Fiat Money Inflation Not Only Raises Prices but Also Undermines Division of Labor
The line for the self-checkout registers at my neighborhood Albertsons stretched into the store’s produce section. Is this human progress? I wondered, scanning my groceries—this just after I had filled my car’s gas tank at a not-so-convenient convenience store near work.
Not long ago, someone not only pumped your gas and cleaned your windshield but also checked your oil and tire pressure while you waited comfortably behind the wheel of your car. Gas retailers were once called service stations for a reason. Someone provided service. Now, gas is sold at convenience stores or big box membership stores, with consumers handling the hose.
Grocery stores are newer to the customers-do-it-themselves model and are still phasing it in. The few visible cashiers are always busy enough to encourage people to do the scanning themselves rather than wait for precious human help.
Locally, once it gobbles up Albertsons (which has already absorbed Vons) and Smith’s, Kroger may attempt to squeeze customers harder. Given grocery’s tight profit margin, asking for a bag of apples might garner the response “Here’s a sack. The ladder is over there, and the trees are out back.” Once upon a time, grocers had employees who wheeled groceries to your car and placed them inside, sometimes with a smile.
In the words of Murray Rothbard:
In class, Rothbard quipped, “Marx never seemed to worry about who was going to take out the trash.”
This breakdown of the division of labor, caused by the production of government fiat money, has had more damaging consequences than the disappearance of service stations and grocery store cashiers. People now have to worry they might run out of money before they run out of breath. Jörg Guido Hülsmann explains in The Ethics of Money Production that
Without fiat inflation, Hülsmann explains, hoarding gold or silver would be a perfectly acceptable form of saving. There would be no need to become proficient at stock and bond analysis. Money would not evaporate:
In today’s fiat world, one must become competent at either judging the direction of financial markets or judging the opinion of financial intermediaries who may turn out to be know-nothing hucksters or frauds. Hülsmann writes,
Most people are not emotionally equipped to handle their investments. Richard Oxford lists four mistakes individual self-investors make:
There are likely many more.
The tech world has put all sorts of gadgets in our hands, but prosperity and human progress depend on the accumulation of capital and the division of labor. The production of fiat money destroys both.
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