Infl ation was diagnosed as a pernicious outcome of war collectivism: i.e., of state interference with the “natural” laws of supply and demand. Th e wartime politicization of the economic domain was characterized as the main catalyst for infl ation, especially its consequent rise in wages and production costs, all of which hindered capital accumulation. “It is generally recognized that continued infl ation, which is primarily due to excessive Government expenditure, has a serious eff ect on production,” noted R. H. Brand (Verbatim Record, Brussels 1920, vol. 2, 17). It followed that fi scal austerity was a primary remedy for infl ation, since— in the framing of the conference experts— budget defi cits forced governments to fi nance their expenditures by issuing either more paper currency or fresh credit, thereby increasing the amount of legal tender in circulation.

Clara E. Mattei, The Capital Order, loc. 755