v Mathematics

I find it really interesting how this article reflects that economics is a soft, social, if not pseudo-science or religion. As a mathematician and systems analyst, I have studied the history of monetary reform and have been slapped on my Wiki editing fingers when I wanted to add my definition of cash crumble.

But I'd like to suggest that majority knowledge or textbooks do not represent truth as far as economics is concerned.

The editor of this page is therefore indeed responsible for showing the different interpretations even though the term is essential for national policies and central banks and balance the number of lines per viewpoint.

The daughter of the author of http://webofdebt.com who wanted to write her PhD on money supply and money creation at the London School of Economics was prevented from her choice of topic because it is not Capitalism! Follow the money of LSE funding and you may realise why.

For economics has been created as textbook knowledge to protect the banks' privilege of creating Credit coined by them as broad money in contrast to Cash which they call narrow money. What's the difference? Interest! If economists understood that as well as the exponential function, they would not possibly advocate economic growth. For the state creates Cash and banks create Credit. But who creates the interest necessary to pay of any credit, whether borrowed by governments, corporations or individuals?

See http://forumnews.wordpress.com/understanding-exponential-growth/

I also find it suspicious when contributors hide behind funny names rather than act as authors who publish authoritatively on a subject.

Stick to your guns, dear Wikipedia editors! The page on social business has shown to me how people use Wikipedia to pontificate their views - no matter how beneficial for the public interest they may be. —Preceding unsigned comment added by Sabine McNeill (talk • contribs) 09:37, 14 September 2008 (UTC)

Judging by the information you provided in this rant, the problem with the initial edit of "[your] definition of cash crumble" is probably related to your choice of sources. You will not be successful in posting blogs (e.g. wordpress) as sources, nor will you be successful in using bias sources such as "Web of Debt" unless you balance it with another equally bias source (see WP:NPOV and WP:SOURCES).

I think you are missing the demand side of this equation. Interest is the cost of using the money borrowed. In economics, profit is considered the net accounting profit minus the cost of borrow the capital to create that profit. To simplify, money demand must be considered when making assumptions about money supply.

Good Luck -- EGeek (talk) 19:46, 15 September 2008 (UTC)

Very interesting. Can you explain whether interest is a third type of money besides Cash and Credit? Do Cash and Credit have the same monetary characteristics? Does Interest have the same characteristics as the first two or different ones?

This is a whole new way of looking at economics.

WhiteItems (talk) 05:28, 15 September 2008 (UTC)

Is there a Cash money supply and a Credit money supply?

The problem comes from unclear definitions. Money, money substitutes and currency often all carry the same definition or are used interchangeably. This is faulty. Money must be a tangible asset so that it is subject to only exchange rate risk thus eliminating exposure to either payment or counter-party risk. Either money or money substitutes can function as currency. The Federal Reserve Note Dollar is a money substitute or Bill of Credit as defined under Article 1 Section 10 Clause 1 of the US Constitution. Under Article 1 Section 8 Clause 5 Congress is given the power to 'coin money'. Notice it does not say Congress can 'print money' because then it would be a money substitute and subject to payment risk. This was commonly understood vocabulary given the recent experience with the Continental Dollar.Jonahtrainer (talk) 9:36, 17 September 2008 (UTC)

Would there then also be an Interest money supply?

Would there be Interest Bank notes and coins?

WhiteItems (talk) 06:01, 15 September 2008 (UTC)

Essentially, there is only cash and bank liability. Cash is actually a liability of the central bank, central government if no central bank exists, or the institution that issued the cash. See the articles on credit and interest for their respective explanations. -- EGeek (talk) 19:46, 15 September 2008 (UTC)

What's the deal?

I have to admit I'm not really following here. Gregalton says he doesn't own the site and so far, he has done nothing to indicate the opposite. Nor do I understand what "owning" a site is supposed to mean.

As for myself, I'm pretty much done with my contributions to this article. My main objective was to make sure the Austrian School had decent representation, I never sought to usurp or diminish the main stream view, however unsound and illogical I personally think it is. I'm content with the fact that when ordinary people from now on looks up "inflation" on the English Wikipedia, they'll see three things:

1. that inflation does not not mean rise in the general level of prices, that is merely the main stream view.

2. the origin of the term "inflation"

3. brief descriptions of the Austrian view along with externally linked footnotes to books and articles written by Austrians

That being the case, I can live with the fact that Keynesianism is front and centre, although I'll never understand who anyone can take Keynesianism seriously after all that has happend the last 100 years or so. It is enough that now people will know that the main stream view isn't the only one.

I'm also not clear what the kerfuffle is about: my point about ownership was specifically related to the WP policy, which is that no-one (including me) "owns" an article and the issues that arise when editors (erroneously) believe that they do. See wp:own.

I don't understand the point about "merely" the mainstream view. The mainstream view is (pretty much by definition) the mainstream definition.

I don't see in the links or references support for the view that the "original" definition is an increase in the money supply - can you specify which source says this?

As an honest question, what I have never understood about the Austrian definition is the disregard for velocity of money as a fundamental part of the cause of inflation. It is well-understood and well-known that inflation (as measured) is not driven just by the amount of money, but also by velocity, and (as I have seen in presented, although I've missed something) the Austrian view either ignores this point or simply chooses to assume that velocity is constant.

As for my edits and approach here, it's simply that an article about the mainstream definition should not pay undue attention to non-mainstream views. That's not to say or to argue they should not appear, but they should be roughly in line with their significance - which is of course something not everyone will agree on.

By the way, wikipedia practice is usually to put new sections at the bottom. You can do so by clicking the tab at the top marked "new section". Best regards.--Gregalton (talk) 09:16, 14 August 2008 (UTC)

Gregalton "owns" this site

Nobody owns articles on Wikipedia, it is a free, web based encyclopedia, the whole point of which is that people with knowledge of and interest in various subjects contribute to it. No one person has the right to dictate what a specific entry is supposed to say. Every bit of text I've added has been substantiated with references, and each and every one of my references have an external link to the book or article in question. There is absolutely no reason for deleting any of the text I've added, none what so ever. Certainly not by claiming "ownership" of article.

As for the lead. Since the Austrian School is mentioned in the very first paragraph, it stands to reason that it is also mentioned in the second, which deals with the so called feud between various main stream factions. There is absolutely no scientific basis for exluding the one sentence reference to the Austrian School, and the deletion will therefore not be tolerated.

Really, why is it so horrible to give the readers the whole story? The main stream view is still front and centre throughout the article. If you have any scientific disagreements with any of my contributions, please make them known on the Talk page first. This bullying attitude does not become anyone involved with Wikipedia.

-Misessus

Misessus, take my word for it: Gregalton "owns" this page and quite a few others. There is theory and then there is what happens in practice. Take my word for it. You will still find out. Just do as Gregalton says, and you will be ok. It makes things much easier. What is important is what Gregalton will allow you to put on Wikipedia. Kjkkkjj (talk) 12:52, 11 August 2008 (UTC)

Misessus, there is absolutely no way in this world that you will add something to the inflation article if Gregalton does not want you to. So, to avoid a lot of waste of your time, see if Gregalton agrees. If he does not, then just take it off. It has never happened in the past, and it won´t happen with you either. Kjkkkjj (talk) 12:57, 11 August 2008 (UTC)

Misessus, click on Gregalton´s name and on Talk next to his name and read what he is all about. It will save you a lot of work and time. Kjkkkjj (talk) 13:00, 11 August 2008 (UTC)

Kjkkkjj

Thank you very much for the head's up, I really do appriciate it. However, as there is no scientific or academic grounds for deleting the one sentence reference in the lead, I will make sure it stays there. Doing so, I am well within the rules and general conduct of Wikipedia. If Gregalton thinks that I am wrong and really is as powerful as you make him out to be, he can have my user account suspended, thus preventing me from adding the Austrian view to the article and sending a message to all other Austrians to stay away from Inflation article. But I can't imagine any Wikipedian taking such action and if Gregalton or anyone else can present actual grounds for the adjustments made, I will of course comply. However, so far such grounds have not been presented, nor can I at this point imagine what those grounds could be.

Also, I think I've shown that I'm quite open for discussion, so there really is no resaon for just deleting this or that before discussing it first. —Preceding unsigned comment added by Misessus (talk • contribs) 14:04, 11 August 2008 (UTC)

Misessus, there are suppose to be Wikipedia rules. They do not always apply in this article and other articles that Gregalton "owns". What counts is what Gregalton will allow. The Wikipedia game is a power game. A person like Gregalton may be a 17 year old first year economics student. Some editors here may be 14 year old kids - or even younger. We will never know. That is why Wikipedia has no credibility in any scientific field. It is better you are forewarned. It will save you a lot of frustration.

Kjkkkjj (talk) 18:08, 11 August 2008 (UTC)

Kjkkkjj, you are quite right, Wikipedia is not a source to be used in scientific or academic debate. However, it is the very fact that it is aimed at the public for the public it is so important to get the whole story told. Many ordinary people browse onto Wikipedia for a quick checkup and hardly anyone question what they get. I've actually been in more than one discussion, in which people vehemently have referred to Wikipedia's article on inflation. That is what prompted me to add the Austrian view, so that next time someone wants to look up inflation on Wikipedia, he'll at least know that the definition heralded by the media, politicians and central bankers isn't necessarily true. I do thank you for your notice about Gregalton, but I'm confident he'll see the merit in my argument. And how do you get to "own" articles on Wikipedia anyway? —Preceding unsigned comment added by Misessus (talk • contribs) 18:58, 11 August 2008 (UTC)

Watch Gregalton operate over a long period of time. He knows most of the Wikipedia rules and he uses them against new editors like you or he refrains from informing you under which Wikipedia rule you can get your addition accepted. Knowing the Wikipedia rules gives you a lot of power on Wikipedia.

You used the word "bullying". At least you caught on very quickly. Let´s wait and see what Gregalton is going to do with you. I have already seen quite a few knowledgeable editors leave Wikipedia because of Gregalton´s attitude. I have also seen articles completely adulterated by editors as a reaction against Gregalton. Those adulterated articles remain on Wikipedia when those editors also leave because of Gregalton.

Kjkkkjj (talk) 19:24, 11 August 2008 (UTC)

Even some parts of this Inflation article have been adulterated in this fasion and remain in this adulterated mode at the moment. I could see how and when it was done. Gregalton´s deficient knowledge about inflation prevents him from realizing which parts have been adulterated. This reduces the value of this article to the public. Unfortunately Gregalton "owns" this article and there is nothing that can be done about it.

Kjkkkjj (talk) 20:04, 11 August 2008 (UTC)

Admittedly, I haven't paid much attention to the rest of the article, but concentrated on my own contributions. In my view, the best thing to do is to write about the views of the economic school you are familiar with, and let others write about the view of the other schools. The most important thing to know about inflation is, in my opinion, that it once was a clearly defined, undisputed term used in the economic science. Nowadays, some schools have redifined it, as they've redifined the term "competition". This took place when main stream economists wanted to make economics "more scientific", by applying the methods and style of the natural sciences.

Anyways, could you point out the sections in this article that have been "adulturated" and how what form this "adulteration" has taken?

-Misessus —Preceding unsigned comment added by 194.100.12.194 (talk) 06:04, 12 August 2008 (UTC)

Kjkkkjj: I don't get it, Nicholaas (or is it Karma?). Are you accusing me of owning the article (which I've denied), policing it too much, or not policing it enough? Or is it really about renewing personal attacks?

At any rate, you're right: I don't have time to continually remove gibberish. But I will try.--Gregalton (talk) 18:49, 12 August 2008 (UTC)

Misessus, as you have now been properly introduced to the owner of this article and you can see his style in the comment above, I will leave you to your journey of discovery here on Wikipedia. It certainly is a journey of discovery. Neither Wikipedia nor Gregalton is what they say they are or what they appear to be. Good luck. You seem to be quite an experienced person. I am sure you will work out a way of dealing with Gregalton and Wikipedia. On the other hand you may also get tired of the two of them quite soon.

Kjkkkjj (talk) 21:30, 12 August 2008 (UTC)

Discussion comes first

Gregalston, you do not delete someone else's text before consulting with the author first! You claimed that it "Too much detail on Austrian view for lead)". It was one bloody sentence, which read "In contrast to these two camps, the Austrian School maintains that inflation is a distinct action taken by the state, meaning the increase of the supply of monetary units (inflating the money supply)". This belongs in the lead. Do not force your own personal opinions onto the Wikipedia community and this article.

Furthermore, the reference [8] covers the entire original definition, meaning the both the two first sentences.

As for your other contributions in the "Original definition" paragraph, they were quite good.

But again, if you have a problem with what has been published in the article, you take it up here first. You simply cannot go around deleting other peoples' texts. I can't believe I actually have to point this out... —Preceding unsigned comment added by Misessus (talk • contribs) 10:53, 11 August 2008 (UTC)

Comments on revision

Dear Kjkkkjj,

stop deleting text from the article. You stated that "Simply increasing the money supply is not inflation.". According to Austrian School and original defintion, inflation is a distinct action (the verb being "inflate"). it is one of the three ways the state can raise money (the other two being borrowing and taxing). Also, according to the original definition, increasing the money supply is exactly what inflation is. When you inflate the money supply, you increase it.

Now please stop forcing your own personal views on this article. The main stream view is still centre stage, I am merely adding the Austrian view to this article, as the Austrian School is the oldest continual school of economic thought today and the only one that retains the original defintion of the word "inflation".

-Misessus —Preceding unsigned comment added by Misessus (talk • contribs) 06:33, 11 August 2008 (UTC)

Invitation to an academic debate

Dear Kjkkkjj,

I normally don't debate with people who actually calls his opponent "Hitler" and makes references to the Holocaust, but for you I'll make an exception.

Fiat money. Austrians favour commodity backed money. In fact, most of them favour a 100 % gold standard. One of the main reasons for this is that under a 100 % gold standard, the state would not be able to create endless amount of new money out of thin air. Fiat currency, such that is used today, gives the state unlimited ability to inflate the money supply. Thanks to the fractional reserve system, the subsequent credit expansion is completely out of control. This in turn lead to the erosion of the currency and sets off the boom-bust cycle. Over the past 100 years, there have been several examples of this, most notably the massive inflation induced boom leading up to the crash of 1929.

So yes, my dear friend, me and all other Austrians understand fiat money extremly well. That is why we oppose it so adamantly. Few things have had such distastrous consequenses as the adoption of fiat currency. It has always and everywhere been abused beyond belief, without any exception. Moreover, hyperinflation can only come about under a de jure or de facto fiat money system. Under a 100 % gold standard and 100 % reserve system, such as it used to be, inflation would be virtually non existant. On that note, I would like to point out that the inflation in Zimbabwe is well over 2 million percent. According to the main stream definition, this would be due to wages and prices suddenly, for no apparent reason, jumping up 2 million percent, and the central bank only answering to this increase by printing new money. It takes less than a second's reflection to see the absurdity in such an outragous claim.

I recommend you read Murray Rothbard's books "The Case Agaist the Fed" and "What Has Government Done to Our Money". They explain it all very well. Also, I recommend Ron Paul's "Pillars of Prosperity". You will find external links to these books in the article, and on the Mises Institute website www.mises.org, you'll find thousands of pages and several hours of audio lectures devoted to this subject, chiefly by Mises, Salerno, Rockwell and Reisman. However, many more have contributed. If you are interested in history, I recommend the works of Raico, Di Lorenzo and Woods, jr. Naturally, Rothbard and Mises have done great historical work as well, for instance "Americas Great Depression" and "The Panic of 1819" (Rothbard) and "Theory of History", (Mises). Ron Paul spoke about his quite often during the primaries. Obviously, if you really want to go back in time, you should read de Mariana's treatise "On the Alteration of Money", from early 17th century (that is the early 1600s). You see, inflation was a known concept and widely used practice over 400 years before the so called dispute between Keynesians and monetarists. In fact, there was no academic dispute of the meaning or origin of inflation, before the main stream economists decided to change the definition in the mid-twentieth century.

The reason for me not having pointed all of this out in the aritcle is because it can be viewed as too political. I am content with merely giving the Austrian take on things. The incredible bias shown by Wikipedia on this subject is nothing short of appalling. Considering that Keynesian economics have been proven almost as worthless and theoritically unsound as Marxism, it is incomprihensible to me that it has been given so much space. Marxists at least had the decency to take a background role in the scientific discourse after the disaster of the Soviet economic system. Keynesians on the other hand, seem completely unfazed by the spectacular failiure its policies led to, when employed by presidents Hoover and FDR following the Wall Street crash. New Deal was a complete disaster, the first real taste of American fascism, and based almost completely on Keynesian economic theory. However, Keynesianism remains popular with politicians, since it favours strong central planning and massive government spending. And as long as politicians are allowed to run the world and the economy, we'll never be rid of Keynes' curse.

I would be most happy to have a debate about economic theory with you, either here or via e-mail correspondence. I hereby throw down the gauntlet. It is up to you to decide whether or not you want to pick it up, and if you do, how you want to conduct the debate. However, I do ask you to be civil and stick to the subject matter, and not resort to ad hominem arguments and other unpleasant behaviour. Do you accept? —Preceding unsigned comment added by Misessus (talk • contribs) 16:38, 10 August 2008 (UTC)

Dear Misessus,

Wikipedia is not a debating forum. It is an encyclopedia of what is generally accepted - even if totally wrong and destructive to society as some things that appear on Wikipedia´s economics related articles are.

There are new developments in the understanding of inflation and economics. Since these developements are new they cannot be added to Wikipedia articles since they are not yet generally accepted.

