QUOTE OF THE MONTH

'It is easy to see how such belief, according to which the creation of additional money will lead to the creation of a corresponding amount of goods, was bound to lead to a revival of the more naïve inflationist fallacies which we thought economics had once and for all exterminated. And I have little doubt that we owe much of the post-war inflation to the great influence of such over- simplified Keynesianism. Not that Keynes himself would have approved of this. Indeed, I am fairly certain that if he had lived he would in that period have been one of the most determined fighters against inflation. About the last time I saw him, a few weeks before his death, he more or less plainly told me so. As his remark on that occasion is illuminating in other respects, it is worth reporting. I had asked him whether he was not getting alarmed about the use to which some of his disciples were putting his theories. His reply was that these theories had been greatly needed in the 1930s, but if these theories should ever become harmful, I could be assured that he would quickly bring about a change in public opinion. What I blame him for is that he had called such a tract for the times the General Theory.'

FA Hayek