Balance of Payments

0:00We are now approaching the end of the term, and therefore I think one must not waste the time in talking about things which are not too much important. The most important problem, the greatest fault made by the people, is the so-called doctrine of the unfavorable balance of payments. I don't think that there is something in the whole field of economic studies which is worse.

0:46There are other things which are also of the same type, the same degree of illusory ideas, but there is nothing which is worse. The Balance of Payment Doctrine, I would recommend you to write a book about it, because it is so very important as, from the point of view, that people have developed a radically wrong doctrine in order to and let us say to fight the good policies and to substitute for them ridiculously bad policies.

1:48That means we have in the whole field of money, we have this silly talk about inflation, never mention the real thing of inflation, but according to inflation, the increase in prices. And the main thing is that the people are safe, essentially.

2:39And the main thing is that people want to defend the activity, the actions of the government. The government inflates, the government prints money, increases the quantity of money. Why? Because the government wants to spend more. And then they say, this has nothing to do with rising prices. This depreciation of the monetary unit is due to you. Why do you drink champagne?

3:26Now, this silly doctrine can be very easily disproved if you point out what will happen If you don't buy foreign goods, if you stop drinking champagne and consuming everything else, it comes from abroad. Let us assume that every country considers foreign countries as non-existent.

4:24What will then be the fact that you will consume only champagne made in the country? You will not get any oranges because the oranges cannot be replaced by something else. But what will this mean? If you never do this, people argue in this way, all right, champagne is responsible. Let us forbid the importation of champagne.

5:12What will people, what will the Americans do who used to spend some dollars for buying champagne? They will now buy something and they will not take these dollars and give them to the government with compliments and say, now, we can't drink champagne, what could we do with the dollars? We can only give it to the government. Now, the same is true for all other articles, you know. In the year, 5,000 years ago, people consumed only what was grown, produced within their own district.

6:07We could go back to the same conditions. It is ridiculous to assume that anything else would happen. If we are sending champagne to the champagne manufacturers, these champagne manufacturers will use these dollars for Buying Something, which is produced in our country. Nevertheless, and this is the astonishing thing, the problem is not, our problem is not the problem of the so-called unfavorable balance of payments. Our problem is how could such a silly doctrine be accepted?

6:57This is the real thing. and the explanation could only be, there are some people who are interested in the preservation of this doctrine. People who want that you should spend the dollars you are spending for champagne for buying their products, whatever these products may be. Now you have this doctrine, accepted, taught, officially considered as the only doctrine and what happens?

7:57How can this? This is the problem of economics, not the problem of the importation or exportation. How do you, how do you change the situation? How do you, how do you change the situation? Get rid of the old, that doctrine. Of what? Of the balance of payments doctrine. How do you counteract this teaching? Because the, the government increases the quantity of money. And because it increases the quantity of money, the prices, both of domestic and of imported goods are going up.

8:49Yes, but how do you combat that doctrine? How do we solve this problem? How do you combat, how do you fight that doctrine? In explaining that there is another reason. That the reason why I have to pay today more for domestic things is the same reason. I have the government increases the quantity of money, therefore the prices are going up, Therefore the employees of the subway are asking for higher wages and therefore the government, if it wants to operate, or not only the government, whoever wants to operate the subway must pay higher wages and in order to pay the higher wages he must ask for higher fare.

9:55There is not the slightest opportunity given to explain this in a different way. To say, because we are drinking champagne, the French franc is going up and the dollar is going down, is simply a doctrine that is not even worth to be discussed, and you can't defend it. There are people in the administration today, though, who are fearful of too much increase in the money supply.

10:44Isn't this based on some understanding of the cause of higher prices? If they do not admit this, the higher praises, and... But they do. No, no, no. If they do not admit the whole doctrine, and then say yes, but not too much, you know. If you would say it is not... If somebody were to say, the best thing to improve conditions would be to burn down all our department stores.

11:31And if somebody were to object, yes. And if somebody were to object, he will say, don't burn down the whole department store. destroy only the upper floors, this is the thing, we have the scandal of economics, of so-called pseudo-economics consists precisely in this, that people are, all people are talking about the balance of payments. The Wall Street Journal, in their editorials, for years they've been blaming the trouble with the balance of payments on the inflation, and you wonder whether or not it sometimes doesn't penetrate, or it doesn't reach a wider audience.

