Between 1792 and 1912, the United States saw inflation at an average rate of 0%

[jimmy olsen]

Ron Paul was right!

http://www.in2013dollars.com/1792-dollars-in-1912?amount=1000

[MadImmortalMan]

What was he right about?

[Martinus]

How is this news? This is one of the central observations of Picketty's best seller book that has been on the market for two years.

Of course, stagflation is horrible for pretty much everybody but a handful of capital owners. You are not saying this proves that the US economy was in a good shape during that period, are you, Tim?

[Tamas]

Oh yes, no wonder there was no growth and prosperity in the States during that time!

[Eddie Teach]

How is this news? This is one of the central observations of Picketty's best seller book that has been on the market for two years.

I think you may overestimate that book's prominence on account of having read it yourself. 

[Admiral Yi]

How is this news? This is one of the central observations of Picketty's best seller book that has been on the market for two years.

Of course, stagflation is horrible for pretty much everybody but a handful of capital owners. You are not saying this proves that the US economy was in a good shape during that period, are you, Tim?

One of Picketty's central observations was that the inflation rate in the US from 1792 to 1910 was 0%?  That's a strange observation to be including in a book about the relationship between return on capital and GDP growth.

I get the impression you don't know what stagflation is.  It is unemployment combined with inflation.

[Martinus]

Oh yes, no wonder there was no growth and prosperity in the States during that time!

Who said anything about there being no growth? Although at least during the first half of the period, it was rather patchy at best:



Now, prosperity is much more doubtful, especially when understood in the terms of welfare of the general populace - and that's even when you ignore the fact that a part of the populace was enslaved for most of the period.

God, I love "Austrian school" idiots.

[Tamas]

Picketty, right or wrong, is the big idol of the European left because he gives -at the very least- an excuse of thinking that the radical left was actually right, and the socialist experience failed not because it is inherently wrong, but because it was not done right.

[Tamas]

Now, prosperity is much more doubtful, especially when understood in the terms of welfare of the general populace - and that's even when you ignore the fact that a part of the populace was enslaved for most of the period.

Yeah. The whole American economy worked out very wrong for the general populace. If only they embraced socialism, they could be reaching Russia's, or even Europe's heights by now.

[Monoriu]

I don't understand.  Between 1792 and 1912, the US inflation rate is 0%.  So what?  I am quite sure the US economy in 1912 is much better compared with 1792.  What is the point?

[MadImmortalMan]

I don't understand.  Between 1792 and 1912, the US inflation rate is 0%.  So what?  I am quite sure the US economy in 1912 is much better compared with 1792.  What is the point?

Gold standard was awesome and Federal Reserve sucks I guess.

[Richard Hakluyt]

Notice the wild swings in inflation/deflation given in Ti'm's link. There was a deflationary trend in the 19th century interrupted by gold rushes that increased the money supply. Without the gold rushes there would have been stagnation.


(There is a typo  for "Tim's" above, but it seems somehow appropriate so i will leave it in)

[Monoriu]

I don't understand.  Between 1792 and 1912, the US inflation rate is 0%.  So what?  I am quite sure the US economy in 1912 is much better compared with 1792.  What is the point?

Gold standard was awesome and Federal Reserve sucks I guess.

Wait a minute.  I am no economist but I think the gold standard has pretty much been discredited after the Great Depression, no?  Since the supply of gold is limited by physical availability, mining capacity etc, it seems unreasonable to constrain the supply of money by availability of gold.  I mean, everybody sees the problems with an over-supply of money, but artificially linking the supply of money with the supply of gold doesn't seem a good solution. 

Is somebody really suggesting that it is a good idea for the US to go back to the gold standard? 

[Admiral Yi]

Who said anything about there being no growth?

You did.

[Martinus]

Now, prosperity is much more doubtful, especially when understood in the terms of welfare of the general populace - and that's even when you ignore the fact that a part of the populace was enslaved for most of the period.

Yeah. The whole American economy worked out very wrong for the general populace. If only they embraced socialism, they could be reaching Russia's, or even Europe's heights by now.

Given that the US economy suffered through the worst crisis just 10 years after the end of the period we are talking about, I would say it did not work out that well for the general populace. And what propped it up back again - and kickstarted America's immense growth (which happened in the 20th, not the 19th century) - were FDR's reforms, which would be considered extremely socialist by today's standards (including a 75% income tax rate on the top earners).