Author Description

his large-scale study of the German hyper-inflation is definitive in the English language. Written by a professor at Princeton University, and published in 1930, Frank Graham's treatment was so accurate and incisive that Ludwig von Mises himself recommended it time and again.The book begins with clarity about cause and effect."Germany, in common with other warring countries, departed from the gold standard at the outbreak of hostilities in 1914. On November 20, 1923, the German paper mark, after having fallen to an infinitesimal fraction of its former value, was made redeemable in the newly introduced rentenmark at a trillion to one."Further: "In 1913 the mark was solidly based on gold; in 1923 its value was, as one writer has said, something more ridiculous than zero."An economic historian who understands the relationship between fiat money and inflation is prepared to write a great history, and Graham does that here.The economics of this book are rock solid. He places strong emphasis on the strange behavior of business enterprises under hyperinflation. One might expect that business leaders would decry that inflationary path. The opposite is true."Many of the leaders of business were convinced that inflation was necessary to the rehabilitation of the German industrial organization; that only through a falling exchange value of the mark could essential foreign markets be regained; that the business profits which it promised, and indeed produced, were a prerequisite to the restoration of a sound peacetime economy."The narrative history here is deeply scientific, covering the economic history blow by blow. He covers the wartime background, the political factors that led to the inflationary choice, the regulation of business under inflation, price controls and their enforcement, the measurement of inflation, the effects on production, the devastation of national income, the gutting of genuine entrepreneurship, the losses on foreign trade, the surprising winners from t