12:26We have a bad balance of payments, no, this is the only, this is simply, and then, what What is the individual in this interpretation? Do you also have a bad balance of payments? Does an individual have a bad balance of payments? Of course it is possible, you have bought more, you have not the money, then it depends whether you did it because you were stupid or whether you did it because you were a criminal.

13:17And if you were a criminal, they say this man brought, let us say, champagne, drank it out, although he knew that he does not have the money to pay for it. This is one possibility. But if he did not know it in advance, if he was so stupid that he didn't know that he will not be able to pay, Then nothing happens to him. Then it's just a loss for the seller.

13:59There are these two Roman formulas. Caveat emptor, for instance. Caveat emptor means that when you buy something, If you buy a horse and this horse has some disease, then you can only blame yourself And this is the thing, that we still, that we do not admit, you know, people don't take this doctrine alone.

15:00They say it has also an influence. Point of bias. Do you realize what I mean? What has an influence? What happens if you criticize the stock trade, then they say that you cannot deny that the fact of the unfavorable balance of payment has some influence, no, it has no influence at all. There's nothing to go out, it's that people are buying and selling and then they discover that they have bought things for which they cannot pay.

15:51What they call, and what they call, and... You know, the thing was this, the government began to debase the currency. When this happened in the Roman Empire in the third century, it didn't have any international effects because there was no international trade at that time. The trade was Roman trade, and then there were some nations outside. When it happened in the development, in the ages of the development of foreign trade, then the result was that the exchange ratio between the domestic and the foreign money changed.

16:44It changed because the value of this money changed, Because the German money of certain German states was now lighter in weight of precious metals than before. What is the... you were just mentioning the Roman formula caviat emptor. What? I say you mentioned a few minutes ago the Roman...

17:31The Roman emperors. Caviat emptor. Yes. What relation does that have to what you are discussing tonight? Caviat emptor means that you... Let the buyer beware. Yes. But what relationship does that have to what you are discussing? Let the buyer beware. Yes, but what relationship does that have to what you are discussing? Concerning the prices of the things that you book. And this is one of these things, which 90% of what is published about these problems contains at least a little bit of this balance of payments doctrine.

18:19There are, yes, these people say it is true, this is also inflation, But you can't deny that the balance of payments plays a role, but I deny it. What they call an unfavorable balance of payments when you're spending, when you're sending more money abroad than you at the moment, it's because you're buying something. If you were to say, just buying something for which you don't have the money, that means to go to a shop and to buy something, the owner of the shop is full of confidence and since you, let us say, champagne, you drink it and then you say but I'm sorry, I don't have the money, I can't pay, you know.

19:22This is not a balance of payments problem, this is a window, you know. What is the Euro-dollar in all of this? What is the Euro-dollar? You said you were going to explain that. Yes. Now, the dollars are not, in big business, in greater trade, you do not take, you do not come with your briefcase and take out the dollar bills and pay with them. You pay with checks, that means with transactions, with the transfer of an account of dollars which you have.

20:22And these dollar accounts are of a different character. That means, they are not in domestic affairs, you have an account with the Chase Bank, if you have to pay somebody, you give him a check on the Chase Bank and he gets it from the Chase Bank. But there are various such accounts, which are not so simple, especially if you cannot get them to pay you when you are abroad, When you want to transfer into another currency, these various dollars mean you have an account with the bank, you have the dollars, but these dollars are only the power of the bank.

21:45Of course these dollars are only limited. You cannot change these dollars, especially against gold dollars. Abroad you can, though, can you not? There are hundreds of different types. But when the dollars are once out of this country, they are transferable eventually. The dollar was a quantity of gold and it didn't make any difference whether this quantity of gold was in your pockets, real gold, or whether it was on your account in a bank because if If you want the gold, you could go to the bank and you could say to the men there, I want pieces of gold, right today.

22:54First of all, he will consider you as a united. Secondly, he will say, what did you do in the last years? Did you sleep? Did you not read the newspapers? Do you sleep? We don't. We don't give gold. The paper is the same as gold. There is no difference according to the law. But according If you go to the law, if you had a bank note of $20, you could go to the issuing bank and ask for the gold.