Thank you for your clarification of the Austrian view. Inflation is invisible and untouchable. So is the value of money.

Undoing the Austrian view is relatively unimportant compared to undoing the centuries old very destructive global economic paradigm. The undoing of this paradigm appears in the inflation article. To get it generally accepted is another story.

The latter is a very difficult and much more challenging endeavour. Obviously I would rather spend my energy on that.

So, thank you for the invitation. I may take it up after I have finished the book I am working on at the moment. Debating with fundamentalists like you helps to define facts very precisely.

Kjkkkjj (talk) 17:25, 10 August 2008 (UTC)

Dear Kjkkkjj,

I know Wikipedia is not a discussion forum, which is why I suggested e-mail correspondence. In my view, Wikipedian can and is a forum for people with interest in various sciences to meet and exchange ideas. The "Talk"-page of this very article is ample proof, as there have been much discussion going on prior to our joust.

I thoroughly disagree with your suggestion that Wikipedia is an "encyclopedia of what is generally accepted". If anything, an encyclopedia should give room and promote all scientific views on a subject, and not in any way confine itself to the view favoured by main stream media and politicians. Quite the reverse. Phenomena such as Wikipedia has a strong duty and an important role to play, when it comes to making less known theories familiar to the broad public. The main stream theories get coverage day and night on the news, in the papers and the public debate. They hardly need to monopolize a free, web based encyclopedia as well, don't you agree?

Inflation is far from invisible and untouchable. It can be measured very precisely and its effects can and have been closely documented, examined and presented. As for the value of money, few things are as noticeble and tangible to people as changes in their real income. The price of oil is a great modern day example of that. People notice every cent added to the gas price and the heating bill. Changes in the value of mony escapes no one, its just that there usually is very little the ordinary individual can do about it. Fiat currency is one of the chief reasons for that.

You are welcome to try to "undo" the Austrian view through academic dabate. I would be most interested to learn why someone would favour Keynesiansism or monetarism after all the chaos and turmoil they've brought about. As for the economic paradigm, no century have been as ridden with more economic disaster and subsequent human suffering than the 20th century, the century of Keynesianism and Marxism, of fascism and communism. This tragic and destructive trend has continued into the 21st century, and what does it have to show for itself, less than a decade into the new century? This is what:

Two massive American invasions and ockupations, the almost complete breakdown in Euro-American relations, continued civil war and ethnic cleansing in Africa, war between Russia and Georgia, the dot.com bubble which prompted one of the most expansive spouts of monetary policy in American history, now errupting in the credit crisis which is already spreading from America to Europe, the US national debt closing in on USD 10 trillion as a concsequense of ever new budget deficit records, civil liberties being suspended throughout the West (to name a few: the suspension of habeas corpus in the US, the Patriot Act and the acts associated with it, even Sweden has enacted a law giving the state unlimited authority to spy on its own citizens), not to mention the situation in Russia, China and the Third World.

I would just love to hear you or anyone explain what is so great about the Keynesian paradigm, that has been dominating world politics and economy since the early 20th century. However, I am not surprised you turned down my invitation, nor to find that it wouldn't have been much of a debate anyway. Going from Hitler and the Holocaust to fundamentalist may be an improvement, but far from good enough.

If you indeed are writing a book about "undoing the Austrian view" and the "centuries old very destructive global economic paradigm" you seem to connect to Austrian economics, I have some very happy news for you. The Austrian School has never in its 140 year long existance been the dominant view of world politics, economic or otherwise, because the Austrian view champions individual liberty and severly limited government. Politicians and special interest groups will obviously have none of that.

As for the centuries old paradigm, I assume you're referring to the so called free trade era during the 19th century. That era was preceeded by mercantilism and replaced by modern day protectionism at the end of the 19th century. You have already won general acceptance. So complete is your victory, in fact, that the Austrian School is virtually unknown despite the fact it is the oldest continual school of economic thought in the world. So put your writings aside and take the debate, your book is not needed. Among others, Paul Samuelson has done the job for you many times over. —Preceding unsigned comment added by Misessus (talk • contribs) 18:17, 10 August 2008 (UTC)

Austrian view censored on Wikipedia

I would ask whoever it is that keeps deleting the mentioning of the original definition of the word inflationt to back off. Inflation is -not- the "rise of the general level of prices". That is the new, main stream definition and is by no means correct, certainly not more correct than the original definition. If you want a balanced entry, you will stop deleting the mentioning of the original defintion. I'll keep posting it again and again. —Preceding unsigned comment added by Misessus (talk • contribs) 00:05, 10 August 2008 (UTC)

The article is all yours. Abuse it as you wish.

Kjkkkjj (talk) 00:16, 10 August 2008 (UTC)

I don't know if you're referring to me, but if so, I suggest you actually study the subject before assuming the role of expert editor. Inflation has an original definition, which is the one I've posted. The fact that main stream economists have opted to use another definition of the word, is regrettable. However, it does not make it the right and correct definition and therefore, Wikipedia should not present it as such. To be completely honest, I'm appalled at the incredible bias shown by the Wikipedia community on this entry, and I shall endeavour to correct this bias to the extent of my ability. Please note that I am merely adding to the existing text, not rewriting the entire entry. I think that the main stream view should be given space as well. However, I will not tolerate any undue, uneducated censoring of the Austrian view.

-Misessus —Preceding unsigned comment added by Misessus (talk • contribs) 00:41, 10 August 2008 (UTC)

Now, now, little Hitler. We are now uneducated. I never understood before why economists in general have a negative view of economists of the Austrian school. You made their view very clear to me now. Are you going to put us in the gas chambers if you could catch us?

Kjkkkjj (talk) 10:45, 10 August 2008 (UTC)

You are so "educated". I dare you to put your educated nonsense back in the article:

"Austrian economists differ from this view, maintaining that it is the central bank itself that is the root cause of inflation, because it is the institution which increases the money supply by creating new units of money out of thin air, unbacked by any commodity such as gold.".

You do not understand fiat money??!!!!! Now you want to tell us we are uneducated. If you cannot understand fiat money, which is one of the basic principles of the world economy, then you certainly should not edit any monetary articles on Wikipedia.

Tell me, for interest sake: Does no-one in the Austrian school understand fiat money? What a joke!! If that is true, then it is absolutely clear why the Austrian school has no credibility.

Kjkkkjj (talk) 11:28, 10 August 2008 (UTC)

I have censored your Austrian view

"that it is the central bank itself that is the root cause of inflation, because it is the institution which increases the money supply by creating new units of money out of thin air, unbacked by any commodity such as gold."

Kjkkkjj (talk) 11:37, 10 August 2008 (UTC)

Inflation is a rise in the general level of prices of goods and services in a given economy over a period of time. This is always a shallow definition of inflation, because it never points at the causation, namely the corrupt fractional-reserve banking system, that embraces monetary inflation. The central banks increase the Dollars / Currency in circulation. This definition is but the consequence of their act of monetary manipulation. —Preceding unsigned comment added by 67.187.16.35 (talk) 21:53, 2 March 2008 (UTC)

Idealogical reasons aside, the correct definition of "inflation" is directly related to the correct definition of "deflation". Inflation is defined as "an increase in the money supply, which often results in higher prices of goods and services." Deflation is defined as "a decrease in the money supply, which may result in lower prices of goods and services."

In 2008, the reason the Federal Reserve and U.S. Congress are injecting money into the economy (increasing the money supply) is that they fear the adverse effects of deflation more than the effects of inflation.Cadwallader (talk) 20:20, 29 April 2008 (UTC)

Inflation is certainly not just an increase in the money supply. If the money supply increases at the exact rate required by the increase in new real value created, then there will be zero inflation.

The DEFINITION of inflation is: Inflation is the destruction of the value of monetary items as well as constant real value non-monetary items over time. Inflation has two components: a monetary component: cash inflation and a non-monetary component: Historical Cost Accounting inflation.

The CAUSE of cash inflation is always an excessive increase in the money supply. What causes an excessive increase in the money supply is a complex economic process.

Historical Cost Accounting inflation is caused by the combination of inflation and accountants´ implementation of the stable measuring unit assumption - an Historical Cost Accounting practice.

It also does not "often" results in higher prices of goods and services. Inflation, always being caused by an excessive increase in the money supply, always results in an increase in the general level of prices, which can be described as an effect of inflation.

The EFFECT of cash inflation: Cash inflation destroys the real value of monetary items at the rate of inflation over time.

The EFFECT of Historical Cost Accounting inflation: HCA inflation will result in the destruction by accountants of:

(a) the real value of all companies´ retained income, share premium, capital reserves and other [excluding (b)] constant real value non-monetary items never updated. This destruction is at the rate of inflation. Plus

(b) the destruction of the real value of the issued share capital of all companies with no well located and well maintained land and/or buildings or other variable real value non-monetary items able to be revalued at least equal to the original real value of each contribution of issued share capital. This destruction is at the rate of inflation. Plus

(c) the destruction of a further unknown amount (less than the inflation rate) in the real value of constant real value non-monetary items not fully updated, e.g., salaries, wages, rents, fees, royalties, retainers, income taxes, company taxes, value added taxes and all other constant items not fully updated.

To summarise: The EFFECT of Historical Cost Accounting inflation is the destruction of value in constant items never or not fully updated.

Deflation is an excessive decrease in the money supply, which always results in a decrease in the general level of prices.

Reference:[1]

Nicolaas Smith (talk) 21:08, 29 April 2008 (UTC)

The "definition" as it appears in the article is not the definition, but the cause and effect of cash inflation only.

Nicolaas Smith (talk) 21:28, 29 April 2008 (UTC)

Argentina

Graphic is out of date, Argentina's inflation nowadays is between 5% and 10% (source: INDEC, national institute for statistics and census). If someone could change that, I would be very pleased.

supply and demand

The top disambiguation lines of an article are in case someone came to this article when they really meant to go somewhere else. I don't think anyone would accidentally type "inflation" when they were looking for "supply and demand".

If there needs to be a distinction made between different kinds of price raises, beyond what's already in the article, then that should be in the text of the article. (I don't think this is needed, but that's a different issue.) Cretog8 (talk) 19:03, 31 July 2008 (UTC)

Food "inflation" (simply a price increase caused by demand being greater than supply for one category of product) and fuel "inflation" (simply a price increase caused by demand being greater than supply for one single product) are not the same as inflation (a rise in the general level of prices of goods and services over time.)

See this Bloomberg article for "food inflation" being the increase in food prices and not inflation being an increase in the general price level.

[2]

"The Irish central bank said today that while food inflation may have peaked, it's ``not inevitable that oil prices will increase inexorably upwards."

In this article the word "inflation" is used 9 times meaning an increase in the general price level and once meaning simply the food price increase caused by demand being greater than supply. This is the case in almost all articles about inflation (an increase in the general price level) where inflation (simply an increase in price caused by demand being greater than supply) is used together with "inflation" being a rise in the general price levell with no indication that two different things are being stated. This is very ambiguous. Disambiguation would help under logical circumstances. Since it is generally accepted that the two meanings are willy nilliy mixed all the time by everyone causing great misunderstanding, I agree that that there should be no top disambiguation. The justification being that the confusing mix-up is completely generally accepted and Wikipedia is about what is generally accepted and not about facts as stated in Wikipedia policy. So I agree with you, in terms of Wikipedia policy, that you should exclude it.

Kjkkkjj (talk) 19:36, 31 July 2008 (UTC)

This article has left me horribly confused about inflation, when I thought I knew what it was. O well. In any case, all I'm saying is that what you're talking about isn't a disambiguation thing, but something to be clarified in the article. Cretog8 (talk) 19:44, 31 July 2008 (UTC)

What you're talking about is a conceptual issue which needs to be explained, simply redirecting someone to supply and demand isn't likely to help. Cretog8 (talk) 20:11, 31 July 2008 (UTC)

The mistaken concept is generally accepted, so there is no need to explain the correct facts - not in Wikipedia. Wikipedia clearly states that it is not about facts, but about what is generally accepted.

Kjkkkjj (talk) 20:15, 31 July 2008 (UTC)

Even if we tried, we would not be able to explain the conceptual issue you are talking about. We will be able to find references that show that "inflation" is used meaning a rise in the general price level. We will also find references that show that "inflation" is used meaning simply a price increase caused by demand being greater than supply. All of that will be allowed in Wikipedia. But, we will not find a reference that states that the same word is being used worldwide in the same articles with two very different meanings causing great confusion which is generally accepted. There will be numerous Wikipedia editors that will delete any comment like that as original research. So, sorry. There is nothing we can do about it on Wikipedia. Someone will have to publish it outside Wikipedia and it will have to be generally accepted before we can state it here on Wikipedia.

Kjkkkjj (talk) 20:44, 31 July 2008 (UTC)

Maybe an article can be started for Price Increases. In this article referenced statements can be made about what a price increase is. Referenced statements can also be included to what inflation is with a link to this article(Inflation). The article (Price Increases) can be left like that. The article can not contain any statements that the word inflation is being abused worldwide as I described above. It can perhaps be explained in detail in the discussion page of that article(Price Increases), but not in the article itself. Maybe then you will agree to have a top disambiguation link to Price Increases to this new page. But, this may be deleted by Wikipedia editors as not being in the spirit of Wikipedia. So, I think we will just have to leave the matter here. We are hamstrung by the fact that Wikipedia is not about facts but about what is generally accepted.

Kjkkkjj (talk) 21:04, 31 July 2008 (UTC)

Disambiguation link leading to another true but ambiguous statement

The disambiguation link "For other uses, see Inflate." leads to [3]

In this article titled "Inflation" it states that "Inflation is a rise in the general level of prices of goods and services over time." and in the above Disambiguation link it states: "Inflate can refer to:

Inflation, the increase in prices of goods over a period of time."

Can or should the Disambiguation page be changed or does the defintion of inflation on the Disambiguation page correctly refer to a price increase - which it does? Logically it should be left like that: as the definition of a price increase and not inflation being a rise in the general price level. This correctly demonstrates that inflation has these two meanings. It should thus be left as it is. To state that it is confusing in an article is obviously original research and not allowed in any article. The confusion is generally accepted and allowable in articles. Stating that it is confusing is original research and not allowable since there is no reliable third party reference stating that it is done worldwide and very confusing.

The generally accepted confusion is very well demonstrated by the fact that the Disambiguation link "inflate" on the "Inflation" article (inflation is an increase in the general price level) leads to the Disambiguation page with the link for "inflation, the increase in prices of goods over a period of time" leads back to the article "inflation".

Kjkkkjj (talk) 21:47, 31 July 2008 (UTC)

Actually I have this all wrong: The definition of inflation on the Disambiguation page should be corrected to inflation meaning an increase in the general price level.

Inflation being used to mean a price increase is not defined as such on Wikipedia. The fact that it is used with two meanings in the same article worldwide and very confusing is original research and has no place on Wikipedia. Kjkkkjj (talk) 22:43, 31 July 2008 (UTC)

Maybe the easiest solution for Wikipedia is to label the concept of inflation as a price increase as original research. That will serve and support/maintain the generally accepted state of confusion very well. We always have to remember that Wikipedia is about what is generally accepted and not about facts - as per Wikipedia policy. Kjkkkjj (talk) 23:05, 31 July 2008 (UTC)

CPI as measure of inflation

Wikipedia is about what is generally accepted. CPI is generally accepted as a measure of inflation. You ask anyone what was the inflation rate in Russia or the USA or China or Burundi in 1958 and they will give you the CPI rate. That is what is meant by generally accepted. Yes, there are other widely accepted temporary fashionable measures of inflation, like core inflation etc. CPI is generally accepted. That is the difference.

Kjkkkjj (talk) 12:41, 8 August 2008 (UTC)

Core inflation is the preferred measure of inflation by the Federal Reserve (it's the measure the Fed actually attempts to stabilize, because it is a better indicator of the effects of monetary policy than the CPI is). And other measures of inflation are used in other contexts: the GDP deflator is the one that is needed to compare real GDP between one year and another. And firms are likely to find the Producer Price Index more important than the CPI, because the Producer Price Index helps measure firms' costs. So these are all generally accepted measures of inflation. They are not temporarily fashionable: they are standard economic concepts which are all used to measure different kinds of inflation for different purposes. Some of them are less familiar to the 'guy on the street', but they are all familiar and standard and generally accepted by economists. 'Generally accepted' does not mean what is most familiar to those who are least knowledgeable. --Rinconsoleao (talk) 12:48, 8 August 2008 (UTC)

You may be American. Wikipedia is global. One of the current Fed regional chiefs favours CPI instead of core inflation. I think you will agree that 90% of all written material about inflation is about CPI. That is not really important to me. I use CPI. The rest is just a debating point.

Inflation is about the decline of the value of money. PPI does not lead directly to the decline of the value of money. I do not think PPI is an inflation indicator. Inflation has got to lead to the decline in the value of money. Inflation is always and everywhere a monetary phenomenon. PPI is a standard economic concept. It is not a measure of inflation. There are not different kinds of inflation. There is only one inflation: inflation is a rise in the general price level of goods and services over time. Nothing else.

It is more important to stop the tendency to call each and every price increase inflation. House price inflation, food inflation, fuel inflation and commodity inflation, for example, are all in fact increases in the price levels of these particular items and may or may not have something to do with the increase in the general price level of all consumer goods and services.

