It was essential that policy makers not cave to popu­lar demands. A case in point was the demand for stabilization of commodity prices in the wake of the stock market crash. In 1931 Haberler wrote against the idea of stabilizing the price level for certain commodities. He acknowledged that ­under a scheme of stabilized prices “social friction is less, since the worker can then be offered rising wages and a larger share—at the expense of rentiers—in the social product,” but the outcome would be inflation. He said that he would personally rather risk the “increase of social friction” than risk inflation. ­Here he followed his mentor Mises, who complained that governments had been captive to “public opinion, which looks for salvation in low rates of interest and rising prices.” ­Because the business world desired cheap credit, governments encouraged banks to print money, but short-­term profits “in the long run must inevitably create a situation of crisis and depression.” Public pressure must be resisted by the banks, schooled by economists on the consequences of their actions. Only then could international trade based on a reliable currency standard be preserved.

Quinn Slobodian, Globalists, loc. 187