Can it happen here?
Sir: It is not at all clear from Nicholas Davenport's 'The Inflation Bogey' (February 2) why the hyper-inflation of the Weimar Republic cannot happen here. As he says, the German government was committed to a vast expenditure and was unable to finance this through taxation. Surely that is the position now in Britain. Between September 1972 and September 1973, the total value of notes in circulation rose from £4,050 million to £4,525 million, an annual rate of increase almost exactly twice the average of the three previous years. Now the Government is faced with massive social security demands
and presumably an increase in the lame duck population owing to the effects of the three day week whilst the same policy will hardly provide more taxable profits. It seems almost inevitable that the Government will ensure that the note printing industrY will be the last bastion of growth.. mania.
Instead of grasping at the latest fashionable straw — here a Royal Commission there a relativities report — our national witch doctors, posturing as economic experts, would be better employed examining the historY of past inflations. From Diocletian to Weimar, from Tudor England to revolutionary France one can see exactly the same course of events. The state expands, the currency is debased, the Government introduces some ford) of prices and incomes policy and then the system collapses. Reality re-asserts itself.
Is it all going to be different thi,s, time? Will the "fanatical Friedmanites remain frustrated? Or will we have the last laugh after cornering the wheelbarrow market?
David Farrer National Organiser, Anti-Dear Food Campaign, Neville House, Wendeas Ambo, Saffron Walden, Essex.
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