Kjkkkjj (talk) 16:59, 8 August 2008 (UTC)

Inflation = leads to a decline in the value of money is not the same as inflation = price increase

In the following contribution:

"While 'inflation' usually refers to a rise in some broad price index like the consumer price index that indicates the overall level of prices, it sometimes refers to a rise in the prices of some specific set of goods or services, as in "commodities inflation" or "core inflation".":

Commodities inflation is an increase in the price of only commodities. It has nothing to do with inflation meaning a rise in the general price level which leads to a decline in the value of money.

On the other hand, core inflation is a rise in the general price level excluding one or two products and leads to a decline in the value of money.

How is it possible to use the two concepts as equal examples of inflation meaning simply a price increase? It is an obvious mistake.

Kjkkkjj (talk) 17:13, 8 August 2008 (UTC)

I completely agree. Two perfectly standard, generally accepted uses of the word 'inflation' in economic contexts are: (1) a rise in overall prices and (2) a rise in some specific subset of prices. I supplied references for (1). There is also a reference for (2), using 'house price inflation', which I think you supplied, though maybe it was me, I don't remember. There is nothing wrong with mentioning both these standard, generally accepted meanings in this article(I'm assuming the disambiguation page is primarily for linking to noneconomic uses of 'inflation', such as Cosmic inflation and inflatables).

You are right that a rise in overall prices causes a decline in the value of money (more money is needed to buy the same basket of goods). A rise in some subset of prices need not necessarily lead to a decline in the value of money (though a rise in a few prices will in fact raise the overall price index by a small amount, unless there are some offsetting declines). So when we mention in the article that inflation causes a decline in the value of money, we are clearly talking about definition (1). There is nothing wrong with that. --Rinconsoleao (talk) 17:24, 8 August 2008 (UTC)

Logic is not a person´s editorial opinion

It is logical that it is confusing to use the word inflation meaning two completely different things side by side and intermixed in the same report about a subject, namely, inflation meaning only an increase in the general price level that leads to a decline in the value of money. Kjkkkjj (talk) 18:10, 8 August 2008 (UTC)

See : INCOMPRNSIBILE! This article is ununderstandable!!! 19:31, 9 September 2007 (UTC)

haha rad —Preceding unsigned comment added by 58.165.38.119 (talk) 12:38, 30 November 2007 (UTC)

That's unpossible! 81.230.43.177 (talk) 19:00, 11 June 2008 (UTC)

Kjkkkjj (talk) 18:17, 8 August 2008 (UTC)

You have all the right in the world and I am sure you can even find reputable references for it, to keep this article INCOMPRNSIBILE and ununderstandable.

I would have sincerely liked to make inflation more understandable to Wikipedia users. Kjkkkjj (talk) 18:24, 8 August 2008 (UTC)

Calculating monthly inflation rates

Zimbabwe now, Russia and Brazil before used monthly inflation figures. I would be interested in a little explanation on how these are calculated, in order to find the relationship between annual and monthly rates.--Peterk2 (talk) 09:16, 9 August 2008 (UTC)

It is the same as monthly compound interest.

Inflation is calculated on past consumer behaviour. Then it is projected forward on the all else being equal assumption.

Kjkkkjj (talk) 10:22, 9 August 2008 (UTC)

Discussion comes first!

Gregalston, you do not delete someone else's text before consulting with the author first! You claimed that it "Too much detail on Austrian view for lead)". It was one bloody sentence, which read "In contrast to these two camps, the Austrian School maintains that inflation is a distinct action taken by the state, meaning the increase of the supply of monetary units (inflating the money supply)". This belongs in the lead. Do not force your own personal opinions onto the Wikipedia community and this article.

Furthermore, the reference [8] covers the entire original definition, meaning the both the two first sentences.

As for your other contributions in the "Original definition" paragraph, they were quite good.

But again, if you have a problem with what has been published in the article, you take it up here first. You simply cannot go around deleting other peoples' texts. I can't believe I actually have to point this out... —Preceding unsigned comment added by Misessus (talk • contribs) 10:53, 11 August 2008 (UTC)

Thanks for your note. I think if you were to read your statement above and replace the relevant points with "insert your claims throughout existing articles without consulting with others" you may note that this is not in fact how wikipedia works. You do not wp:own this article, and nor do I.

Sometimes people add things, sometimes people delete things for various reasons. In this case, I contend that what the Austrian school maintains regarding inflation is not central to the definition of inflation (per mainstream economics, as is clearly indicated), and the Austrian position is (at any rate) covered in the rest of the article with the due amount of attention for a non-mainstream view.--Gregalton (talk) 12:07, 11 August 2008 (UTC)

Misessus, don´t mess with Gregalton. He owns this article and many others. Kjkkkjj (talk) 12:10, 11 August 2008 (UTC)

A bit of Austrianism

Dear Gregalton,

one of the first books written on the subject is Juan de Marianas book "On the Alteration (Debasement) of Money", written in the early 17th century. It is mentioned in Shostak’s article and I’ve listed it as “Further Reading”.

Inflation by means of debasing the currency is an age old means employed by the state, used to fund its own activities. Historically, these activities have mainly been warfare and imperialism. History is littered with examples of this. One notable example is the Continental Dollar, a completely fiat based paper currency printed by the American Colonies in order to fund their war of independence. It was declared that anyone who did not accept the CD as money, would be declared enemy of the nation. During the 20th century, both the WWI and WWII were largely funded by the central banks of the belligerent countries.

For more on this, you can read Lew Rockwells article "War and Inflation", which I've used as a reference. Thomas Di Lorenzo, Thomas Woods, jr, Robert Higgs and Ralph Raico have also done much historical work on this subject. Obviously, Jesus Huerta de Soto's treatise "Money, Bank Credit and Economic Cycles" is an indispensible book for anyone interested in inflation and the history of money. I've used this book as a reference as well.

The original definition of the word inflation has always been exactly that, meaning that the state purposefully increases the money supply as a means to fund various activities. The only reason there is a dispute over this over the meaning of inflation, competition and other key terms and phenomena in the economic science, is that the mainstreamers wanted to make economics more "scientific". This started in the 1920:s and went on through the 1930:s and 1940:s. To make it more scientific, they started to redefine key terms and introduced various methods of mathematical models. In short, they started to apply the methodology of the natural sciences on economics, which to me is completely incomprehensible, as economics is a social science. In a nutshell, the mainstreamers had physics envy. However, this envy is groundless, as there are axioms and economic laws that are as unyielding and uncompromising as any natural law. Sadly enough, the Austrian School seem to be the only school realizing this.

If the money supply is held constant, but the production of goods and services increase, this leads to the increase in the value of money, meaning the same amount of money will buy more goods and services. The money supply doesn’t increase by itself, it increases only as a consequence of inflation, meaning the printing of more units of money and expansion of created credit in a fractional reserve banking system. Under a 100 % gold standard combined with a full reserve banking system, inflation as we know it today would not exist.

As for it being “well-understood and well-known that inflation (as measured) is not driven just by the amount of money, but also by velocity”, that is only true according to the redefined usage of inflation. The Austrians reject this new definition, as it is a distortion of a several hundreds year old, well known and documented, deliberate action taken by the state.

As for the article itself. I would really much appreciate if you could explain to me what harm there is in giving the readers the ‘’’full story’’’ of a dispute, started by the mainstreamers themselves. The mainstream view is amply displayed, but I would have hoped and thought that any Wikipedian would be grateful to those who endeavor to give brief descriptions of another view, in this case the oldest continual school of economics, substantiated with a multitude of externally linked references. Am I mistaken in assuming this? —Preceding unsigned comment added by Misessus (talk • contribs) 11:10, 14 August 2008 (UTC)

Thanks. Could you provide the specific source that states that the original definition of inflation was the increase in the money supply?

Your argument about velocity is circular - if inflation is only the increase in the supply of money, then of course other concepts are irrelevant. This is why I specified inflation as measured. So, if you'll let me call inflation as measured "inflation-main" (taking no view on which is correct), what does Austrian school say about how velocity affects inflation-main?

And I have no issue that the Austrian and other non-mainstream views can and should be represented. My only point is how much. Encyclopedias favour mainstream views. The mainstream definition is that inflation is a measure of the general increase in prices. To wit, the article emphasises that definition. There is in the very first para a note that other definitions exist.

After that, there is simply no need to put great emphasis on the Austrian school, save in the articles about it, as it is not a mainstream school of thought.--Gregalton (talk) 13:20, 14 August 2008 (UTC)

Gregalton,

I recommend that you read Shostak’s article. It gives a brief history of inflation. You will find more detailed descriptions in many of the other books and articles I’ve referred to, for example de Mariana’s book and de Soto’s treatise. Rothbard, being an economic historian, deals with this as well. It’s all there, you just have to actually read it.

My argument of velocity is very forthright. In fact, how can you be any more to the point than to point out exactly what actually inflation is? The method of increasing the money supply have changed with the arrival of new techonology, the fractional reserve system and the final victory of fiat money over commodity backed money, but the basic principle and action remain the same, as do the effects.

As for the cause, if you follow the original definition of the word, you will find that cause of inflation is the state’s need of funds, as in more money to spend. It can borrow, it can tax and it can inflate. Of these three alternatives, inflation is obviously the most appealing. Borrowing is expensive and taxation is unpopular. Inflation, however, gives you lots of cash quickly and the effects of it doesn’t kick in for years. And once it does, you can blame it all on something else, usually the private sector and private citizens. The Continental Dollar was a great example of this, as anyone who did not accept the worthless peace of paper as money was declared enemy of the nation. There are stories of debtors who, after the CD was introduced, actually hunt their own creditors down, throwing paper money at them. The creditors, in turn, did what they could to avoid getting paid with the CD. Thomas E. Woods has a podcast lecture on mises.org in which he speaks of this.

The mainstreamers have been instrumental to the state in this matter. Thanks to the distorted definition of inflation, the state has effectively been given carte blanche to print as much money as it wants. This has created the finacial-industrial complex, as the banks benefit greatly from the continual stream new credit and the fractional reserve system. They can lend out billions and billions of created credit, and rake in endless amounts of real money in interest revenue. Again, the huge investment banks in the US is a great example of this very thing.

As for the state, it can fund whatever warfare or welfare programs it wants, buying votes left and right. When the depression hits, the politicians blame it all on the private sector, and gets roaring support from mainstream economists. What happened after the Wall Street crash is a great example of that, and we are seeing the very same thing now. So, is it any wonder that the politicians favour mainstream economics over Austrian economics? Is it any wonder the state prefers fiat currency over commodity backed currency?

I really don’t understand your position on this encyclopedia business. If someone is willing to devote his own time to adding, note ’’’adding’’’, the Austrian School to this article, why would anyone object to that? Especially since the mainstream view is quite obviously a disputed one and has no scientific ground. Be grateful instead, that someone makes the article you’ve worked on for so long more balanced and significantly raises its scientific level. Why on Earth would anyone endevour to purposefully keep an encyclopedia as unscientific as possible? That is completely beyond me.

Could you please provide the specific source (preferably page number and something accessible online) that says that this was the original meaning of inflation?

I don't find the rest of your comments to the point, despite the verbiage. If you accept that there are two definitions of inflation (even if you think one is "distorted"), you should be able to answer a direct question on it. Inflation-A (growth in money supply) does not lead directly to Inflation-M (growth in prices as measured) - neither directly in terms of time nor directly in terms of quantities. Different types of money also have demonstrably different quantitative effects. As far as I can tell, the Austrian definition seems to ignore this important point - one part of the answer to which is velocity of money - in favour of a simplistic definition of inflation (which can then be used in circular argumentation).

Whatever weaknesses mainstream economics may have, at least it's willing to accept that inflation as measured and increase in the money supply are not straightforward relationships, and it tries to figure out why that is the case. Rather than just repeating that inflation is incorrectly defined. (Okay, maybe so, but try to answer the question)--Gregalton (talk) 09:16, 15 August 2008 (UTC)

Gregalton

Like I pointed out, inflation is a very appealing way of funding state activity, because it creates funds quickly and the effects of it don’t show for several years. As a great case in point, the credit crisis in the US of today originates from the massive inflation and subsequent credit expansion around 2000, when Greenspan “saved” the US economy. The price of goods and services (including money) depend on a multitude of factors, inflation being but one of them, though a very important one. No Austrian has ever claimed that a 10 percent increase in the money supply automatically leads to a 10 percent increase in the general level of prices or a 9 percent decrease in the value per unit.

Austrians say that inflation is the result of inflating the money supply, which in turn erodes the purchase power of the inflated currency, thus leading to a nominal rise in prices. Mainstreamers say that the rise in itself is inflation, and that rising prices cause the erosion of the value of money. In other words, main streamers got it backwards.

Another case in point is Zimbabwe. No one can claim that it is the price level that has increased with several million percent, and that the central bank subsequently has been forced to print new money. However, this is exactly what the mainstreamers claim, if you follow the logic of their argument. Hyperinflation, wherever it occurs, is the ultimate empiric evidence that the Austrian definition, the original definition, is the correct one. I can understand that mainstreamers will deny all ‘’theoretical’’ proof that their argument is severely flawed, but how they can deny this empirical evidence still escapes me. After all, it was the mainstreamers themselves who introduced empirical methodology in economics.

If you actually would read any of the material I’ve linked to in the article, you’d find out that the origin and nature of money probably is the field that has been most examined and studied by Austrian economists. Furthermore, you have still to point out exactly how the Austrian argument is circular. Thus far, you have failed completely, which in part is due to the fact that not only do you read the material, you don’t even read what I write in our discussion. As for answering questions, maybe you could try to answer one of the several questions I’ve asked you?

- Misessus —Preceding unsigned comment added by Misessus (talk • contribs) 10:42, 15 August 2008 (UTC)

Sorry, you have the position of so-called "mainstreamers" wrong. That position is that inflation - the rise in the general price level - is the effect, not the cause. One substantial part of the cause is increases in the money supply. They don't "have it backwards" - they're just using the word to mean a different thing. In fact, you state above "inflation is the result of inflating the money supply". In other words, the cause and the effect are distinct, and you have used inflation in exactly the sense of mainstream economics to support your point.

Mainstream economics does agree that inflating (expanding) the money supply is one of the causes (and there are debates about how important the other factors are, but velocity is pretty much by definition one of the potential contributors). Because the link between the effect and the causes is not direct, it is analytically useful to distinguish, as the causes and effects can be measured separately. Since that is the case, please do tell what Austrians call the rise in the general price level - I'm assuming from your sentence above that they *also* use it in this sense. (Do they really not distinguish between cause and effect?)

Really, your point is like saying that stepping on the accelerator in a car IS acceleration (or speed if you prefer). The transmission mechanism and conditions mean that stepping on the accelerator have different acceleration or speed effects, and distinguishing between the interplay is useful.

And please stop asking me to read all of these works - I'm asking for a specific reference for a specific contention; surely you can find a page number. I find David Hume distinguishing quite handily between an increase in the money supply and the general price level, so the distinction is quite old, but I do not see the specific reference to the so-called Austrian definition as being the original or correct one.--Gregalton (talk) 11:15, 15 August 2008 (UTC)

One additional point: you say "Mainstreamers say that the rise in itself is inflation, and that rising prices cause the erosion of the value of money. " This is not what they say - they don't say that a rise in the general price level causes the erosion of the value of money, it is the erosion of the value of money.--Gregalton (talk) 11:26, 15 August 2008 (UTC)

For a source (including page), see the following summary of Ricardo and the Bullionists dispute: "this was the cause of inflation or, to use the language of the day, the cause of the depreciation of bank notes. Pg. 129.--Gregalton (talk) 11:28, 15 August 2008 (UTC)

I think we are missing the point by arguing about which theories are right and wrong here. It is not for Wikipedia to pronounce on this and it is obvious that there will never be any agreement. Lets not worry about this. What we have to do is write up the subject in a neutral way. Neutral does not mean that non-mainstream views get equal billing with mainstream ones but it does mean that significant non-mainstream views should be mentioned briefly in the main article and are entitled to an article of their own. When they are mentioned this must be done in a non-promotional way and clearly labelled as non-mainstream alternative views so that the reader is not deceived as to where the orthodoxy lies. I am not knowledgeable in this area and I hold no view on whether this "Austrianism" qualifies as significant but this must be decided by the extent to which it is published and analysed in economic and political circles. Its actual sanity is irrelevant. --DanielRigal (talk) 12:36, 15 August 2008 (UTC)

Gregalton,

When you talk to mainstreamers, especially Keynesianists, they say that inflation is the rise in prices, that inflation means the rise in prices. This was what this article used to say in the very first paragraph.

The big difference between the mainstream and the Austrian views is, as I understand it, that the Austrians say that inflation means increasing the money supply, a distinct action by the state, the effects of which is rising prices, whereas mainstreams look for various reasons as to why the price level rises, and calls the rise itself “inflation”. This is also what the media and the politicians say. Whenever you hear someone who is not an Austrian say “The inflation last year was 4 %”, they mean that the general level of prices rose with 4 %. It is this usage of the word “inflation” that the Austrians reject.

You misunderstood my point. The word “inflation” is a noun, the word “inflate” is a verb. The verb “inflate” means in this context to increase, and the increase is the same as the noun “inflation”. Thus inflating leads to inflation. The difference is grammatical, nothing more. This is, however, cause of much confusion, especially in some foreign languages. Also, as the word “inflate” can be used in other contexts, such as inflating your tire. The Finnish word for “inflation” is “inflaatio”, but there is no translation for the verb “inflate” that can be used in the context of inflating the money supply.

