Money, Bank Credit, and Economic Cycles - The Ludwig von Mises ...

410 Money, Bank Credit, and Economic Cyclesobliged to reduce their consumption, other things beingequal. 10Whether this phenomenon of forced saving, which is provokedby an injection of new money at certain points in themarket, leads to a net increase or decrease in society’s overall,voluntary saving will depend on the circumstances specific to10 Consequently in its broadest sense, “forced saving” refers to theforced expropriation to which banks and monetary authorities subjectmost of society, producing a diffuse effect, when they decide to expandcredit and money, diminishing the purchasing power of the monetaryunits individuals possess, in relation to the value these units wouldhave in the absence of such credit and monetary expansion. The fundsderived from this social plunder can either be completely squandered (iftheir recipients spend them on consumer goods and services or sinkthem into utterly mistaken investments), or they can become business orother assets, which either directly or indirectly come, de facto, under thecontrol of banks or the state. The first Spaniard to correctly analyze thisinflationary process of expropriation was the scholastic Father Juan deMariana, in his work, De monetae mutatione, published in 1609. In it hewrites:If the prince is not a lord, but an administrator of the goods ofindividuals, neither in that capacity nor in any other will hebe able to seize a part of their property, as occurs each time thecurrency is devalued, since they are given less in place of whatis worth more; and if the prince cannot impose taxes againstthe will of his vassals nor create monopolies, he will not beable to do so in this capacity either, because it is all the same,and it is all depriving the people of their goods, no matterhow well disguised by giving the coins a legal value greaterthan their actual worth, which are all deceptive, dazzling fabrications,and all lead to the same outcome. (Juan de Mariana,Tratado y discurso sobre la moneda de vellón que al presente se labraen Castilla y de algunos desórdenes y abusos [Treatise and Discourseon the Copper Currency which is now Minted in Castile andon Several Excesses and Abuses], with a preliminary study byLucas Beltrán [Madrid: Instituto de Estudios Fiscales, Ministeriode Economía y Hacienda, 1987], p. 40; italics added)A somewhat different translation from the original text in Latin has beenmore recently published in English. Juan de Mariana, S.J., A Treatise onthe Alteration of Money, translation by Patrick T. Brannan, S.J. Introductionby Alejandro A. Chafuen, Journal of Markets and Morality 5, no. 2(Fall, 2002): 523–93. The quotation is on page 544 (12 of the translation).