23:43So they say you are lunatic. You didn't know what is going on. Eurodollar is one of these kinds, certain accounts are in Eurodollars, and you can transfer from one Eurodollar account to another Eurodollar account. of the World Account. But if you want to transfer from this into a world account, then say, no, this is impossible. You know, the governments have made the aid of the banks, of course, and by using the banks, have brought about a situation in which it is possible for them to increase the quantity The necessity of dollars without being under the necessity to redeem these dollars in gold.

24:56If you ask what is today dollars, then it is something which you have in the bank but which you can't get gold. If you are asking for gold, then these people may say, this is not usual, this is not fair. You must not ask the logic of the thing, because it doesn't have any logic. Suppose the governments try to conceal the fact that they have issued an enormous quantity of fictitious dollars, that they are increasing the quantity of dollars without increasing And the root of the whole story is that the governments and try to prevent you from redeeming your paper dollar into gold.

26:40The banknote said originally, and its legal formulation didn't change, if a man appears with this banknote. At the bank that had issued it, he will, without any delay, without any delay, they said, receive gold. And now you can say the problem of delay is not no longer The governments have increased the quantity and prevent the circulation of gold.

27:30When did you last get a gold piece of dollar? When did you last have an interview with a gold dollar? Do you remember it? You do not even realize this, you do not, you see, when I visited Paris in 1912 or so, I had a cheque and I went to your bank and I presented the cheque, you know, because you can't start with great quantities of money.

28:35And then these people gave me, they asked me whether I want paper or gold, and I said to give me gold. Why not? And they gave me five pieces of twenty-five gold. One of these pieces was Greek. It was not French, particularly Greek. If I had the right to say that I don't take this great piece of gold, today one would be considered as a lunatic if one were to refuse.

29:21Of course, I did not. I took it. Of course, there was no reason at all not to take it. But, as Greece was not a member of the Latin Monetary Union, you had theoretically the right in Paris to say, no, I don't take it. Was it hard to spend that Greek gold piece in Paris? Yes, of course, because the people were not so citizens, they realized very well. They did take it. but not perhaps people who were not familiar with business conditions because of it.

30:06But they wouldn't do that now. You wouldn't get any gold now. No. Now, and this, and this was, there was really good circulation. Now, when Austria stabilized its currency and went over to the gold standard, the people in Austria were not used to gold pieces and therefore they never asked for it and they They remained in the bank, you know, and in circulation, very rarely they appeared in the gold space.

30:57Why? Because they knew if they needed gold, or they didn't need practically gold if they were not in the business of jewelry or so on. If one needed gold for export in order to invest abroad, then the bank gave it at that time. And in those countries in which the gold standard had already been in practical use for many decades, People were used to get gold pieces like everything else.

31:46What you can't look around, you will not find today somebody who will tell you that he ever had an entree with the gold piece. And why is this? Because the governments have, the governments don't call, don't call inflation, what is an inflation? The increase in the quantity of people. Q. Could you explain the connection between this and balance of payments and Gresham's Law, again, the connection between balance of payments and Gresham's Law, again?

32:41Ascham's law, you see, says something which is very simple. If you have the choice to pay a debt in a lighter way, In a way which means less for you, and in a way which means more for you, you will choose the latter. And this is the reason, it is the operation of Gershom's Law, that you don't see pieces of gold, Because the gold piece has today a higher value on the market than the paper.

33:51And therefore, if you have two pieces, one of gold and one of paper, And you have now to determine whether you should use the one or the other for paying somebody. You will take the one that is of less value to you, of less power, because you can use the gold piece for payments abroad, and therefore because you can use it for payments abroad, The businessmen, the money-changer will give you a little bit more.

34:41And this is the thing, you know, is the monetary problem. The governments are increasing the quantity of money. And then they are increasing it also They knew that this was against the usages of business not so long ago. The Gresham's law is hoarding good money, driving good money out of the market. When they say, when Gresham's law is formulated in this way, that bad money drives good money out.

35:28What does this mean, bad money and good money? If you have two pieces of money, one which you can sell with a little bit more than the other, can you have can you have inflation without paper money you also can have Do you have inflation by an increase in gold mining? Yes, but the danger is not very great.

36:17This is the thing. You know, when the government, there is one class of people who never ought to complain about disordering money, tariff fares, is that the people connect with the government because they are making these things instead of saying I don't have the money, the government never admits that it has, that it ought to have money but doesn't have money.

