Do Government Loans Cause Inflation?

Jacob H. Hollander
1918 The Annals of the American Academy of Political and Social Science  
In the cynicism born of world collapse, George Brandes has lately revived an epigram imputed to Frederick the Great: &dquoI begin by taking. Then I always find men of science to prove the justice of my claim.&dquo There is danger of scholarship becoming thus &dquoofficial&dquo in a democracy no less than in an absolutism. Public passion cracks as sharp a whip as any despot, and the applause of the market-place is as grave a menace to independent thought as the favor of the throne. In public
more » ... nce, war or peace, the treasury is always beset by two opposed forces. On the one hand, there is opportunism and practicability-opportunism in using the stress of war need to accomplish ends in doubt; practicability in meeting the fiscal strain with least trouble and dislike. On the other hand is economic theory and fiscal law-rugged and dure, straight and narrow, serving the public need with measures conceived solely with respect to fiscal principle, and hewing to this line even with struggle in making and difficulty in carrying out. Certainly no budget has ever been wholly the one thing or the other-utterly neutral in convenience nor wholly virginal in theory. Even a time-serving finance minister must occasionally relapse into science without knowing it, and the scholar enthroned in the exchequer cannot have all literally as his text-books set forth. But the varying degree of emphasis is sufficient difference. In the one case convenience is the end in view with theoretical excellence a by-product; in the other, fiscal theory holds mitigated by practical concession. The r61e of the student critic called to pass judgment upon these alternate policies is at least in one respect plain. He should insist that each policy stand firmly on its own merit, and that if non-fiscal considerations are to affect the course this should be clearly set forth. Most of all, should he resent the use of bad scientific reasoning in praise of one procedure or in blame of the other.
doi:10.1177/000271621807500111 fatcat:73efa4i34fbypphn2ax4i7biba