However, the point is that “inflation” as defined by Austrians is a specific, distinct action taken by the state in order to fund its activities, whereas the mainstreamers define it as some sort of complex economic phenomenon caused by various factors, over which we have very little control. This is why mainstreamers favour central banks. Like with the term competition, the mainstreamers have taken a completely straightforward economic term and turned into something mystical that needs to be modeled and explained. The Austrians on the other hand, are fully clear on what inflation is, how it is made possible and what the purpose of it is, and thus devout their time to examine its effects. The Austrian Business Cycle Theory is perhaps the most notable result of this ever continuing research.

I can tell you exactly what the Austrians call the rise in the general price level. They call it the ‘’the rise in the general price level’’. The main and fundamental reason for there even being a debate about inflation is that mainstreamers, in their effort to make economics more “scientific”, have taken a completely straightforward term the rise in the general price level and changed its name to “inflation”, thus opening up a can of imaginary worms, when the original meaning of the word inflation suddenly was without a specific term. Tell me, isn’t the phrase inflating the money supply a pretty obvious give-away of the actual meaning of the word inflation. Thus, the Austrians always say that inflation leads to a rise in the general price level. —Preceding unsigned comment added by Misessus (talk • contribs) 12:55, 15 August 2008 (UTC)

Daniel,

if were to follow your advice, Wikipedia would become the mouth piece of specific political views and agenda. I hardly think that is its purpose, considering the strict neutral stance it is supposed to take. —Preceding unsigned comment added by Misessus (talk • contribs) 12:58, 15 August 2008 (UTC)

I think this just boils down to a difference in terminology/semantics. It's quite clear what the mainstream definition is, and if that's the essence of the difference, I don't understand why you see imaginary worms. (And I recognize there is a connection between "inflating" and "inflation", but that does not change the fact of what the mainstream definition is).

I still do not see the documentation for the claim that this is the "original" definition, and I'm going to flag it as lacking a citation for now. If you can provide a page reference, please do.--Gregalton (talk) 13:49, 15 August 2008 (UTC)

Misessus, you said you do not understand what it means to "own" an article. I said: just watch Gregalton at work. He is brilliantly at work a the moment - completely contrary to what the spirit of Wikipedia is all about - as the "owner" of this site. He is destroying your contributions with Wikipedia rules that he applies as and when he needs them. He is removing your contributions one by one. He knows he will have his way in the end. He is a master craftsman in the Wikipedia way.

Misessus, are you ready to agree with me that Gregalton "owns" this site? Or not yet? Do you still need a few more Gregalton "applications" before you will agree with me?

Kjkkkjj (talk) 15:59, 15 August 2008 (UTC)

Misessus, if you knew enough Wikipedia rules and regulations, you may have a chance against Gregalton. To even find these rules is a very difficult task. Some of them are very obscure and hidden away. Gregalton will, of course, never point them out to you. I am sorry, but, I also do not know enough of them to help you.

Kjkkkjj (talk) 16:13, 15 August 2008 (UTC)

Kjkkkjj,

I will keep re adding all of my contributions that have been groundlessly deleted. I am beginning to see your point, however, but thus far I can't say Gregalton has made any factual claims to the site. I feel that I have substantiated all my contributions with reliable references and that all contributions have been fully motivated. As long as no one can show that I'm wrong, I'll make sure my text stays where its supposed to be. As I have all of my text in a word document, it is difficault or time consuming to undo whatever deletions Gregalton or anyone else makes. Thus far, no one has bee able to show that I'm breaking any WP rules and I'm quite confident that I am well within them.

But I do thank you for your head's up. It has made me more prepared and thus more able to respond. Thank you for that.

-Misessus —Preceding unsigned comment added by Misessus (talk • contribs) 16:49, 15 August 2008 (UTC)

Please can I ask everybody to adopt a rather more constructive tone. We are supposed to be working towards a consensus not fighting with each other. The polices are neither obscure nor hidden. There is no conspiracy here so please stop accusing people of bad faith. If anything is deleted as a matter of policy I am sure it will be explained by a link to the relevant policy. Things should not be repeatedly deleted or readded. Please read WP:3RR for details. This is not constructive behaviour even when you are in the right.

I am concerned that people are missing the point. Wikipedia is an encyclopaedia not a discussion forum. We are supposed to explain the world as it is, not argue about what is right and wrong in the things we write about. The key issue is notability. If a an idea, however crackpot, has significant coverage then we can write about it. It is not our role to endorse it, just to document it clearly and honestly. This is why we have a nice article on Phlogiston theory even though it is known to be completely wrong. Conversely, some people may be be working on great new theories that have not yet received significant coverage. Even if the theories are sound they do not belong here, at least not for now. This is why I urge you to stop arguing about the rights and wrongs of economic theories and just work on making the article as factual and useful as possible. To this end, please can we try to agree whether this "Austrianism" stuff really is notable and relevant to this article. If it is then it should be mentioned clearly and briefly as a countertheory to the mainstream ones, not mixed in with them in a way that makes the article confusing.

Please remember that all sorts of people will read this article including school kids and general readers who just want to know a bit more about inflation without getting sucked into arcane disputes over economic theories. We don't serve them well if we make a confusing, arcane or misleading article. --DanielRigal (talk) 18:04, 15 August 2008 (UTC)

DanielRigal, please read WP:NPOV. Since you write things like "this "Austrianism" stuff" which is certainly bad faith, I do not think you are the appropriate person to come and lecture us about neutrality and good faith. You are obviously not capable of seeing things in a neutral way when you write in that tone.

Kjkkkjj (talk) 19:04, 15 August 2008 (UTC)

Misessus, normally they ban an editor like me after what I have just told DanielRigal. Let´s see what they are going to do this time.

Kjkkkjj (talk) 19:15, 15 August 2008 (UTC)

Misessus, if they do not ban me, then they will at the very least leave a very heavily worded threat on my talk page associated with my user name. Let´s now wait and see.

Kjkkkjj (talk) 19:24, 15 August 2008 (UTC)

I am not an economist. I just spotted an edit war and wanted to try to offer some advice."Stuff" is just a vague term I used because I don't really know what "Austrianism"'s status is. It is not pejorative (you may be familiar with the phrase "good stuff", for example) but it is not a word I would have used in the article itself due to its vagueness. I can't help feeling that you are looking for trivial matters to take issue with so that you can avoid addressing the real issues and working towards a consensus on how to improve the article. (Remember the article?) This is not constructive. Anticipating getting blocked is not constructive either. I suggest you rethink your approach. --DanielRigal (talk) 19:39, 15 August 2008 (UTC)

See Misessus, there is the warning to me from DanielRigal. What did I tell you?

Kjkkkjj (talk) 19:53, 15 August 2008 (UTC)

It is called the Wikipedia way of doing things.

Kjkkkjj (talk) 19:54, 15 August 2008 (UTC)

DanielRigal

"This Austrianism Stuff"? Are you for real? The Austrian School is the oldest continual school of economic thought in the world. How's that for notability and relevance?

Ludwig von Mises and Murray N. Rothbard were the two foremost social scientiest of the last century, writing tens of books on both economic theory, history, philosophy and scientific methodology, in addition to hundreds, if not thousands of articels as well as lecturing and editing various economic journals. They are joined by the likes of Henry Hazlitt, Friedrich von Hayek, George Reisman and Ralph Raico. Austrian economists and historians are in very high demand today, for example Thomas Di Lorenzo with his books on Lincoln and now Hamilton, not to mention Robert Higgs with his unparallelled expertise on the great Depression and the New Deal, not forgetting Thomas E. Woods knowledge of and ability to present American history. Walter Block is also a best selling author. In the primaries, Ron Paul gained unprecedented grass root support, shattering the campaign contribution records with his money bombs. And every single cent he got came from real people, nothing came from special interest groups. How's that for notability and relevance?

As for making the article confusing. I'd take confusing over directly misleading any day. However, the article is nowhere near misleading, it is very much to the point. And the point is that since the 1920s, key words in the economic terminology have become disputed and thus subject to much discussion. This article shows exactly that. There are various views of the meaning of inflation and people can read up on what they are, or at least get a brief summary. Further reading is provided thanks to extarnal links, linking the reader directly to the very book or article cited. The problem clearly isn't confusing texts, but undue attempts of belittling and even cencoring relevant material. Attempts made by the likes of you, my dear friend. Oh and so you know, the original meaning of a word is always relevant.

If you want to moderate an article, go find one that deals with a subject you are familiar with.

-Misessus —Preceding unsigned comment added by Misessus (talk • contribs) 09:01, 16 August 2008 (UTC)

A question to Keynesians

Mises explained why socialism is unworkable as an economic system in his book ”Socialism”, published in the 1920s. However, it took the Soviet Union to get people to actually believe what to him was obvious from the start. Hayek warned about the effects of rampant inflation during the 1920s, while the foremost mainstreamer of the day, the neoclassisist Irwing Fisher proclaimed only weeks before the crash that no crisis was on the horizon. Hoover’s and FDR’s New Deal was a mix of Keyenesian economic theory and fascist policy, and it resulted in the most spectacular economic failure in the history of the US, and the worst social disaster since the War of Northern Aggression (inaccurately refered to as the American Civil War).

However, this has had no effect on either politicians or mainstreamers. It never ceases to amaze me how people who actually have PhD’s in economics still are able to claim, after all that has passed during the last century up to present day, that mainstream economics has anything to do with reality. While I’m not sure to which school you feel most connected to, I would like to hear your thoughts on this subject, as you clearly have a kean interest in economics.

-Misessus —Preceding unsigned comment added by Misessus (talk • contribs) 18:37, 14 August 2008 (UTC)

You seem to to be very strongly invested in a specific view. Please read WP:NPOV and ask yourself honestly whether you can write with neutrality on this subject. If you realise that you can not then maybe you could be of more use to Wikipedia contributing to articles on other subjects. I am not trying to be insulting. Most people find it impossible to write with neutrality about things they care about. --DanielRigal (talk) 18:14, 15 August 2008 (UTC)

Let me get this in before DanielRigal blocks me as he has already warned me:

Misessus, DanielRigal advises you to contribute to other articles since "Most people find it impossible to write with neutrality about things they care about." Logically the same applies to Gregalton.

Let us see if DanielRigal gives Gregalton the same advice in the name of neutrality. Gregalton seems to be very strongly invested in economics articles. Gregalton should please read WP:NPOV and ask himself honestly whether he can write with neutrality on any subject in economics. If he realises that he can not, then maybe he could be of more use to Wikipedia contributing to articles on other subjects. I am not trying to be insulting. Most people find it impossible to write with neutrality about things they care about.

Kjkkkjj (talk) 19:51, 15 August 2008 (UTC)

This should get me banned, for sure. It is not allowed to be this logical. This is taking normal logic too far. This certainly deserves a banning.

Kjkkkjj (talk) 19:57, 15 August 2008 (UTC)

Please DanielRigal, we are waiting for you to give the same advice to Gregalton, here in this space - in the name of neutrality.

Kjkkkjj (talk) 20:05, 15 August 2008 (UTC)

This is about the very basics of editing on Wikipedia: DanielRigal is right: no-one should edit any article he or she knows anything about. I realized this a long time ago here on Wikipedia.

Kjkkkjj (talk) 20:11, 15 August 2008 (UTC)

DanielRigal, you can still ban me. I know enough Wikipedia tricks by now :)

Kjkkkjj (talk) 20:16, 15 August 2008 (UTC)

I am not an Administrator. I can't block anybody. I have not threatened to block anybody. I am not even issuing any warnings on people's talk pages about this. I have offered my advice and that is all. If you want somebody to feed your martyr complex you will need to look elsewhere. This sort of bickering on talk pages is unconstructive and pointless but it doesn't harm the articles. I only care about the articles. (Remember the articles?) I had hoped that I could help get the discussion back onto a productive track where people could discuss which non-mainstream theories merited inclusion in a sensible way judged against the notability criteria. That has not been a success. I don't think I can say anything that will have any beneficial effect here so I will now leave you to bicker in peace. --DanielRigal (talk) 20:24, 15 August 2008 (UTC)

DanielRigal, you have said something that is very beneficial: Gregalton, Misessus and I should all look for articles that we know nothing about and edit those articles. We will have fewer problems with neutrality.

Unfortunately I don´t think any one of the three of us is that altruistic.

Kjkkkjj (talk) 20:39, 15 August 2008 (UTC)

DanielRigal,

I advice you to read my contributions and please note the word contributions. I have done nothing but add the Austrian view on inflation and I have substantiated all my text with extarnally linked refernces. However, some people here can't be bothered to read any of it, which is very sad indeed. Not once have I even come close to hinting that the Austrians are right and the mainstreamers are wrong. I reserve that judgement for the discussion page. However, when I started contributing, it said flat out that inflation is the rise in the general level of prices, which it clearly is not. Also, if you compare the amount of text (as in number of words) dedicated to the very thoroughly proven wrong theories of Keynesianism to my small tidbits of Austrianism, you'll find that it is not I who is strongly invested. As for playing the martyr, your last addition to this page was an Oscar worthy performance. If you want to talk about economics, I invite you to my talk page. Please do drop by. I love a good debate.

Kjkkkjj,

I am more and more beginning to see your point. My Austrian conttributions are merely more than "on the side" comments, just the odd note on the side of the "real" theory. Still, this Daniel fellow critizes me for being too strongly invested. I happen to be an economist and I happen to know a great deal about Austrian economics. WP is a free encyclopedia based on the voluntary contributions of knowledgable people. Well I know economics and I will be making sure no cencorship takes place in this article, no matter how much DanielRigal would wish me to go away. Thank you again for your support. We may have different views on economic theory, but we do seem to have a similar sense of justice and fairness.

-Misessus —Preceding unsigned comment added by Misessus (talk • contribs) 08:43, 16 August 2008 (UTC)

Austrianism and Monetarism

These two schools differ from each other very significantly, even on the subject of inflation. They cannot be slumped together. —Preceding unsigned comment added by Misessus (talk • contribs) 18:44, 14 August 2008 (UTC)

The article is finally starting to look like something

In all honesty, I'm actually kind of pleased with the article as it stands today. Sure, the lead isn't exactly accurate, but its close enough for Wikipedia. The lead and the "original definition" paragraphs are really quite ok. I may do some alterations and additions to the following paragraphs, although I think they're decent enough as they are now.

Who knows, maybe we'll actually reach a wording of this articles we all can live with. Wouldn't that be swell? :)

So, are we getting close to a handshake on this article? Misessus (talk) 07:53, 17 August 2008 (UTC)

Inflation has a monetary and non-monetary effect

Inflation destroys the value of all monetary items and non-monetary items which do not hold their value in terms of purchasing power, as very recently stated by a top university professor. I think this should be re-added to the article.

Kjkkkjj (talk) 19:32, 17 August 2008 (UTC)

WP:Sock of indefinitely blocked user User:Nicolaas Smith. See block log [[4]].--Gregalton (talk) 19:44, 17 August 2008 (UTC)

Gregalton you are mistaken.

Kjkkkjj (talk) 19:51, 17 August 2008 (UTC)

I am one editor and I have one account. This is not an alternative account.

Kjkkkjj (talk) 19:55, 17 August 2008 (UTC)

By the way, inflation has a monetary and non-monetary effect. What is your view about that, Gregalton?

Remember what DanielRigal said: the article, remember?.

Kjkkkjj (talk) 20:01, 17 August 2008 (UTC)

Gregalton, this article is on Wikipedia and it is about inflation. It is not about your power here on Wikipedia. Try and remember that. If you cannot co-operate on this article without a show of personal power, maybe you should follow DanielRigal´s advice and work on another article.

Kjkkkjj (talk) 20:05, 17 August 2008 (UTC)

I repeat:

Inflation destroys the value of all monetary items and non-monetary items which do not hold their value in terms of purchasing power, as very recently stated by a top university professor. I think this should be re-added to the article.

Kjkkkjj (talk) 20:06, 17 August 2008 (UTC)

I repeat:

I am one editor and I have one account. This is not an alternative account.

Kjkkkjj (talk) 20:24, 17 August 2008 (UTC)

Is it correct for Gregalton to delete a statement that inflation destroys the value of monetary items that appear elsewhere in the article?

Kjkkkjj (talk) 22:06, 17 August 2008 (UTC)

Gregalton do you agree that inflation has a monetary and non-monetary effect?

Kjkkkjj (talk) 05:50, 18 August 2008 (UTC)

I am unofficially banned here on Wikipedia, but I can carry on as normal. Very strange indeed.

Gregalton how did you manage to get me banned unofficially? I am banned, with nothing on my user page, no messages, nothing. I can edit, but I am banned. The user Kjkkkjj does not exist on Wikipedia, that´s me, but I carry on as normal? Very strange set up. Kjkkkjj (talk) 05:55, 18 August 2008 (UTC)

I also received no notification about being banned. Strange. What are you up to, Gregalton? Kjkkkjj (talk) 06:05, 18 August 2008 (UTC)

You were blocked, Nicolaas, see here. You are now evading the block by using a different username.--Gregalton (talk) 06:15, 18 August 2008 (UTC)

There's no proof he's Nicolaas. In my view, it's that psychopath Zenwhat (his mindless robotic repetition that every Austrian is a Nazi supports this view). Where's the proof it's the South African rather than the Zenwhat, the psychotic little leprechaun?--BuddhaLives (talk) 10:23, 18 August 2008 (UTC)

Gregalton, congratulations. This was a really quick snuff job. You got me banned and eliminated overnight. Did you not go to sleep last night? Stayed up all night just to kill me off. There was or were a message or messages on my user page, but, before I could read them, Gregalton got someone to delete my username. So, I am deleted, but everything is like normal. I can edit,etc, etc. Life is getting tough for you here on Wikipedia, is it not Gregalton? Rules and regulations that apply to you too is really not what you like.