37:05Did the Romans have paper money? No, but with the Romans this was a problem of technology. They didn't have paper, they didn't have printing, and therefore they didn't have paper money. They were very happy. How do they mix it? You see, the difference is precisely this, Before the 17th century, the method of inflation was currency debasement. It was an open swing because the government said this is a coin, a gold coin or a silver coin mostly.

38:02The silver coin is a definite weight, but they had mixed more copper into it than usual. They reduced the content of silver and increased in order to have the same size the content You wouldn't call credit cards and American express checks and inflation money because they're not legal tender?

38:50Is that the reason? They are because they are rediculous. When you go to, let us say this, you buy in advance your meals by getting a number of coupons. Every coupon you pay is for one million. This is not an increase in the quantity of money. He has sold you a meal or he has sold you something for a definite quantity.

39:39The American Express sells you American money and what you are getting when they give you is not money but a title to get a definite quantity of money. If this money deteriorates because the government increases its quantity, then of course this This what you have bought is also losing value. How about credit cards, where you buy something on credit? Then somebody gives you credit, when you go to a restaurant and you eat, now this, your Your meal is a credit because you pay only later, you don't pay for every dish they bring you to the table, you pay at the end.

40:53The problem is that the government has now taken over the production of money and uses this for inflation, for increasing. Personal credit and business credit has nothing to do with inflation at all. You are buying something, and you pay now or later, or so on.

41:42It was, in the 17th century, it was still impossible to print nicely banknotes, you know, and then with the improvement of the technology of printing, it became easier for the governments to make these things. And I do not want even to blame the governments for what they are doing. I want to blame them for the lies which the government tries to conceal what it has done. How would you explain the term the exporting of the inflation?

42:34When they speak about exporting the equation, is that the increase in the supply of money that goes outside of the country if people in Europe are hoarding or using the dollars? This does not mean, you know, going outside or inside of the country does not mean so much today as the governments are always talking about. What does this mean, you know, outside of the country? Do you know precisely when you take your closest, when you take your closest, do you know what came from inside and what came from outside of the country? You are not such a technologist that you could do this easily.

43:19Isn't the number of dollars, actual dollar bills being held by foreigners helping to keep our inflation in this country from being felt? That means... Is that exporting the inflation? That means when the various countries have different policies with regard to inflation. Some countries are inflating more, some countries are inflating less. Let us say this. England was inflating during the first world war. But compared with Germany, the inflation was very mild.

44:10Therefore, when a German, who owned some British banknotes, considered himself as very happy, As he said, he did not realize it to the same extent in which he realized the German inflation as there was also the English inflation. Well, if the United States gives foreign aid to a country in terms of dollars, the country The US dollar is hard money, because it has...

45:17Yes, it is, you know, you could, when you are living in such a country, you are misguided by the fact that the American currency loses much less and much more slowly purchasing power than their currency. Therefore, you say in Norway, for instance, one of the Latin American countries, we were every morning when we came to the breakfast room, there was inscribed the price of the dollar.

46:18It was every day, it was more domestic currency than it was the day before. But in American purchasing power, it was every day, even this was a loss as against the preceding day. These dollars that are held, let us say even by central banks in different countries as reserves, let us say if people, citizens in foreign countries, they hold dollars instead of gold, would that be a part of the euro dollars, would that be part of the euro dollar supply?

47:06This is very different, you know. These are in books and so on and controlled from various points of view by various banks and so on. What we have to realize is that the habit of Increasing the Quantity of Money became so popular that the governments do no longer have any moral or economic inhibitions, you see.

47:53They are talking and now they are telling that the budget should be in equilibrium. Of course it should be in equilibrium. But what is not said is that from a certain point of view one has to say that the budget which is not in equilibrium, is just hurting the interests of all, of a very great part of the population, not of all, because there are people, the debtors are not hurt. are Euro dollars then dollars which are held by foreign?

48:39Are Euro dollars dollars which are held by... The dollar is a book. A book, yes. Whether they are central banks or... Or not. But certain countries... You have... you have... and then you cannot even describe what is... because it changes. It changes from day to day. And what it means is, now, and this is yet now what I want to say, who profits and who loses.

49:29First of all, all those are losing who have assets in this currency, and the most important The point is this, every body in the United States under present-day conditions, who has is taking out an insurance policy, who has bought bonds, who has savings deposits, is losing day for day, and the government does not go around and tell people, do you realize Do you realize that you are losing this as against yesterday evening?

