Richard Kerschagl, Die Inflation (1973)

Kerschagl’s 1973 treatise presents inflation not as a technical accident of note issue but as a disorder of money, goods, politics, and conduct. Forms change—coin debasement, paper money, giro and credit inflation, cost inflation—but the essence is constant: claims and promises exceed real goods, services, capital, and productive capacity. The opening program rejects every attempt to make inflation without its consequences and locates the impulse in the wish to distribute what is not there.

die Inflation — besonders heute — kein rein monetäres Problem ist

English translation: inflation — especially today — is not a purely monetary problem

Part I develops the theory. Kerschagl first broadens inflation into any Überschwemmung or hypertrophy, then divides the analysis between money side and goods side. Quantity theory is useful only as a warning: money multiplied against unchanged goods raises prices, but the decisive questions are also what is produced and when it becomes available. His key distinction is between real capital formation and fiduciary credit. A power plant financed by note issue creates immediate purchasing power while output appears years later; this time-lag is inflationary. Cost inflation—wages, taxes, tariffs, social charges not covered by productivity—is the modern hidden version of the same mismatch.

Inflation’s gravest effect is the destruction of calculation. Prices, profits, wages, contracts, and balance sheets use the same names while the unit itself no longer means the same thing.

Die gesamte Ökonomie wird eine „Ökonomie des als ob“.

English translation: The entire economy becomes an "economy of as if."

This is why Kerschagl treats dosierte Inflation as especially dangerous. Its slow doses habituate the public, conceal confiscation of interest and capital, and eventually force larger doses. The state and central banks are then drawn in. The state is debtor, legislator, and beneficiary of nominalism: it can declare Krone ist Krone, repay debt in depreciated money, and annul clauses, but it cannot restore trust by decree. Central banks remain politically weak; discount policy and reserve rules cannot offset fiscal excess or wage-price bargains if employment and spending are pursued um jeden Preis.

The chapters on gold, banks, insurance, and full employment attack further illusions. Gold is tradition, symbol, and sometimes brake, but not salvation: gold prices fluctuate, Goldinflationen exist, and gold cannot prevent cost inflation or replace discipline.

Gold ist kein Heilmittel, auch nicht gegen Inflation.

English translation: Gold is no remedy, not even against inflation.

Banks suffer deposit flight, speculative stock substitutions, bad assets, and immobilization; life insurers lose the substance of long-term nominal promises. Full employment is legitimate only when grounded in real capital and correct production. Over-full employment financed by credit is pseudo-prosperity and prepares later unemployment.

Nur eine stabile Währung kann eine sinnvolle Dauerbeschäftigung gewährleisten.

English translation: Only a stable currency can guarantee meaningful lasting employment.

The psychological chapters give the book its moral force. Inflation begins with income illusion: nominal gains make people feel richer while savings and real wages shrink. Then come flight into gold, foreign currency, shares, commodities, useless inventories, and value clauses. Kerschagl is skeptical of all shelters: the state can override clauses, gold can be manipulated, Sachwerte may be illiquid or worthless, and no one can escape a general currency collapse. Inflation also rewards debtors and speculators, undermines saving, corrupts administration, and reverses social valuations. It is therefore not merely a tax but a social overturning.

Die Inflation ist die größte vorstellbare wirtschaftliche Revolution.

English translation: Inflation is the greatest economic revolution imaginable.

The final theoretical chapters argue that deflation cannot simply undo inflation: destroyed savings, altered contracts, and redistributed property cannot be restored by arithmetic. Stabilization is necessary, but never merely monetary; it requires fiscal, wage, credit, and institutional discipline. Schwundgeld is rejected as planned permanent inflation, destroying saving and accounting under the pretense of abolishing interest.

Part II supplies historical confirmation: John Law, the Assignats, Austria after both world wars, Germany, England, France, and the United States. The cases vary, but the pattern is stable: war finance, reparations, state extravagance, welfare and armament burdens, speculative credit, and political refusal of limits end in devaluation, demonetization, or painful stabilization. Written amid the early-1970s gold and cost-inflation crises, the book remains relevant as a critique of easy remedies. Its cure is neither gold, nor index clauses, nor monetary tricks, but Maßhalten: the discipline to say no before money becomes a fiction.