Gregalton it is best you keep on pretending you know something about economics. You should never go into law. Rules and regulations that apply to everyone is really not up your creek. Sorry mate. You should emigrate to a country with a dictator as head of state. He would love you. Kjkkkjj (talk) 12:06, 18 August 2008 (UTC)

Gregalton, I don´t know what you are on about. My deleted account was not an alternative account. You should never go to court. You will lose hands down.

Gregalton, I think people already realize you do not know very much about economics. Kjkkkjj (talk) 12:12, 18 August 2008 (UTC)

Oh, and btw Gregalton, you are mistaken. Kjkkkjj (talk) 12:15, 18 August 2008 (UTC)~

Gregalton, I am now one unofficial editor and I do not officially have an account on Wikipedia. My deleted account was not an alternative account. I do not officially exist on Wikipedia. Don´t ask me how that is possible or came about, because I honestly do not know. I have a suspicion that you do not know either, or, if you know how it came about, you will not reveal the process because you do not know how to abuse it for your purposes.

Oh, and another thing: It is official: Inflation destroys the value of non-monetary items that do not keep their purchasing power. More humiliation for you, isn´t it, Gregalton? Things you do not understand becoming officially recognized! What are you going to do? My, oh my! Kjkkkjj (talk) 12:35, 18 August 2008 (UTC)

Gregalton please leave this article alone

Gregalton, I think you should work on another Wikipedia article.

Maybe we can see who supports this request.

Kjkkkjj (talk) 21:11, 18 August 2008 (UTC)

Misessus (talk) 12:38, 19 August 2008 (UTC)== Expert needed ==

I really don't see how anything could be gained by flagging for an "expert". A Keynesian expert will support the Keynesian view, a monetarist will support the monetarist view, an Austrian the Austrian view.

I can speak only for the Austrian texts, but considering that every paragraph is supported by several sources, I should really like to know what the one who flagged for an expert is hoping to gain.

Could someone please explain that to me?

Misessus (talk) 18:13, 18 August 2008 (UTC)

You can go back on the histroy file and see which user flagged for an expert. Then you can ask the flagger why he or she flagged for an expert. Maybe someone here can tell you how to do that quickly.

X-11111 (talk) 21:05, 18 August 2008 (UTC)

BTW, has this article been downgraded?

X-11111 (talk) 21:16, 18 August 2008 (UTC)

I flagged it for expert help. I felt that there was too much edit warring going on and that there was a real risk that the article was becoming unbalanced. I am not qualified to fix this myself so I thought that the best thing was to get in some people who really know this stuff to make sure everything is OK. It would also help to take some of the personal nature out of the issue for there to be a few more people actively editing here.

I don't think this article has been formally reassessed and downgraded but it might not hurt to reassess it, or at least do a quick sanity check on the current assessment. That said, I am not asking for it to be downgraded.

I don't agree that it is a waste of time to tag for expert help. A true expert is able to understand all viewpoints and write about them all fairly without giving undue favour to his own position. This is exactly what we need. --DanielRigal (talk) 21:57, 18 August 2008 (UTC)

DanielRigal, I agree with what you say. I also agree with what Misessus says. Inflation is such an important process in the world economy that it is going to be difficult to find a truely neutral person. The reason being that no-one knows the complete right answer. All the schools of thought have a bit of the truth. I find it has enriched the article a lot to give more prominence to the Austrian school although I think they are completely wrong rejecting fiat money. They are obviously completely correct in their money supply arguments. I am not an Austrian at all. I think we should try and accept that at the moment there is no known "correct" answer for inflation and we should try and take the best from all the different viewpoints - as we are doing. I think a lot more is still going to be discovered over time about inflation. I think to just blindly believe that the mainstream view is 100% correct is wrong. No-one knows the 100% answer. If we had known that we would have 0% inflation in the world today. 22:17, 18 August 2008 (UTC) —Preceding unsigned comment added by X-11111 (talk • contribs)

X-11111 (talk) 22:19, 18 August 2008 (UTC)

X-11111

The debate over inflation has never been about anything else than the actual meaning of the word itself. The first form of infaltion was the direct debasement of currency by mixing pure silver and gold coins with lesser metals. This was widely practiced throughout the middle ages. The word "inflation" first surfaced in the early 19th century with the explicit meaning of printing new units of currency, i.e. US dollars.

The Austrian Business Cycle Theory has throughly explained what happens when you increase the money supply in such a way. The theory is based on logical deductions from fundamental economic laws. Austrians generally do not view empirical studies as a proper method for examining economic theory. However, if you want empirical "evidence" proving the soundness of the Austrian Business Cycle Theory, they're all around you. The Wall Street crash with the subsequent Great Depression, the dot.com bubble in early 2000 and today's credit crunch. Just to name a few examples out of many.

As for having no inflation, should we know the whole answer. I'm sorry, but that is like saying "should we all know the horrors of war, we would have world peace".

The use of inflation (as defined by Austrians) is of great benefit to the state and the financial-industrial complex. Firstly, the state can use inflation as a "painless" way of funding its activity, e.g. welfare programs and militarism. The financial sector on the other hand, always get to use the created money first, when it still has most of its value. Also, the current system, which is based on fractional reserve and fiat currency enables them to create their own credit, thus earning billions and billions in interest on money they themselves have fabricated. The erosion of the purchase power of the new money is a process which true effect only becomes evident when it has trickled down the lairs of society, from the big investment banks at the top to the ordinary worker at the bottom. In addition to that, the protection the big banks and other GSE's enjoy make them obviously more prone to give loans to people who can't pay. After all, with all those billions of fake credit lying around, you have to give it to someone.

Inflation has always been a means to an end for the state and its preferred businesses. This was a known fact as early as the beginning of the 17th century, when Juan de Mariana published his book "De Mutatione Monetae", in which he warned of the dangers of dilluting the Spanish silver coin with lesser metals. You see, just because something is bad for the people, it doesn't mean that it isn't good for the state. The state and the people are two entirely different things who generally have entirely different interests. And yes, that applies to a democracy every bit as much as to a dictatorship.

This debate isn't about who's right, it is about who sticks to the original, documented defintion of the word inflation, and who is helping the state covering up what inflation is all about. I think we all know the answer to that question. Is there any wonder then, that the politicians have always preferred the mainstream schools?

Misessus (talk) 07:01, 19 August 2008 (UTC)

I think the original definition of a word is not as fundamental as you claim. Language changes over time. Many words have changed meaning dramatically. "Gay" is a particularly obvious example of a word changing meaning. We can, and should, note older meanings of words but the language we have to use is the language that exists now and is documented in contemporary dictionaries. This isn't 'Ye Olde Wikipedia'.

I know that sometimes one can feel that language has developed in a negative way and to want to change, or change back, the meanings of certain words. It is an impulse to be resisted because the struggle is futile. To attempt to use words differently from their accepted definitions is only going to cause confusion. We have to take the language as it is and explain things as accurately as possible within that framework. --DanielRigal (talk) 11:14, 19 August 2008 (UTC)

Daniel,

language does indeed change over time, but scientific terms seldom do. The word gravity has been around for a long time, and is never likely to change meaning. However, the change of the definition of inflation is a result of the mainstreamers wish to make economics more scientific, a campaign that went on during the 1920s, 30s and 40s. Inflation wasn't the only term that was changed, same thing happened to the term "competition". There is, however, no theoretical basis for this change. Subsequently, the whole reason for this debate is the deliberate change launced by the mainstreamers.

The word "inflation" meant exactly the same thing for about 100 years, before Keynes & Co came a long. Thus, the word "gay" is hardly comparable to the word "inflation". No one deliberatly changed the the meaning of the former, it evolved with the language. The latter, however, was subject to such a deliberate change.

So no, my friend, lingvistics and evolving language has nothing to do with this issue. Nothing whatsoever.

Misessus (talk) 12:38, 19 August 2008 (UTC)

Words are powerful. I agree that we should use the meaning of words as they are being used. It is also true that we are improving our understanding of inflation all the time. With that we also improve the use of inflation jargon to reduce the confusion surrounding the concept of inflation. Inflation still is a very foggy concept.

MainstreamEconomist (talk) 21:20, 20 August 2008 (UTC)

Again, the redifining of the word "inflation" has nothing to do with understanding inflation. Quite the opposite, in fact, as the redifining has lead to an almost total confusion of what inflation is all about. The origin of the word has been well documented through out history. When the word itself started to appear, it was clear to everyone what was meant by it. Those who favoured inflation, i.e. those who favoured central banking and national debt, called themselves "inflationists". In their view, central banking with all that entailed was good for the economy. They thought it was necessary for the state to be able to create money out of thin air.

No one, neither those who opposed the use of inflation nor the ones who favoured it ever quarrelled about what the word meant. No one disputed that inflation meant increasing the money supply through the creation of new units of currency. What they argued about was whether it was good or bad for the economy to engage in such activities. No one ever defined "inflation" as a "rise in the general level of prices". No one. The word existed for over a century, and the action itself was a widely practiced policy for centuries before that, prior to the appearance of present day mainstream economists, who introduced a completely new definition.

This is all well documented and this article offers externally linked references to parts of that documentation. Please just read it and accept the historical facts as they are.

We can debate the effects of inflation till the cows come home, but the original and thus true definition of the word is not subject to debate, no more than the meaning of the words "blood", "gravity" or "moon". The level of denial presented by mainstreamers never ceases to amaze me. Not only do they deny the disastrous results of economic policies based on mainstream theory (such as New Deal), they also deny documented, verifiable historical facts. It's simply amazing. Not even most politicians are able to reach that level of denial. —Preceding unsigned comment added by Misessus (talk • contribs) 10:34, 21 August 2008 (UTC)

Is it perhaps not true that, before fiat money, inflation was adding one or millions of monetary units to the money supply. With the advent of fiat money - what you call creating money out of thin air, a reality or fact that you are in total denial about (although the whole world economy operates like that and there is no sign that it is going to change), even more in denial than you accuse us mainstreamers of, so prices rise as the result of a complex of economic activities, at the same time the money supply increases as well as a third factor operating at the same time, that is, actual new wealth created in the economy. Since only a specific level of money supply is required at any specific level of wealth in the economy, the rise in the general price level indicating inflation, is the way inflation is revealed as well as measured.

MainstreamEconomist (talk) 11:45, 21 August 2008 (UTC)

Mainstream,

how about if you actually read what is being written? Where have I ever denied the existance of fiat money? For heaven's sake, the existance of fiat money is the very thing I and Austrians lament more than most, as it enables the state to inflate at will. We strongly oppose fiat currency and have been opposing it for over a hundred years. I know that mainstreamers don't know the meaning of the words "inflation" and "competition", but I would have hoped that you at least knew the difference between denying the existance of something and opposing the existance of something. Clearly, I gave you too much credit.

In fact, one of the main reasons for abandoning the gold standard in favour of fiat currency was exactly that, to enable the state to create endless amounts of new money. December 18th 2007, the European Central Bank created and injected 349 billlion euros, equivalent about half a trillion US dollars, in one swoop. Just like that. One can only imagine the complete inflationary effect that credit injection had, when expanded within the FRB-system. Such a feat would be practically impossible under a gold standard. And nor should it, as it leads to a massive erosion of the value of peoples' savings and real income.

The reason for the ever returning crisis is the very fact that the world economy is based on fiat currency, fractional reserve and central banking. As long as we keep going like this, recessions and depressions will always plague us, in addition to all other inflation funded activities of the state, like war and imperialism.

Wealth has nothing to do with money. Money is a medium of exchange that be virtually anything, the only requirement is that is an acceptable good for most people. Historically, many different things has been used as money, such as salt, grain, animal skins etc. However, through the market process, gold quickly evolved as the preferred means of exchange, because it is eminentely suited for the task.

The statement that increased production and through that increased wealth demands an increase in the money supply is utterly absurd. Even if inflation is an age old trick employed by the state, it is thousands of years younger than production itself. Thus, both production and wealth has increased for thousands of years before anyone came to think about increasing the money supply, proving that increased wealth does not require increased money supply. Total wealth consists of total supply of goods in existance. If the supply of goods increases and while the money stock remains constant, the value of every unit of money increases. Consequently, if the state inflates the money supply while the supply of goods remains the same, the value of each unit of money decreases. Also, it is completely impossible for the state, or anyone else for that matter, to calcualte the increase or decrease in the total supply of goods and adjust the money supply accordingly.

Inflation has never been about matching the supply of goods with the supply of money. From the very beginning it was a means to an end, a way for the state to fund its own activities. This has been throroughly documented through the past several hundred years. You need only to open a book and read about it.

-Misessus

Misessus (talk) 06:01, 23 August 2008 (UTC)

Misessus, Gregalton revealed that you are are a sockpuppet

Misessus, I see you are a sockpuppet according to Gregalton. He has your name down on at least two checkusers searches that are going on secretively behind the scenes in the dark and hidden away Wikipedia mafia world that many Wikipedians spend so much of their time in - like Gregalton.

That is the problem with Wikipedia - the Wikipedia mafia world: hidden away - operating while we try to improve Wikipedia articles.

Well, Misessus, for a sockpuppet, you have added a lot to this article. Congratulations. Being a despised idiotic worthless scum of the world sock puppet - according to Gregalton - you made one hellavu difference to this article.

Keep it up, you sockpuppet!!

X-11111 (talk) 23:18, 18 August 2008 (UTC)

Untrue. Misessus is not a sockpuppet. It was indeed checked under WP:RFCU, which I had requested given the previous disruptive and deceitful behaviour of another user. This procedure is not at all secret if (as, during your first series of visits you had read the instructions as I suggested, you would know).

You, however, are using two different accounts (X-11111 and Kjkjkkk or whatever), which is indeed sockpuppeteering and also a violation of policy.--Gregalton (talk) 04:39, 19 August 2008 (UTC)

I invite any investigation. The texts concerning the Austrian view are by far the most soucred texts in this article. Anyone who doubts what has been published, need only to click on the external link in every footnote and read for himself. Misessus (talk) 07:17, 19 August 2008 (UTC)

The Tag

Daniel,

I still don't understand the tag. Mainstreamers and Austrians will never reach consensus. The former have fabricated a new meaning of the word inflation, whereas the former hold on to the original definition. Because they disagree on the actual meaning of the word, they also disagree on the causes, effects and ways to control it. That will never change. You wouldn't get a consensus here, even if you'd raise Rothbard, Friedman and Keynes from their graves.

That said, can you please explain exactly how this expert would be able contribute? What exactly is it that you'd expect him to do? I'll leave the tag for now, but unless you can give a detalied and above all sensible answer to the questions above, I will remove it again. —Preceding unsigned comment added by Misessus (talk • contribs) 06:38, 22 August 2008 (UTC)

First up, I think you are mistaken in assuming that there is no such thing as neutrality in an editor on this subject. Somebody with a broad academic knowledge of economics (i.e. an expert) will understand all the economic viewpoints that exist in detail and be able to write about them all accurately.

Secondly, I think that you are right that there will be no consensus on the true measure of inflation but that doesn't matter. Our role on Wikipedia is not to judge who is right and who is wrong. Only to make sure that the various views on the subject are presented in a way which is clear and accurate and which is proportionate to the extent to which the views are held.

There are a few things I think a expert can help us with:

• An expert can determine whether the article currently over-represents or under-represents any of the viewpoints, or presents them unclearly. This is not just about the representation of the Austrian School. Some people have commented that they feel the article is not easy to understand more generally.
• An expert can decide if there are other schools of thought which deserve inclusion and how to include them. It may be that there are other non-mainstream views worthy of inclusion. It may be that we are remiss in not having any coverage of inflation in Communist theories and systems, for example.
• An expert can decide to what extent it is sensible to have the Austrian School view, which is based on Monetary Inflation in the Inflation article, which is about Price Inflation. The expert may decide to move some of the coverage to the other or restructure in some other way that makes things clearer.

I have a gut feeling about all this but my gut feeling may be wrong. My gut feeling is that the main coverage of the Austrian School view of inflation belongs in the Monetary Inflation article because that is the type of inflation it is concerned with. It might be that the only reason to mention the Austrian School in this article is to explain that it rejects the significance of Price Inflation.

I don't think it is possible to have a coherent article on inflation on the basis of assuming that there is one thing called "inflation" and that there is disagreement about its nature. I think is is why we get into disputes so easily. Your argument about a "fabricated" meaning to the word seems unproductive. To some extent all language is fabricated but we have to deal with the language we are given, learn Latin, or go to war with the dictionary. Instead, we need to be clearer that Price Inflation is one thing and that Monetary Inflation is another. Most economists believe in both but have different views of their relative significance and relationship. Once we state that clearly then we have a framework for talking about the various views more clearly using language which nobody can find ambiguous or objectionable.

--DanielRigal (talk) 17:25, 23 August 2008 (UTC)

Inflation is always and everywhere a monetary phenomenon: Milton Friedman. Inflation is one economic concept.

MainstreamEconomist (talk) 19:40, 23 August 2008 (UTC)

Daniel,

Being a neutral editor does not mean favouring all or none of the views presented, its about presenting the view you think is right without explicitedly saying so. The ability to present, for instacnce, the Austrian view without proclaiming it to be the one and true, without saying that mainstreamers are wrong.

So no, you are completely mistaken in asssuming that ”an expert with broad academic knowledge of economics” even exists, let alone would be able to contribute to this article. Economic scholars all adhere to one school or another, and are thus utterly unable to write accurately about all schools.