50:35When you went to sleep yesterday evening, you had a greater purchasing power than you have today? No, this is not said. And this is why inflation is so bad. If people realize or they say it's an evil, I don't want to say whether it's an evil or whether it's a benefit, I want to say what it is. It means a transfer from, let us say, from the bond holder to the man who is bound to redeem one's interest, for instance.

51:32The people who own common stock are the debtors in regard to the bonds issued by this corporation. or to the debt this corporation owes.

52:19The profit, for instance, is when you are And if you own common stock of a corporation, and this corporation has debts, as most of the corporations have, either with the bank or perhaps with bonds or something like that, The stockholder profits, but it could be, and it is very often the case, that the policy is so bad in general of the government that all of the stockholders are losing, but this is a different affair.

53:07There's nothing to do with their relation to this. How does the stockholder lose under those circumstances? When the government makes a policy which increases the burdens of the stockholder. Taxes and labor? Taxes and labor. Regulations? A mortgage is a claim. And this claim is in the country's currency. And therefore, the mortgage does not protect you. You are losing every day, continually, as against the owner of the Property. The owner of the property profits from the fact that the debts are melting.

54:18And therefore also, because people don't realize what's going on, the inflation is bad. But it works both ways. You see, take for instance the case, an extreme case, these cases of the countries where the Currency became zero. Now, what do you know about it? What can these people say? What could they do? They could not, if they have solved their claims in time, The question was, and how to invest, you know, take a simple citizen, he owns common stock, he has no slightest idea whether this corporation will profit or lose an account of the inflation and therefore, we have all these disorders, and it plays in everything it plays, for instance,

56:01one problem which people did not yet very much take into account, a considerable part of the foundations of the property and of the property of the universities and so on, consists precisely in such assets and if these assets, if these people who were responsible for the Investment. They are very cautious. Then they would have preferred, they would have said, what we should buy is the bonds of the first class corporations. The first I told you the story of this man, of this American who left $2 million for the establishment of an orphanage in Austria, a foundation. He made the foundation. His will said, I leave this to the foundation.

57:34Then these two million dollars were sent from the United States to Austria. It's an Austrian foundation. And according to the Austrian law, the property of foundations had to be invested in first-class government bonds, Austrian government bonds. And this was done, and then these bonds were zero. The two million dollars disappeared completely. You could ask, now, who profited from this? If you want to write an essay about it, then it's all right.

58:20It's not so easy to say. Who profited? Do you remember his name? No, this is not of importance for this thing. You see, the question who profited from it is The question, who were the debtors of the Austrian government bonds in which it had been In Germany, they later gave back 15% of the value of the things.

59:15That means if it had been in Germany, not 100% would have disappeared, but only 85%. And then people must realize that all our institutions and all individuals are closely are connected with the problem of the purchasing power of the monetary unit.

1:00:03If a man makes some provision for his future, for his family, for his children, for things that could happen to him, This is everything always expressed in the terms of the money. This is from you, Mr. Mises.

1:00:51Oh, that gets briefed. Now, I think I have sufficiently dealt with the problem of inflation in this regard. That inflation, when it is slight, is a slight increase, it is another thing, you know. It happened again and again, you know, that countries, this was in, let us say, for instance, of the 19th century. Several countries again and again took requests to inflation. But then they stopped it after some time and thought that there were not losses of 100% but of smaller quantities.

1:01:54You see, I don't like to criticize a very bad theory and the theory to which you refer is such a theory. It explains, it makes a difference between pre-capitalism, feudalism and capitalism. Now there's certainly, there's no doubt that there is such a difference, but it says the characteristic of pre-capitalism for us is that the goods that have followed the formula, goods were exchanged against money and money against goods.

1:02:42Goods are used to get money to buy father goods for consumption of Euro-holidates. Capitalism follows the country formula, money, goods, money. Money is used to get goods to sell for more money with profit. Now, I think, this is a famous professor whom I knew very well, who said that this doesn't have any meaning at all. It is not true that, first of all, always production, if it is not for one's own consumption, produces first goods, these goods are exchanged for money, and the money is exchanged for The money is at the beginning. Money is not at the beginning. At the beginning are the goods.

1:03:50Except when the government prints extra money, then money starts something. When the government interferes, then there's everything to that. Say's law says goods come first, Cain says money comes first. Yeah, I guess that's it.

