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@ ▄︻デʟɨɮʀɛȶɛֆƈɦ-ֆʏֆȶɛʍֆ══━一,
2025-01-06 01:33:29
https://m.primal.net/NUCe.mp4
Hayek on inflation, unemployment, 1975 interview.
Hayek argues that inflation stems from government actions increasing the money supply (through credit creation, for example), not solely from market forces like union or corporate power. Stopping inflation requires governments to cease increasing the money supply, even if it leads to a period of high unemployment.
To curb inflation, Hayek suggests the necessity of tolerating a potentially high unemployment rate (13-14%) for a year or more. This unemployment, he clarifies, results from the misallocation of labor during inflationary periods, not from a lack of overall demand.
Hayek acknowledges the significant social and economic hardship associated with high unemployment but emphasizes that prolonged inflation ultimately causes even greater harm. He believes there's no quick fix and that accepting short-term pain is crucial for long-term stability.
Hayek strongly opposes government intervention in the form of expansive fiscal policies (like tax cuts to stimulate the economy), price controls, and extensive economic planning. He views these as ultimately ineffective and potentially destructive to economic and political freedom. While he doesn't entirely oppose providing better information to industries, he's against actions that constitute genuine planning.
Hayek sees a direct link between economic policies and political freedom. He believes that unsustainable inflationary policies and government control ultimately endanger political liberty, citing the UK as an example where democratic processes may be unable to reverse harmful economic policies.
Hayek warns against the persistent belief that inflation is a beneficial tool for stimulating employment. He argues that this mindset fuels further inflation and delays the necessary adjustments needed to achieve long-term economic stability.
To protect savings from inflation, Hayek suggests investing in equities, acknowledging that it's not a guaranteed protection but offers a better chance than other options.
Hayek addresses the skepticism towards capitalism among intellectuals and economists, suggesting it arises from a desire to have deliberate control over economic systems.
Hayek predicts a severe economic crisis for Great Britain due to its high inflation and ineffective attempts to control it. He foresees a period of hardship, potentially leading to a complete change in economic policy.