And on that note, exactly what inaccuracies about the Austrian School has been published? The inflation article has looked exactly the same for months, if not years, before I started adding the Austrian view. Since that, very little has been edited or contributed to the mainstream texts. You don’t seem to have any problem with them, so what you’re acutally saying is that you don’t trust the Austiran texts. Okay, that is your right, but bear in mind that over half of the footnotes in this article refer to Austrian literature, making the the Austrian contributions much more sourced, and therefore much more reliable, than the mainstream texts.

Thus, your first argument is countered.

As far as the Austrian view goes, it is presented very accurtately and thoroughly sourced, no problem there. The Austrian texts constitute but a fraction of the mainstream texts, so if you want to promote the mainstream view, nothing has been done to negate that, admittedly tragic and faulty objective.

Thus, your second argument is countered.

As for the things the expert could help us with. Firstly, its all about the Austrian view, to claim otherwise is beneath you. The only thing that has changed since the Austrian view started to appear is exactly that, the Austrian view started to appear. Nothing else was edited or added. I’m quite sure people feel the aritcle is not as easy to understand as it once was, because for the first time in their lives they are confronted with the original meaning of the word inflation and the history of the act of inflation, and that goes against everything they’ve been taught. That is always confusing, even traumtic. It is, however, the best way of gaining knowledge.

If people want to add other schools to the article, let them. We don’t need an expert to either permit or disallow that.

The third thing you wan this ”expert” to do is simply to cencor the Austrian view, which is what I’ve always said you and Gregalton have been wanting to do. This article is about inflation, not price inflation or monetary inflation, but inflation. Thus, the origin and history of the word inflation has a definate place here. The fact that the Austrian School is the only one who still maintain the original defintion is of course embarrassing to the whole science of economics, but that is the mainstream’s problem.

Thus, your third argument is countered. If you want to cencor the Austrian view, just say so. Trying to covering it up like this doesn’t become you.

As far as your gut feeling goes, I can tell you, you are wrong. Argument number four, i.e. your gut feeling, is thus countered.

As for a coherent article on inflation. If you want that, then you need only to remove all mainstream (and the lesser theories) text and move it to an aricle called price inflation. Then I’ll move some of the Austrian text to the article monetary inflation. Left on this article, on inflation, won’t be much more than the original defintion and some text about debasement of currency. It wouldn't be exactly accurate, but a lot better than what we have today.

About the evolving language thing, please stop bringing that up, it is embarrasing. Scientifc terms don’t change their meaning just because the language evolves. The reason for that is that scientific terms are not used in normal discourse, they are reserved for scientifc discourse. Inflation isn’t the only term that has been redefined by the mainstream economists, and the redefining has nothing to do the evolution of the language.

Now, as all your arguments have been countered and your true motives for wanting an expert have been revealed, I will remove the flag and keep removing it, should you decide to put it back.

Misessus (talk) 20:11, 23 August 2008 (UTC)

I am very sorry to hear you reply in this tone. Without an assumption of good faith it is impossible to discuss anything meaningfully. This is a pity because there are things in what you say which could be worked into constructive approaches.

I can honestly deny that I want to censor you or that there is any conspiracy to keep the Austrian School view out but it is clear that you would not believe me. I am disappointed that you have chosen to appoint yourself arbiter in these matters. I don't think you are any more able to take this role than I am. Your gut feeling is worth the same as mine. The only difference is that you place a higher higher value on yours than I on mine. Although you don't see it, this demonstrates the need for independent help to reach a consensus. Now let me turn all this around and ask you Why are you afraid of expert help being brought to this article? If the coverage of the Austrian School is, as you claim, all correct and proportionate to its relevance to the topic then all an expert is going to do is give everything a clean bill of health and maybe assist in improving the article in other ways. Would that be so bad? There isn't an article on Wikipeadia that can't be improved in some way or other.

Anyway, for what it is worth, this article has been considered confusing in the past and I do wonder whether it is clear and balanced. As a non-economist I don't find it an easy read. I was not being disingenuous in my reasons for calling for an expert. Of course, the extent to which the Austrian School should be covered was one of the main things I wanted considered, and I have not tried to deceive you of that, but I am also open to the possibility that it needs improvement in other ways. The article has been on my Watchlist for a while. I can't remember how it got there but I probably followed a vandal here. I have never been very happy with the article but I have lacked the ability to do anything with it myself.

I am not going to put the Expert tag back or make any drastic changes in the article. My hope was that an expert would help to get us to a point where everybody was happy but if you don't believe that such an expert exists then obviously they would be unable to do this. I will see how things develop. If I see things getting out of control I may tag for Requests for comment but I am not going to do that for now. --DanielRigal (talk) 22:03, 23 August 2008 (UTC)

I'm replacing the tag. Since Missesus is not interested in paying attention to what WP:NPOV means, and believes that only he carries WP:truth, further debate with him does not seem to be fruitful.--Gregalton (talk) 04:58, 24 August 2008 (UTC)

Daniel,

Could you please stop presenting yourself as a martyr? I answered each and everyone of your arguments, one by one, and countered them. The arrogance of your approach is starting to annoy me. The fact is that you presented your case, and I presented mine. It just happens that my case was stronger.

I don’t think there is any conspiracy at work. Conspiracy suggests something covert. What you and Gregalton are doing is anything but covert and is something I’ve seen many times before. Besides, you said yourself that one of the things you wanted this ”expert” to do is judge whether or not the Austrian view has got too much room. What is that, but pure cencorship? Moreover, you only got active when I started contributing, first by simply deleting the Austrian text without explanation. When I made it clear I wasn’t going to stand for that, you started this ”only the mainstream should be given exposure” –nonsense. When the folly in that was revealed, you moved on to the ”evolving languange” –scheme, politely suggesting all Austrian text should be moved to the ”monetary inflation” article. It's tragic.

Interesting that you are calling me a selfappointed arbiter, considering what you and Gregalton have been doing for God knows how long on this article and others. Talk about a complete lack of self awareness. However, I do suggest I’m more capable for that role, because I am in fact an economic scholar, whereas you are...what exactly when it comes to the science of economics? It may be that I place a higher value on my own gut feeling that you do on yours. If that is the case, the explantion for that was just given.

Again with this consenus business. You’ve state yourself that consensus can’t be reached. Now you want to reach it again. Make up your mind, will you?

I’m not afraid of the expert, I oppose it because it is obviously nothing more than a ploy to get your way. That is hardly a reason to call an expert, not to mention I will have no way of knowing who this ”expert” is. Suppose I got Walter Block to check out this article, and he’d say the Austrian view should be moved front and center and most of the Keynesianism should me removed completely, and the remainder put under the ”Other theories” section. Would you be okay with that?

The coverage of the Austrian in school is completely correct and neutral. The proof of that is in the numerous footnotes. Read the sources if you are in doubt. Exactly nothing was taking place on this article before the Austrian view was being added, so you were all obviously happy with it as it was. Equally clearly, you are not happy with having the Austrian view displayed at all, but can’t find any reason to delete it, and you certainly can’t question the correctness of how the Austrian view is covered, because of the footnotes. The only thing that has happened to this article is that it has been expanded somewhat. None of the other texts have been edited, so what is the problem? Well, the problem is that you and Greg don’t like the Austrian School and are making up rediculous reasons to get rid of it.

Nothing the mainstream economists write are easy to read, because its just a mishmash of math, modelling and made up concepts. So in the interest of making the article reader friendly, maybe we should start by deleting the Keynesian texts. What do you say to that?

Gregalton

I am removing the tag. Your childish slurr clearly shows your character. I’ve stated my case clearly by answering all arguments. I’ve never laid claim to any truths, only the right and reason to add the Austrian view to this article. The fact that you take such offence to that, is really tragic.

Misessus (talk) 06:21, 24 August 2008 (UTC)

For childish slurs, please refer to your comments on my talk page - where you also quite clearly stake you claim to the truth, stating that the Austrian school is "the only school alive today that recognizes the existance of fundamental economic laws. Additionally, it is the only school of thought that understands and maintains that economics is a social science".--Gregalton (talk) 11:26, 24 August 2008 (UTC)

Gregalton

I am quite certain the Austrian School is right, for various reason. One is that the Austrians are the only ones who actually treat economics as a social science and therefore don’t try to apply the methology of the natural sciences. Another is the grevious disasters mainstream economic policies have led to, such as the New Deal and the current credit crisis. A third is that the mainstream view always have been very popular with politicians, which is a clear sign that something is not right.

What I haven’t done, however, is to make the claim that Austrian School is the one and true school in the article. That is neutral editing, my friend, something you know absolutely nothing about. I may despise the mainstreamers and find their so called economic theory laughable, but I don’t say that in the article, nor do I delete mainstream text. Because I am a neutral editor, completely unlike you.

Oh and by the way, I undid your revisions. Nice touch giving ”peacockery” as a reason for edit...

Misessus (talk) 12:15, 24 August 2008 (UTC)

"Classical political economy"

I will restore the fact tag on the meaning that inflation under "classical political economy" meant increasing the money supply. I would clearly identify Ricardo with "classical political economy", and the essence of the Bullionist argument was that the Bank of England had overissued bank notes and led to "the depreciation of banknotes." Hence the depreciation and the overissuance were linked but distinct.

Quoting from Economic Theory in Retrospect (pg. 129): "Ricardo led the bullionists with the argument that the Bank had overissued and this was the cause of inflation, or to use the language of the day, 'the depreciation of bank notes.'" Hence in classical political economy one (increase of the money supply) was (Ricardo argued) the cause of the effect (the depreciation of bank notes - which this source explicitly says was the term used for inflation in the modern sense). In these texts I do not see the use of the term inflation directly, nor support for the contention that the term was clearly used to denote only the cause.

The Bryan article (which I presume is the source of this contention, but if there is another text referred to, please provide it) does not appear to support the contention either. On the contrary, it summarizes David Hume as "The idea that changes in the money supply affect only the money prices of goods, not their value, was championed by many of the classical economists". Contrary to the current text in the "original definition", I see no reference to the use or meaning of the word in the 18th century.

Perhaps I have misunderstood, however, which source exactly you are intending to cite as the source for this claim: if so, grateful you specify (which is in fact the meaning of the cite flag).--Gregalton (talk) 06:51, 24 August 2008 (UTC)

Propose reorganise

I would propose to move the sections on effects and causes higher up (above the discussion of "originality"), and some other parts, as I believe this would be of interest to more readers. Comments welcome.--Gregalton (talk) 10:49, 24 August 2008 (UTC)

I can see some sense in doing this so long as it is not moved so far up that we start discussing causes and affects before we have clearly defined what we are talking about. That said, maybe this is not necessary if we improve the earlier sections. Here are a couple of other ideas for better structure:

• Original definition
• Related definitions

becomes:

• Definitions of inflation
  • Historical Definitions (or Early Definitions)
  • Current Definitions

and

• Causes of inflation
• Other theories about the causes of inflation

get merged as:

• Theories about the causes of inflation

Does this help? --DanielRigal (talk) 11:19, 24 August 2008 (UTC)

I'm not sure: frankly, there is actually no debate of any meaning about the definition, just some disagreement about the history, which is likely not of much interest to most readers.--Gregalton (talk) 11:29, 24 August 2008 (UTC)

I would agree with Daniel,

"Original definition" and "Related definitions" could very well merge into one, just as it remains perfectly clear what the original definition was.

Also, I think "Causes" and "Other theories" could merge, they're one and the same any way and the headline "Theories about the causes of inflation" is much more neutral.

Doing this would accomplish two very important things:

• It would make clear that the definition is in fact subject to various interpretation, namely the original and the modern one
• It would make clear that because of that disagreement regarding the definition, there are varoius theories as to what causes inflation.

All in all, very good ideas, Daniel. A third thing it is likely to accomplish is to make the article easier to live with for both sides of the proverbial fence.

Misessus (talk) 12:22, 24 August 2008 (UTC)

Reasons for paring down of text

The comment by Missesus reverted saying "unmotivated deletion of text". It was not unmotivated, and explained in edits. If detailed explanations in each case are required, here we go:

Section in "original definition": "Today, increases and decreases in the money supply mainly result from actions by central banks, and the effects of increasing the money supply are magnified by credit expansion, as a result of the fractional-reserve banking system employed in most economic and financial systems in the world. In contemporary economic terminology, these would usually be referred to as expansionary and contractionary monetary policies.".

This text has nothing to do with what the section is about, the original definition, which is easily expressed as "growth in the money supply" or "monetary inflation" (which is linked to). Expanding on the mechanisms has little to do with the definition.

Section 2: copyedits in "measuring inflation". Edited the text which read "represents inflation, according to the main stream definition. But we are usually more interested in knowing how the overall cost of living changes, and therefore instead of looking at the change in price of one good, we want to know how the price of a large "basket" of goods and services changes. " The article is about the mainstream definition, no need to repeat; the rest (the "we") is non-encyclopedic writing.

Section 3: removed "Holding true to their definition, the Austrian economists do not alter their method of measuring inflation, but strives to keep track of the growth what according to their view is the "true" money supply." Obviously if one's definition is the number of chickens, one would keep true to that definition and count chickens; again, no need to repeat again that if one had a different definition, one would measure under that definition. The article establishes quite clearly which definition is being used.

Section 4: removed "As noted, this definition of inflation is rejected by the Austrian School, which maintains that inflation is an excessive increase of the money supply, which in turn leads to a higher nominal price level, as the real value of each monetary unit is eroded and thus buys fewer goods and services. Austrian economists also believe that inflation sets off the business cycle (see Austrian Business Cycle Theory) and hold this to be the most damaging effect of inflation as artificially low interests rates due to exessive increases in the money supply that leads to overly ambitious investment, resulting in clusters of malinvestments, which has to be liquidated as they show their unprofitability." Repetition again. Since it is referring to a different definition, the effects presumably differ. Note this is also covered in the Austrian section below.

Section 5: Removed "This would constrain fractional-reserve banking ensuring that money supply growth (and inflation) would never spiral out of control." Excessively detailed, not factual (fractional-reserve banking is not mutually exclusive of a gold standard), and makes bold claims that are not presented as claims. (And of course, if one defines inflation as money growth, and one stops money growth by fiat - voila! no inflation. As defined.). Why does this text also have to refer to inflation (price growth) when that definition is explicitly rejected.

In general, most of this is just repetition and article content that should be - and, shockingly, is! - in the articles on Austrianism and related. WP:Undue to reiterate in every section that Austrians disagree with the generally accepted definition - there's no plot here, it's just not that relevant.

I will be reverting now that I have clarified the reasoning, as requested. Please note wp:3rr.--Gregalton (talk) 16:17, 24 August 2008 (UTC)

Section 1 The text was very relevant, as it briefly described the transition from history to the modern world. It is quite common and very logical to do so.

Section 2. Its about mainstream text, its all yours.

Section 3. As the Austrian view is expressed in all sections, it makes sense to have a note of the Austrian view in this as well.

Section 4. Nothing more than plain deletion of all Austrian text from the ”Effects of inflation” –section. Completely unwarranted, and therefore revoked.

Section 5 A full gold standard would severly hamper the banks’ ability to create their own credit, as they would have to be able to convert all their notes into gold. The fractional-reserve banking we have today relies on fiat currency and the Fed as the lender of last restort. Under a full gold standard, this would not be possible.

In general, all you’ve done is to delete Austrian texts, because you think it doesn’t belong in this article. Well I’m sorry you feel that way. However, the Austrian text does belong in the article and I have therefore reverted your revision. And as for it being repetitive, it is important to show that the Austrian School is consistent and what that consistency leads when it comes to debating the causes, effects and ways of controlling inflation. This illustrates the differences in the views on the subject.

Misessus (talk) 16:54, 24 August 2008 (UTC)

Austrian Economics is given Undue weight

I'm shocked at the state of this article. Austrian economics is a fringe theory, and references to it should not be littered throughout the article. It merits perhaps a paragraph or two, but certainly not the weight it is currently given. The page gives the impression that there are two equally strong and valid views on the subject, as if there are two strong an equally valid viewpoints on whether the earth is flat or round. This violates WP:FRINGE and WP:UNDUE. If you have doubts that Austrian economics is a fringe theory, just check out how many self-described Austrian economists there are on the faculties of accredited universities, and how many peer-reviewed papers are published by self-described Austrian economists in economics journals based in accredited universities.

I have moved paragraphs on the Austrian view to the section in 'other explanations'. I have not deleted any content. However, it is my opinion that the section on Austrian views is overlong and needs to be pared down. It should not be moved back into the lead. That would violate WP:UNDUE. lk (talk) 14:28, 5 September 2008 (UTC)

You can be as shocked as you want, the fact is that Austrian economics is the oldest continual school of economic thought. It is far from a fringe theory. In fact, it is the only major economic school that still treats econoimcs as a social science and recognizes the importance of other social sciences in the study of economics, most notably history.

I'll assume your just a sockpuppet of Gregalton. List all your WP dos and don'ts you want. I will not allow the ignorance of mainstreamers confuse ordinary people who are curious about this very important and current issue. Whenever someone like you tries to pull a stunt like this, I'll be here to restore the balance and scientific value to this sorely abused article.

Misessus (talk) 08:10, 6 September 2008 (UTC)

Regardless of whether it is old or not, I entirely agree that the Austrian school is overemphasized here. Since this article is about the generally accepted definition of inflation, the Austrian definition has little to do with this article. And it certainly doesn't need to be repeated throughout the article (given it has little to no relevance).--Gregalton (talk) 15:31, 6 September 2008 (UTC)

The Austrian school is highly relevant, as it is the only school that maintains the original definition of the word. Also, through the Ron Paul presidential campaign and the campaign for liberty, the Austrian school is drawing every more attention.

