Is Inflation Immoral?

Book review part 2 of Idols for Destruction: The Conflict of Christian faith and American Culture by Herbert Scholssberg In Part 1, I discussed how Scholssberg predicted the Occupy Wall Street movement’s 99 percent. I have described this book saying:

What I enjoyed so much about this book is not that I agreed with every argument Schlossberg makes, but that from page to page I would swing from whole-hearted concurrence to rabid disagreement. Schlossberg made me think, and re-think, and continue to think about issues that I had previously taken for granted. And that is the sign of a great book.

Here in Part 2, let’s look at an example of agreement and disagreement from one page to the next on the issue of inflation. Scholssberg says:

Every debt that appears as a liability on one person’s balance sheet appears as an asset on another’s. The inflationary act that wipes out one’s debt, at the same time destroys another’s wealth. In this way it transfers wealth from one to another. Inflation is a process of redistribution.

Inflation has long been one of those policy issues that I happily through my hands up in the air and say, “I don’t know. I’m not the expert.” So I found Scholssberg’s discussion very interesting. His ability to put the issue in terms of balance sheets made it much more relatable, and his argument for how government-influenced inflation is an act of wealth redistribution made me indignant. And then I turned the page.

The modern alchemist… tries to create value ex nihilo and imitate the creative power of God… Just as idolatries of mammon imitate the creation of value out of nothing by policies of inflation, so they imitate the redemptive process with redistributive schemes.

As a believer in the free market, I have a Pavlovian reaction to cringe every time I read “redistributive schemes.” But, we like the creation of value. That’s one of the Biblical tenants supporting the moral justification of free market. Being made in the image of God, we as humans have the innate desire to create and make value in the same, though more limited, way that God created the universe and made it good. This is why we value art; why we prize entrepreneurship. So if inflation is the distribution of wealth, then it is theft and it mistakes equality of outcomes for equality of opportunity. But if it is the creation of value, then it is a by-product of the creative nature of the free market. Can it be both? Is it one or the other? I don’t know, I’m not the expert. But this an issue worth continuing to explore. What do you think? Is inflation moral or immoral?