Tuesday, September 29, 2009

Theodore Dalrymple on Inflation's Moral Hazard

If you haven't already heard of Theodore Dalrymple (pictured right), it's time you did. Theodore Dalrymple is the pen name of Anthony Daniels, a retired British psychiatrist and physician, who spent much of his time in practice in prisons in close contact with the "underclass," as he calls many of the people he has encountered who seem stuck at the bottom of society. Appropriately enough, he has gained fame as an essayist writing about societal dysfunction. His essays don't always necessarily make for sunny, upbeat reading (though they are always engagingly written), but they do call attention to crucial problems destroying the lives of a surprisingly large segment of the population. His diagnosis is uncomfortable for anyone accustomed to modern debates about human character that avoid questions of right and wrong and the freedom of the will, because his single-most important concern is individual moral responsibility. Society cannot function if individuals are too lazy to find out what is right and to do it. (For instance, he refutes the claim that drug addicts cannot choose to stop.)

All of this is by way of introduction to a recent (longish) essay of his which appeared in City Journal: "Inflation's Moral Hazard." In this piece Dalrymple discusses what appears to be a less criminal topic--the danger of inflation to the character of a people. After opening with an anecdotal reflection on the prevalence of inflation in the contemporary economy, he concludes:

But asset inflation—ultimately, the debasement of the currency—as the principal source of wealth corrodes the character of people. It not only undermines the traditional bourgeois virtues but makes them ridiculous and even reverses them. Prudence becomes imprudence, thrift becomes improvidence, sobriety becomes mean-spiritedness, modesty becomes lack of ambition, self-control becomes betrayal of the inner self, patience becomes lack of foresight, steadiness becomes inflexibility: all that was wisdom becomes foolishness. And circumstances force almost everyone to join in the dance.
The ultimate danger of inflation, though, lies in its tendency to discourage ordinary people from relying on their own efforts to lead a simple life, and instead encourage them to rely on the government for their livelihood. Inflation, in short, makes individual moral responsibility very difficult to achieve.

And what are the consequences of this lack of individual moral responsibility? Economists and social theorists (Dalrymple among them) may debate the exact consequences in this life, but at least for Dante the eternal consequence was quite clear: Circle 8, Bolgia 10 of Hell.

Photo credit: The Brussels Journal
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