And by the way, the relevance of an economic school is not decided by its popularity with politicians and the media. —Preceding unsigned comment added by Misessus (talk • contribs) 17:16, 6 September 2008 (UTC)

I'll reverse my statement about WP:FRINGE when there are self-described 'Austrians' on the Economics faculties of accredited universities, or when self-described 'Austrians' publish in peer-reviewed journals not published by their own organization, or when 'Austrian' economics is taught to undergraduates in accredited universities. Until then, please excuse me for regarding it as on par with Alchemy, Creationism and Global warming denialists – those other schools of thought that also refute the validity of peer-reviewed scientific consensus in their field. lk (talk) 19:16, 6 September 2008 (UTC)

Try actually studying economics and economic history. When you realize that economic policies based marxism, keynesianism, neoclassisism and monetarism (the mainstream schools) have lead to economic disasters (Soviet Union, the Great Depression, runaway inflation of the 1970s, dot.com bubble and the present credit crunch), you way wish to rethink what schools should be equated to creationism.

I would say that the main problem with this article is that it has mainly been edited by people who are not economic scholars and are not at all familiar with the field itself. There are a growing number of Austrian economists teaching in universities today, many Austrian authors have published best selling books on economic history, the academic debate between Austrians and mainstreamers have been going on for a long time.

The Ludwig von Mises Institute has been up and running for 25 years and annually host the "Mises University", where the professors and scholars of the institute lecture on Austrian economics and economic history. The Institute arranges several major conferences a year and publishes a great amount of articles, series of lectures, books and journals.

The mere fact you compare the oldest school of economic thought to alchemy just goes to show how ignorant you are of the field of economics. So my question to you is:

What are you even doing here? The same question could be asked of some other "editors" active on this article.

Misessus (talk) 21:39, 6 September 2008 (UTC)

Calling other editors ignorant as you have above is a personal attack. Not following basic guidelines of politeness of any community calls into question your own presence here.--Gregalton (talk) 22:12, 6 September 2008 (UTC)

Dear Misessus, Do drop me a note when you have a PhD in economics from a major university. In the mean time, I think it would be helpful if you could enlighten us all about where you work (Mises Institute?) or if you have any conflict of interest on this issue. Because you surely behave as if you do. lk (talk) 04:27, 7 September 2008 (UTC)

"The Ludwig von Mises Institute has been up and running for 25 years . . " Witchcraft has been around a lot longer but it is not mainstream thinking. As a long time subscriber to "The Economist" magazine (albeit for the quality of its foreign news) and having formerly been a professional banker working in the City of London for over 20 years I think I would have heard of the Austrian School if it represented a mainstream line of thinking, one that academics and professionals take seriously. I haven't and I am therefore inclined to back those here that believe that the article should not give undue weight to this.--Tom (talk) 21:59, 7 September 2008 (UTC)

"The Economist" search for Friedrich Hayek, most prominent member of the Austrian school, returns 44 results, while same search for John Keynes returns 114 results. That is not so big difference. -- Vision Thing -- 16:17, 8 September 2008 (UTC)

The modern day 'Austrians' claim Hayek, but completely ignore his contributions. Instead they quote only with Mises and Rothbard. lk (talk) 19:40, 8 September 2008 (UTC)

LK

I would have thought it was quite clear by know that you are not qualified to make statements about Austrian economists. Hayek is generally still held in high regard among Austrians, but he is by no means thought to be the most prominent member. He has also been the subject of harsh criticism at times. For instance, Walter Block wrote a rather scathing critique of Hayek's "Road to Serfdom". As said, he is mostly respected for his work on monetary theory. Among other things, he has received much praise for his contributions to the Austrian Business Cycle Theory. As far as my claims of some editors' ignorance here, your statement above just made that claim a lot stronger. Please keep your comments to that of which you have some knowledge, whatever that may be.

Misessus (talk) 19:51, 8 September 2008 (UTC)

Gregalton

You have yourself admitted to having virtually no knowledge of the Austrian School, despite the fact its adherents include several award winning economists and best selling authors. I'm sorry, that is ignorance, and stating that is not a personal attack. I also notice you haven't had any issues with people equating the Austrian School to creationism, witchcraft and whatnot. A little bias in play, perhaps?

LK

I don't think anyone here is willing to divulge any personal information about himself, I certainly am not. I've stated my case for the Austrian School and my criticism of mainstream economics on this talk page. Feel free to contest any passage that I've written. As for the conflict of interest, it is not I who are constantly trying to close out other schools with the explicit purpose of promoting the mainstream view. You and others like you are, so the conflict lies with you, not me.

Tom

The fact that you as professional banker for over 20 years hardly does you credit in this debate, especially not considering the current credit crunch, which is the direct result of massive inflation and credit expansion, something for which the central banks and major commercial banks are to blame. The financial-industrial complex, which has been dominating economic and monetary policy both in Europe and the US, have always been a far greater threat to economic prosperity than the much more infamous military-industrial complex. In fact, it was the major US banks under the lead of JP Morgan who made sure that the Federal reserve system was created, completely contradictory to the Founding Fathers and the spirit of the Constitution. The European Centralbank has operated in the very same way as the Fed, continually pumping huge amounts of created credit into the European banking system. On December 18th 2007 alone, 349 billion euros was created and injected to alliviate the so called liquidity crisis. This crisis was of course the direct result of overlending by the banks, chuffing away its excess reserves to anyone who'd borrow it.

It is hardly any wonder that bankers are as unfamiliar with the Austrian School as the political class. The Austrian School calls for a full reserve banking system with commodity backed currency. Should this be implemented, the banks would lose all their current priviliges and thus the ability to make billions and billions in profit on credit that doesn't exist. Talk about conflict of interest. The bankers don't know about the Austrian Business Cycle Theory because they don't want to know about it. They want to continue in the same vein, despite the ever recurring crises, like the one we are experiencing today.

<inserted comment> Nice rant, but all I said was that the Austrian School is IMHO not mainstream. I happen to believe that the loose expansion of the money supply by the commercial banking sector eaager to lend and maintain or grow market share has been a major factor in the inflation seen in certain sectors (notably housing); but that fits a classic monetarist view. I am old enough to remember how the Bank of England constrained exessive growth in UK commercial sector lending in the late 70s (or was it the early eighties?) by applying a so-called "corset" which penalised banks for excessive balance sheet growth and which reined in UK inflation very effectively. The central bank role was to constrain the growth in M3 ; nobody as I recall blamed the central bank for being the underlying creator of inflation. It was more or less expanding the supply of near money to meet demand. But this is getting us off the main topic of whether Austrians are mainstream or not. I still say not. --Tom (talk) 21:29, 8 September 2008 (UTC)

Tom

You equated the Austrian School to witchcraft and tried to draw authority from your claim of 20 years in the banking business. I merely showed your error on both points.

I suggest you read a little Austrian material. The expansion of the money supply within in the banking sector is a direct result of the fractional-reserve banking system, something Austrians have always been very critical of, precisely because FRB leads to credit expansion. Inflation means increasing the amount of units of currency. That happens both when the central bank creates new credit out of thin air and injects into the banking system, and when that credit is multiplied by the commercial banks. Austrians have been talking about this for a hundred years or so, long before anyone had ever thought about the monetarist school. The central banks and the FRB commercial banks go hand in hand. Without the former, the latter wouldn't work and without the latter, the former wouldn't be able perform its main function as effectively.

But one thing we do agree. The Austrian School does not belong to the modern mainstream schools. However, up untill the arrival and later dominance by the neoclassisists and keyensianists, the Austrian school was what one could call mainstream. Of course, the term "mainstream" wasn't really established back then.

Misessus (talk) 20:49, 9 September 2008 (UTC)

Vision Thing

Friedrich Hayek was by no means the most prominent member of the Austrian School. Ask any Austrian, and he'll name several economists who are considered more prominent. Ludwig von Mises is undeniably the foremost Austrian economist, arguably followed by Murry Rothbard. Carl Menger, the founder of the Austrian School is naturally held in high regard, as is Eugen Böhm-Bahmwerk and Henry Hazlitt. Hayek is mostly respected for his work on monetary theory and business cycle, and his criticism of JM Keynes. An interesting tidbit is the fact that Hayek, after having torn Keynes' early works apart, didn't even bother to read Keynes' "General Theory". According to Hayek, Keynes wasn't even worthy of being called an economist. And when you look at New Deal, which was largely based on Keynesian theory, it is hard do disagree with Hayek. However, Keynes was naturally popular with the political class, which is the only reason why he has had such an impact on the profession. As an economist, however, he was utterly dismal and has the dubiuos honor of being responsible for the greatest economic disaster in Western history. The only economist who surpasses Keynes in the history of mankind when it comes to causing human suffering is Karl Marx.

Misessus (talk) 16:45, 8 September 2008 (UTC)

Misessus, your explanations above sound very much in the vein of righting great wrongs, that the majority of economists, the media, the politicians, and the bankers are all terribly wrong and doing great damage. Whether you're right or wrong, that's explicitly not what should be in WP articles. As for Hayek, he's the number one reason I'm hesitant to call the Austrian school "fringe", because outside a narrow cadre of Austrians and libertarians he's by far the most prominent Austrian. CRETOG8(t/c) 18:31, 8 September 2008 (UTC)

(P.S. One thing which I remain fuzzy on is how much of an "Austrian" Hayek really was. For instance (following your comments above), I gather Hayek was less likely to support full-reserve banking and more likely to support its near-opposite "free money", unregulated competing currencies.) CRETOG8(t/c) 18:39, 8 September 2008 (UTC)

Creto

Consider the Wall Street crash of 1929, a direct result of enormous inflation during the 1920s (the money supply increased by an estimated 70 percent). The crash was one of the most, if not the most devastating economic disaster in the history of the US, and is still a legendary historical event. Millions of people lost all their savings, their businesses, their entire wealth, ending up indebted for life. Thousands committed suicide.

After the crash came the Great Depression, a period of immeasurable human sufffering which lasted for a full 15 years. No depression had ever lasted that long, not even close, nor has anyone come close to that in later years. Have you ever heard of the depression of the 1920s? You know, there was one, a post war depression. However, it didn't last for more than a year or so, because the politicians didn't try to fix it. Hoover and FDR went the opposite way their New Deal. We all know how that turned out.

And to that the recurring economic crises is the US alone after the Great Depression finally went away. Most notably the runaway inflation of the 1970s, the dot.com bubble in 2000 and now the housing bubble. They all stem from the same cause: massive inflation and credit expansion. And who are the culprits? The ones who create the money (the Fed), the ones who uses the money to fund budget deficits (the State) and the ones expand the credit, thus multiplying the detrimental effect (the commercial banks). And when the banks go bust, who bails them? The politicians, using either taxpayer money or created money from the Fed.

So who ends up paying for it all? The general public, both through increased taxes and through eroded money. Austrian economists have throughout the 20th century and now in the 21st century tried to make people aware of this fact.

However, I challenge you to find one single passage in the inflation article that even comes close to suggesting that the politicians and the bankers are out to make a profit by exploiting the ordinary person. All Austrian text serve no other purpose than giving the Austrian view, no more, no less. Why you or anyone else should have a problem with that is beyond me. Thus far, I have been given no other reason than the explicit desire to promote the mainstream view and make all other views obscure, preferably not appearing at all. That is a great shame and a huge embarassment for the whole WP community, one I'll be sure to expose.

About Hayek. Among Austrians, he is far from being considered the most prominent. And for good reason, because though he undeniably was an Austrian, his views on some subjects did differ from other Austrians (e.g. Mises and Rothbard). Perhaps the very fact that he was given the Nobel Prize (which he shared with his acedemic and ideological counterpart), a prize given by the Swedish National Bank and thus prone to favour mainstream econmists, is the clearest indication of him not being "as Austrian" as other Austrian economists.

Misessus (talk) 19:00, 8 September 2008 (UTC)

Specifics of inflation should probably remain here, but I'm going to suggest we concentrate the general discussion on Austrians at Wikipedia_talk:WikiProject_Economics#Input_requested_regarding_Austrian_School.--CRETOG8(t/c) 16:57, 9 September 2008 (UTC)

Problems with this article

There are many.

First, I agree with the above that the Austrian view is over represented. Like it or not, these days the Austrian School is a fringe school. Of course they should be mentioned (as should non-monetary theories of inflation) but this insistance on always emphasizing that inflation = increase in money supply is too frequent. Second, in the lead the statement that ""Keynesians" argued that real demand was often more important than changes in the money supply" is inacurrate and misleading. Certainly there were some who took this view, as there were those who emphasized supply side factors. But there were also many Keynesians who agreed that inflation was caused by excessive monetary growth (Tobin for example). In general I'd say that the mid century Keynesians just didn't pay that much attention to inflation (standard Keynesian Cross type models just assume fixed price levels). So I don't think that this representation of "Monetarists" vs. "Keynesians" is correct.

In the "Effects of Inflation" section the effect "a company tries to gauge and combat the costs of inflation" is not an example of rent seeking, rather just a straight up example of distortion of economic activity.

In "Other theories about causes of inflation" section the statement "Supply-side economics asserts that the money supply can grow without causing inflation as long as the demand for balances of money also grows." is problematic. First, "supply side economics" isn't really a school of economic thought. Second, this statement - that if demand for balances grows as fast as money supply then inflation does not result - doesn't apply just to supply side economics but also to Monetarism and most mainstream views. In an economy with increasing incomes the problem is excessive monetary growth not just monetary growth per se (hence, something like Friedman's 2% rule)

In addition the organization of the article is very poor.radek (talk) 01:23, 7 September 2008 (UTC)

Your observations are correct of course. Our time would be better spent fixing those problems rather than arguing about definitional issues. However, that is the problem with the 'Austrian' fringe on wikipedia, their continual harassment hinders progress towards better quality economics articles. lk (talk) 04:35, 7 September 2008 (UTC)

Radeksz, your contributions and assistance would be helpful. There have been a number of reasons on this article that attempts to improve things have got sidetracked, so new eyes would be great.--Gregalton (talk) 07:38, 7 September 2008 (UTC)

Proposed name change

Much of the argument appears to be about definitions, not about content. As far as I'm concerned, that's just a waste of time. As per Wikipedia:Naming conventions (precision), I suggest we move this page to Price inflation, so as to avoid any ambiguity. We can then replace Inflation with a disambiguation page leading to Price inflation, Monetary inflation, Inflation (cosmology), etc.... Let the user decide. lk (talk) 05:46, 7 September 2008 (UTC)

I disagree that this should be renamed. This is, as documented, the most common use of inflation, and there are disambiguation links in the first paragraph. The very first sentence says "inflation or price inflation".

The "users" of the English language have already decided, and I don't see how or why "other" definitions should be given any more prominence.--Gregalton (talk) 07:42, 7 September 2008 (UTC)

The same idea of renaming the articles occurred to me a while ago and I suggested it to Gregalton, who didn't think it was necessary. I can see both points of view on this. On one hand, the disambiguation links at the top should be perfectly sufficient, and I don't think we should be bending the structure of Wikipedia just to keep a few difficult people happy/quiet, but it may be that renaming makes things more manageable generally and offers a more logical structure to the average reader. The disambiguation page would need to be very clear that when people use the phrase "inflation" without qualification it nearly always means that they are talking about price inflation. --DanielRigal (talk) 09:51, 7 September 2008 (UTC)

I have edited the inflate disambiguation page in line with this discussion.--Gregalton (talk) 10:09, 7 September 2008 (UTC)

Lead

Wikipedia's guideline on lead sections says: The lead section should briefly summarize the most important points covered in an article in such a way that it can stand on its own as a concise version of the article. Current version fails to do that. -- Vision Thing -- 09:19, 7 September 2008 (UTC)

What do you think is missing?--Gregalton (talk) 09:25, 7 September 2008 (UTC)

Are you kidding? What is missing is any mention of other explanations and definitions of inflation. -- Vision Thing -- 09:57, 7 September 2008 (UTC)

Very first sentence - before the lead - reads "For increases in the money supply or debasement of the currency, see monetary inflation." That is a different definition. The lead directly and prominently indicates that changes in the money supply are generally agreed to lead to high inflation. So could you be more specific?--Gregalton (talk) 10:01, 7 September 2008 (UTC)

Lead should be "a concise version of the article". This article has sections on Austrian and other views on inflation that are not summarized in the lead section. -- Vision Thing -- 10:05, 7 September 2008 (UTC)

Insufficient reading of wp:lead, which also states "The emphasis given to material in the lead should roughly reflect its importance to the topic according to reliable, published sources." Wealth of mainstream economic literature rarely, if ever, refers to Austrian views. You may be correct in that the article has too much info on Austrian views, however.--Gregalton (talk) 10:08, 7 September 2008 (UTC)

Of course, we should first determine what are today's mainstream views on inflation. In doing so I believe that we will find that Keynesian view is overrepresented in this article. -- Vision Thing -- 10:46, 7 September 2008 (UTC)

For what mainstream views are, and what it is appropriate in an article, I think we can refer to WP:SOURCES. The preferred hierachy of sourcers are:

1. Peer-reviewed journals and books published in university presses
2. University-level textbooks
3. Magazines, journals, and books published by respected publishing houses
4. Mainstream newspapers

Special note should be made of WP:SPS, in general self-published sources are not acceptable, except when used as sources about themselves. Since 'Austrian' economists are seldom, if ever, published by anyone other than their own organization, almost all related documents are 'self-published'. This makes their writings unreliable sources about anything apart as a source for describing what 'Austrian' economists are and what they say. lk (talk) 11:01, 7 September 2008 (UTC)

I would also note that the use of the term "Keynesian" in this article is excessive, and seems to be used with some pejorative connotations, for concepts and arguments that are central to virtually all of mainstream economics. So, the term Keynesian may be over-used, but not necessarily the concepts.

