Inflation Makes Speculators of Us All


Theodore Dalrymple wonders on the corrupting effects of inflation on the character of a nation and its people:

…it is clear to me when I look at the value of what I have accumulated that I have done far better out of inflation of asset values than out of saving. Like millions of others I bought assets mainly of a non-productive nature such as property (to buy which I borrowed not up to the hilt, but according to what I thought I could comfortably reimburse even if interest rates went up to 20 per cent, and therefore did not make as much as I might have done had I been more adventurous). But if instead I had simply deposited savings at prevailing rates of interest, I could not have used the accumulated money to buy more than a fraction of what I now possess.

Good for me, and good for millions of others in like situation, you might say. We have all done very well out of it. Yes, but in the process the very values that we once thought of as bourgeois – thrift, honesty, self-restraint, etc. – have been destroyed. If slow and patient accumulation is the road to personal ruin, then the opposites of bourgeois virtues seem to become wise and prudent: extravagance, craftiness, lack of self-restraint and so forth. And such qualities are bound to extend beyond the economic sphere. Inflation has the effect upon character that the Black Death once had.

Inflation has turned us all into speculators….never has the need for speculation become quite as deeply entrenched in the popular psyche, including mine, as it is now, and inflation is at the origin of this. Never before has personal financial stability or survival depended so much, as it does now, upon speculation….

See Robert Samuelson on the (temporary) taming of inflation back in the early 1980s, from the January issue of Reason magazine.