Premium Only Content

Myth #7: Deflation — Falling Prices — Is Unthinkable, and Would Cause a Catastrophic Depression
Recorded by the Mises Institute in the mid-1980s, The Mises Report provided radio commentary from leading non-interventionists, economists, and political scientists. In this program, we present another part of "Ten Great Economic Myths". This material was prepared by Murray N. Rothbard.
The public memory is short. We forget that, from the beginning of the Industrial Revolution in the mid-18th century until the beginning of World War II, prices generally went down, year after year. That's because continually increasing productivity and output of goods generated by free markets caused prices to fall. There was no depression, however, because costs fell along with selling prices. Usually, wage rates remained constant while the cost of living fell, so that "real" wages, or everyone's standard of living, rose steadily.
Virtually the only time when prices rose over those two centuries were periods of war (War of 1812, Civil War, World War I), when the warring governments inflated the money supply so heavily to pay for the war as to more than offset continuing gains in productivity.
We can see how free market capitalism, unburdened by governmental or central bank inflation, works if we look at what has happened in the last few years to the prices of computers. A computer used to have to be enormous, costing millions of dollars. Now, in a remarkable surge of productivity brought about by the microchip revolution, computers are falling in price even as I write. Computer firms are successful despite the falling prices because their costs have been falling, and productivity rising. In fact, these falling costs and prices have enabled them to tap a mass market characteristic of the dynamic growth of free market capitalism. "Deflation" has brought no disaster to this industry.
The same is true of other high-growth industries, such as electronic calculators, plastics, TV sets, and VCRs. Deflation, far from bringing catastrophe, is the hallmark of sound and dynamic economic growth.
For more episodes, visit https://Mises.org/MisesReport
-
9:09
Mises Institute
29 days ago $0.04 earnedInflation: True or Out of the Blue | Mark Thornton
1642 -
LIVE
Due Dissidence
9 hours agoSchmuley TRASHES Shapiro, Maxwell Sings For Pardon, Uhuru Doc Preview - Live From St. Louis!
1,182 watching -
LIVE
Lofi Girl
2 years agolofi hip hop radio 📚 - beats to relax/study to
254 watching -
LIVE
PandaSub2000
5 days agoLIVE 9:30pm ET | MADISON VR (The Scariest Game Ever Made)
76 watching -
2:34:32
Badlands Media
4 days ago"CODEX 9/11" - Premiering Aug 24th, 6pm ET
234K151 -
1:53:43
Nerdrotic
4 hours ago $0.22 earnedMysteries of 3I/ATLAS | Forbidden Frontier #113
27.4K3 -
2:04:21
vivafrei
1 day agoEp. 278: D.C. Peace Wave! Big Tish & Nipple Judge SPANKED! "Maryland Man" Trafficker FREE & MORE?
68.3K69 -
LIVE
Damysus Gaming
41 minutes agoBorderlands 3 - Part 8 - FL4K Time | Children of the Vault be Warned!
25 watching -
LIVE
Patriots With Grit
3 hours agoWhat You Should Know: Harmful Vaccine Ingredients | Dr. Bryan Ardis, D.C.
94 watching -
LIVE
This is the Ray Gaming
14 minutes agoSunday Night Live with the Boys | Rumble Premium Creator
47 watching