Of course, I can find Keynes and Keynesian in almost any economics textbook, but rarely (if ever) Austrian sources or concepts.--Gregalton (talk) 11:18, 7 September 2008 (UTC)

Lawrencekhoo, it seems that you have misconception about importance and influence of Austrian school. They are not completely inside a mainstream but they are also not so fringe as you are trying to describe them. -- Vision Thing -- 12:18, 7 September 2008 (UTC)

That should be judged on the basis of each relevant part. As for how it relates to this article, one editor claims that the Austrian definition of inflation is different. Which is okay as far as it goes, but if so, their comments on monetary inflation have little to do with price inflation. It has been quite clearly established that the definition of inflation as used by almost everyone coincides with price inflation. Apart from being a semantic argument, it's an attempt to promote a specific, non-mainstream point of view in an article that is not about Austrian economics.

For analogy, it makes me think of the argument over abiogenic petroleum origin: the article on petroleum limits discussion of the abiogenic theory to essentially one paragraph, because it is most decidedly not the consensus, accepted view on the issue. That theory is rightly discussed in detail on the page dedicated to the theory.--Gregalton (talk) 12:38, 7 September 2008 (UTC)

Gregalton

Price inflation and monetary inflation are two very different things, on that we can agree. Also, none of them are synonym with inflation. Someone suggested that inflation should be disambiguated into the various forms of inflation, such as price and monetary. The origins could be left in the inflation article, with reference to the current dispute of the definition. Thus, everyone would first see what inflation originally meant and the be able to move on to the more current articles. This would illustrate the outspread and ongoing debate. And as Vision Thing already noted, not even the mainstreamers agree. Not even all Keynesians agree, not to mention the monetarists and neoclassisists.

This is an encyclopedia and it should give truthful information, not politically angled information. —Preceding unsigned comment added by Misessus (talk • contribs) 17:11, 8 September 2008 (UTC)

I agree that they are two different concepts, but in fact the references and sources clearly demonstrate that price inflation is the meaning commonly assigned to inflation at present. That is not in dispute. The article also disambiguates the two meanings before even the lead. I don't know what you're claiming mainstreamers disagree on, but the basic definition is increase in the general price level. You seem to be the only one claiming that this is politically "angled."--Gregalton (talk) 08:45, 9 September 2008 (UTC)

If you read the article, you get the idea that there's as much consensus of inflation meaning increased money supply as normal price inflation. And still, the claim was not sourced, which again isn't that surprising, because there really doesn't seem to be any, which is also the picture you get when you read the article.

As for politically angled. When people explicitly state that a certain view should be promoted, and that view is the one favoured by the political class, the article becomes politically angled. Reading through the talk page, you'll find that I'm far from the only one who thinks this article has been subject to severe bias. The problem is that you've had most of the others blocked or removed from WP. Speaking of political angle...

Misessus (talk) 20:54, 9 September 2008 (UTC)

Dispute Flag

Vision Thing has added a dispute flag. I'd be grateful if you could clarify which points you believe are disputed.--Gregalton (talk) 13:48, 7 September 2008 (UTC)

Don't you argue that this article gives undue weight to the Austrian school? -- Vision Thing -- 16:17, 8 September 2008 (UTC)

It certainly was a problem. This WP:FRINGE group got a run in just about every section of the article. I've made some changes in line with WP:WEIGHT.JQ (talk) 21:04, 8 September 2008 (UTC)

The Austrian school is not a fringe school by Wikipedia's policies. I think it would best to centralize this discussion at WikiProject Economics. -- Vision Thing -- 07:54, 9 September 2008 (UTC)

Thanks for clarifying what the flag was for.--Gregalton (talk) 08:48, 9 September 2008 (UTC)

JQ made some changes to weight as noted above. Has the issue been sufficiently addressed to remove the POV tag, or are there additional issues? If there are additional issues, please point to specific issues that are actionable within the content policies so others can address the issue. Thanks Morphh ^(talk) 15:06, 09 September 2008 (UTC)

Revising the article

I rewrote portions of the 'Effects of Inflation' sections. I also took out this lengthy portion (which I'm putting here for now):

"Many prices are "sticky downward" and tend to creep upward, so that efforts to attain a zero inflation rate (a constant price level) punish other sectors with falling prices, profits, and employment. Efforts to attain complete price stability can also lead to deflation, which is generally viewed as negative because of the downward adjustments in wages and output that are associated with it. In addition, if deflation means that goods are likely to be less expensive in monetary terms in future (that is, the value of the currency unit is rising), consumers have an incentive to delay purchases, which will in turn contribute to further reduction in the economy, potentially resulting in a liquidity trap. In contrast, with high inflation, consumers have the incentive to spend money as soon as possible, contributing further to inflation. In technical terms, high inflation may increase the velocity of money, while deflation can lower it, in each case impacting inflation more than the underlying changes in the money supply. Hence, moderate levels of inflation are generally considered less harmful than either high inflation or deflation.

With inflation, the price of any given good is likely to increase over time, therefore both consumers and businesses may choose to make purchases sooner rather than later. This effect tends to keep an economy active in the short term by encouraging spending and borrowing, and in the long term by encouraging investments. But inflation can also reduce incentives to save, so the effect on gross capital formation in the long run is ambiguous.

Inflation is also viewed as a hidden risk pressure that provides an incentive for those with savings to invest them, rather than have the purchasing power of those savings erode through inflation. "

My reason for doing so is that I do not want the article to be too long. Hence in the 'Effects of Inflation' section I opted mostly a bulleted list. Some of the above is already covered in that list. Some of that which is not I plan on adding in shortly. Any comments and suggestions are welcome.radek (talk) 22:39, 7 September 2008 (UTC)

The lead and the article in general

LK

Firstly, the term mainstream economics has been used for decades by all schools of economic thought. This talk page alone is littered with the expression and it is also used throughout Wikipedia.

Secondly, as noted not even the Keynesians agree on the defintion of inflation. The whole reason for there even being a debate is that there are so many conflicting views on what inflation is, what causes it, what effects does it have and how can it be controlled.

Of all the amazing things you've claimed and said thus far, these two definately take the prize.

Misessus (talk) 19:34, 8 September 2008 (UTC)

You make a strong claim there, please back it up with at least one citation from a peer-reviewed journal article or an economics textbook. As far as I know, undergraduate text books (of which I own several, free desk copies ;-)) all agree on the definition of inflation, and also about the long run causes. There is no dispute (except with 'Austrians'). lk (talk) 19:50, 8 September 2008 (UTC)

Of course the term 'mainstream economics' is well established. My point about the lead is that it is inappropriate in wikipedia articles to preface the name of the science with 'mainstream'. Eg, in the article about General relativity, physics is not prefaced 'mainstream physics'; in Evolution biology is not refered to as 'mainstream biology'. The terms exist, but it is inappropriate to use them in the lead. lk (talk) 19:57, 8 September 2008 (UTC)

The debate started when the some mainstream economists started to redefine various terms within the field of economics. As the lead stated before (and again somewhat oversimplified), keynesians and monetarists disagreed and still disagree on what inflation really is. The neoclassisists, who for some reason are completely ignored on this article, also offered their own view.

As for the undergraduate books. Yes, I've read different definitions in those as well. Then again, I've read undergraduate books and peer reviewed articles stating that the cartels in the late 19th century was responsible for lowering production and thus increasing prices in industries such as steel, oil, salt and other major industries. This "fact" led up to the Sherman Act of 1890. However, statistics show that the level of production in the 17 industries which were claimed to be cartel controlled, in fact had risen by many times the national average, and that the price had halved in some of them. That truth is not told in any textbook, of course.

I've also read books claiming that the New Deal and WWII lifted America out of the Great Depression, that Andrew Jackson was the forerunner of the New Deal policies and that slavery was the cause of the American Civil War. So you'll excuse me for not putting too much faith in the alleged textbooks on your desk.

As for the mainstream term. Physics and biology are hardly comparable, as the term "mainstream physics" is hardly as established as mainstream economics, if established at all. That is another difference between natural sciences and social sciences. In the former, you have to be able to prove you're right, and it is much easier to do so since empirical evidence is both possible and widely accepted. In the latter, all you need to do is to make friends with politicians. Your theories can be complete bollocks, such as Keynesianism and Marxism, but if you're well connected, that is what will be taught in the universities and what the economic policies will be based on. Tragic yes, but all too true.

Misessus (talk) 20:14, 8 September 2008 (UTC)

Anyone can claim anything. Citations, or it didn't happen. lk (talk) 20:35, 8 September 2008 (UTC)

Yes, you've proven to be quite capable of making extraordinary claims without citing them.

Within the economic profession, there has been an ongoing debate on inflation, competetion, anti-trust, eminent domain, externalities and several other subjects. As far as general consensus goes, it is actually quite rare in any social science, especially when compared to the natural sciences.

And as far as citations go, you didn't source your claim either. And how could you, how could anyone prove a "general consenus" on a topic that is so eagerly debated?

Misessus (talk) 20:42, 8 September 2008 (UTC)

Edit War

And the constant stream of incredible claims keep on flowing.

LK, you're accusing me of edit warring. Pray tell, what do you call what you've been doing on this page? Completely arbitrary edits, knowing full well they don't hold and that I will reverse them, only to scream three revert rule. Just how low are you going here?

Misessus (talk) 20:38, 8 September 2008 (UTC)

Monetary inflation

The article Monetary inflation appears to be a straightforward POV Fork of this one. It should be deleted or merged in here.JQ (talk) 22:05, 8 September 2008 (UTC)

Leaving aside any POV issues, my understanding is that monetary inflation is a quite separate thing and probably does not belong here. While the money supply affects prices it is possible for each to inflate or deflate separately. Merging here would only add to the misconception that there is only one sort of inflation and that there is disagreement as to what its true nature is, when almost everybody accepts that there are two different phenomena here, both of which are meaningful and valid.

If it should be merged anywhere, monetary inflation would seem to belong in Money supply.

As an aside, in the UK at least, it is most common to describe monetary inflation/deflation as "expansion" or "contraction" of the money supply rather than inflation or deflation, although both terminologies can be used and understood.

--DanielRigal (talk) 22:39, 8 September 2008 (UTC)

It is generally accepted that if asked what the inflation rate was in a particular year in the past in a particular country, we will be given one number: the CPI rate for that year for that country.

TaGR (talk) 23:14, 8 September 2008 (UTC)

What is a Fork?

TaGR (talk) 23:26, 8 September 2008 (UTC)

I would prefer to keep the monetary inflation article (which is, credibly, a separate concept) but reduce the fork-ish aspects and hold it to a far higher standard.--Gregalton (talk) 02:02, 9 September 2008 (UTC)

TaGR: see wp:POVFORK.--Gregalton (talk) 02:03, 9 September 2008 (UTC)

I've gone and edited the other article, mainly removing more repetition of the Austrian theory. There isn't a whole lot left after that.

You were quite right, JQ, the article was basically a POV fork. I still would prefer to keep it separate, however.--Gregalton (talk) 02:14, 9 September 2008 (UTC)

OK, that's a huge improvement and there's enough for a separate article, even if a bit stubby. I've removed the tagsJQ (talk) 05:10, 9 September 2008 (UTC)

Reverted wholesale by visionthing including tags. Grateful another editor takes a look at monetary inflation, which, in its current state, is just a povfork.--Gregalton (talk) 08:47, 9 September 2008 (UTC)

References

Does anyone have some reliable books we could use to generically use as a reference for a bit of the non-footnoted content in the article. If so, please create a Reference section under Notes, and add it in bulleted format. Morphh ^(talk) 17:30, 09 September 2008 (UTC)

Anyone object to Mankiw's Macroeconomics? I also have Farmer's Macroeconomics, and (you guessed it) Macroeconomics by Abel & Bernanke. lk (talk) 09:08, 11 September 2008 (UTC)

I've added Mankiw and Abel & Bernanke, in the comments I note the relevant chapters. Please use to cite liberally throughout the article. lk (talk) 10:26, 12 September 2008 (UTC)

Inflation in the long run

My understanding is that there is general consensus that in the long run, inflation is caused by money supply increasing faster than the growth rate of the economy. I.e. inflation = growth money supply - growth economic activity. Someone keeps editing this statement out of the lead. Is this controversial?

Unless there's something I'm not aware of, it seems to follow cleanly from MV = PY, as changes in M and Y dwarf changes in V in the long run. ie. velocity does not significantly grow or shrink forever. lk (talk) 09:04, 11 September 2008 (UTC)

It doesn't follow logically, since it could be that changes in P cause changes in M, for example. Identities can't imply causation. Nonetheless, I think it's generally agreed.JQ (talk) 10:33, 11 September 2008 (UTC)

I haven't noticed the edit on this, but agree. (There was a bit of back-and-forth some time ago, which recurs frequently, about how money supply growth = inflation, without any qualification such as "in the long run" or recognition of velocity - which makes all the difference).--Gregalton (talk) 10:51, 11 September 2008 (UTC)

The rate of inflation is simply measured by the growth of the money supply. However, the "net inflation", can indeed be measured as the growth of the money supply - increased production.

In the 1920s, the money supply in the US grew an estimated 70 % from 1920 to 1929. However, as the production increased so dramatically during the same period, the price level was relatively stable. The real downside of the runaway inflation was of course the crash of 1929, when all the bad investment that was made based on the created and expanded credit showed its unprofitability.

The crash spelled the end for neoclassisist Irwing Fisher's carreer and reputation as the foremost economist of the day, as he stated only weeks before the crash that no crisis was on the horizon. Naturally, he never regained his elevated position among economists after that. In sharp contrast to this incredible blunder, both Mises and Hayek warned years before the crash that the monetary policy would lead to disaster, basing their prediction on what would become known as the Austrian Business Cycle Theory. In the spring of 1929, Hayek stated that an economic collaps was imminent.

However, instead of heeding the advice of the Austrian School economists, presidents Hoover and FDR opted for Keynesianism. Their economic policy program, New Deal, was almost completely based on Keynesian theory. Its implementaion lead to the longest, deepest and most devastating depression in the history of the Western world. Only when the government started to abolish New Deal policies following the death of FDR, did the economy start to recover.

Therefore, it is very dangerous to confuse inflation with "net inflation". If anything, the Wall Street crash made that crystal clear.

Misessus (talk) 18:09, 11 September 2008 (UTC)

Misessus, I think you are fundamentally confused about the nature and purpose of Wikipedia. It is NOT a place to carry out ideological disputes, post one's opinions on various subjects or engage in original research and speculation. If you want to do that, start a blog. Wikipedia is an encyclopedia, and while some discussion on the nature of context is necessary on these talk pages, they are not meant to be a forum for a particular editor's opinions.radek (talk) 18:37, 11 September 2008 (UTC)

Yes they are, if you are of the right opinion. That has become crystal clear.

Misessus (talk) 20:51, 12 September 2008 (UTC)

3RR violation

I note a further violation of WP:3RR by Misessus, and a continued pattern of repeating the same reverts. I suggest that it's time for this user to stop or be blocked. JQ (talk) 18:55, 11 September 2008 (UTC)

If you could, please file a report at Wikipedia:Administrators' noticeboard/3RR. Since I have previously blocked that account for 3RR, it might be best if a different administrator were to handle it this time. Thank you. — Satori Son 19:03, 11 September 2008 (UTC)

Never mind - report already filed. An administrator should respond to it soon. — Satori Son 19:07, 11 September 2008 (UTC)

Suggestions to break the edit conflict

This conflict seems to be in regard to undue weight, along with an argument of fringe. It appears we agree that the viewpoint should be included, just dispute placement and weight. I think we can agree that it is a minority viewpoint on this particular topic. So the weight should proportional. This, however, does not mean that a complete understanding of that viewpoint should be excluded from Wikipedia - we strive to be comprehensive. The viewpoint can be expanded in an article about that minority viewpoint. So this article should maintain proper weight for the topic, but the Austrian School view on inflation can be further detailed in the Austrian School article or a sub-article particular to the Austrian view on inflation. There is currently a section already in the Austrian School article Austrian_School#The_Austrian_View_of_Inflation. This could be expanded with all the content that is being disputed here for inclusion in this article. This article would contain a summary (with a details, main, or see also link for more information), with the main bulk of the viewpoint (and criticism of the viewpoint) contained in the Austrian School article. So if anyone wants to read more about that viewpoint, we've maintained those details on the article about that viewpoint. Morphh ^(talk) 21:36, 13 September 2008 (UTC)

technical header

{{technical}}

This may have to be added to the discussion header.

The whole aspects of this article may seem too technical for the general audience.

http://en.wikipedia.org/wiki/Wikipedia:Make_technical_articles_accessible

88.105.91.219 (talk) 15:53, 19 September 2008 (UTC)

[Image:World Inflation rate 2007.PNG]

I'm having problems with the different inflation rates in the European countries, particulary the E.U.

Shouldn't the Eurozone considered to be a single region (with a single colour), where they use the same currency, the euro?

88.105.91.219 (talk) 15:58, 19 September 2008 (UTC)