1:04:17Would you say that the crucial distinction between pre-capitalistic times and capitalistic times Is the extent of the division of labor and specialization in trade? Yes, especially the fact that in pre-capitalistic times, people were first of all producing for their own consumption. If a man produced, he did it because it was for his and his family's consumption.

1:05:06There was no traffic, no trade in many articles. It would have been, I told you I think once or at other seminars, and, as I told, the story of a man who discovered Capitalism.

1:05:46He was an officer were in charge of the mess of the tape, of the community, kitchen of the officers of the division of the army. And he, in one day, this man told you, it was in 19th century, he told you the following story. One must, it is really unbelievable what things happen in the world.

1:06:34We used to pay in our offices, we used to pay for an egg, one heller, filler of the money. And now, looking through the books, controlling the government, I discovered that we pay it now, too, for an edge, twice the original price. And I thought, oh, somebody is taking away some money, why does this happen?

1:07:20And then, making inquiries, I discovered that while we had previously bought from the various farmers' wives in the village the eggs and paid one filler for an egg, we have now to pay two fillers. Why? Because there is a man who goes around and pays two fillers for an egg. And do you know what this man does with his eggs? He puts them into boxes and he makes these boxes into a foreign country.

1:08:16And, while in this foreign country, which is Germany in this case, while in this foreign country the eggs are more expensive, our eggs, he sends them to Germany and sells them for twice the price we have, you see. Is this not a scandal? And when people told him, don't buy something from the Germans, he said, yes, we are also buying something from the Germans, and we are paying for it, more or less.

1:09:01This man thought that it was the privilege of people living in the country, that their The eggs should be reserved for sale, not to be exported and so on. But imports, of course, who bought something cheap, made something cheaper, they are approved. This is the way in which people do it, people who are, I would say, in this regard an economist Like Wieser also misunderstood the situation.

1:09:59Wieser said that the development of capitalism, the development of trade between far distant countries, brings about a tendency toward higher prices. And he pointed out, you used to go in a very similar way in which this officer said the same. You used to go to a place in the country where everything was very cheap, and you lived there for some vacation weeks, and then you returned to your city.

1:10:45Now you discover the prices that were very low in this village into which you went to enjoy the summer. The prices are going up in this village. And you are asking, why are prices going up? And do you know what I discovered? I discovered that there are people who are selling the things which we used to buy at higher prices to other people. And do you know what these people are doing with these other things? They are sending them away to foreign countries and selling them at still higher prices.

1:11:31Is this not a scandal? without a question, and do we not buy something from other countries in which it is cheaper? He said, yes, but this is our right. The direct factor is that we did not stop in time and the government that tried to increase their spending by printing for this special purpose additional banknotes.

1:12:40As long – don't forget what I said again and again – as long as you take away from one group and give to another group, then there is a price rise in one regard and the dropping prices in the other. If the government wants to raise the salary of some group of government employees, it has to tax people and use the taxes that they are paying in order to raise the salaries of some people. Then what the one group of people is spending more, the other group must spend less.

1:13:28By and large, prices remain unchanged. But if the government adds something newly printed money for the sole purpose of raising the salaries of some people without decreasing at the same time and for the same reason the salaries of other people, then the result is that for the same quantity of consumer goods There is now a greater quantity of money in the hands of people who want to buy them. And then this greater quantity of money brings about an increase in prices, and this is the problem of inflation.

1:14:21And the government does not want to call inflation systems, the government prefers to use other terms.

1:14:37Sir, who gets this money now? What money? The new money, the defense industries? What? Who gets the new money the government is now creating? Those to whom the government pays it, you know, for instance, the government raises the salaries of some people, or the government says we need more arms. Congressman. Salaries of congressmen. Congressmen, you know, who need more arms. How can they get more arms? In paying prices high enough to move the businessmen to change from the production of peace goods for armaments.

1:15:31The space project. The space project pays high salaries. This is stupid.

1:15:45This is the system which we... The inflation of this kind does not have the same pattern of malinvestment that credit expansion... We do not discuss the problem that the government should spend more or less. We are discussing the problem that the government ought or could or should spend by increasing the quantity of money for this special purpose. We do not discuss the problem the government may say restrict the income The income of some people and raise the income of other people do no longer pay A, but pay B.

1:16:40This is something which we do not discuss. But what we are discussing is a problem whether the government should try to increase its expenditures.