Dylan Grice is out with a new note on inflation, which can be found below:
Regular readers of our irregular publication will be aware of our thoughts on in ation, but for those who are not we would summarize them thus: in ation is not measurable. We can summarize our views on money with similar succinctness: it is poorly understood. And as for the economy, we know only this: it is a complex system. From these observations can be derived a straightforward corollary on economic policy makers: trying to control a variable you can’t measure (in ation) with a tool you don’t fully understand (money) in a complex system with hidden, unobservable and non-linear interrelationships (the economy) is a guaranteed way to ensure that most things which happen weren’t supposed to happen.
One such unintended consequence of the past three decades’ economic experiments with “in ation” targeting has been the unprecedented in ation of credit which today leaves the world burdened with debt as it has never been burdened before.
In Issue we wrote about another unintended consequence of this monetary experiment, a redistribution of wealth from the poor to the rich and, relatedly, a growing distrust both within countries and between them. Since money is based on trust, we concluded, devaluing money devalues trust.
Now, with the help of Google’s fabulous Ngram Viewer (which allows users to search word usage in five million digitized books published since ) we’ve recently stumbled upon another possibility, which is that the past three decades’ hidden devaluation of money has caused a subtle but signicant devaluation of language too. is might sound abstract.
But language is the machinery with which we conceptualize the world around us. Devaluing language is tantamount to devaluing our ability to think and to understand. In ation, whether credit in ation or otherwise, messes things up because it sends false signals.