“The right way of looking at this problem is to regard inflation as an economy’s reaction to a continuous and multiple strain on its resources. It is a reaction to extravagant and impatient claims; to a tendency toward excess in all fields and among all classes; to inconsistent and confused economic, financial, and social policies which disregard all time-tested principles; to the presumption of taking on too much at one time; to the recklessness of always drawing more hills of exchange on the economy than it can honor; to the obstinacy of always wanting to combine what cannot be combined. People want to invest more than saving allows; they claim wages higher than those corresponding to the rise in productivity; they want to consume more than current income can pay; they want to earn more with exports than the latter can yield the economy by way of imports; and on top of all this, the government, which should know better, keeps extending its own claims on the economy’s strained resources. Demands proliferate while the necessary cover of goods is missing. If any man should continually sin against all the rules of reasonable living, some organ of his body win slowly but surely suffer from the accumulation of his mistakes; the economy, too, has a very sensitive organ of this kind. This organ is money; it softens and yields, and its softening is what we call inflation, a dilatation of money, as it were, a managerial disease of the economy.
The trouble is that we lack counterforces of a spiritual, moral, and social nature. In the realm of ideas we no longer have definite convictions and guiding principles; in the realm of interests the anti-inflationary front is neither strong nor broad enough to meet the inflationary one, and, as we have seen, the welfare state makes gaping breaches in the front of those who have a vital interest in suppressing inflation. Wages and pensions geared to the cost-of-living index do the rest. The result is that respect for money and its inviolability has lost its force.”
– Wilhem Röpke, A Humane Economy (pp. 217-218)