The Great Inflation

City Journal (excellent publication) has a book review up about economics and inflation that sounds fascenating. The book is titled, The Great Inflation and Its Aftermath by Robert Samuelson and it covers the time between 1960 and 1980 and what inflationary control devices were used to the relative detriment of our economy as well as how "economics" is more like fiscal anthropology than any more "mechanical" science.

Dane Stangler wrote the book review and made several strong points. I particularly enjoyed his conclusion...

Samuelson concludes by pointing out that capitalism’s inherent restlessness is the source of both its prosperity and instability: “Our relentless search for some sensible balance can never reach a permanent resting place. . . . Some economic turmoil is always inevitable, and the very effort to suppress it may bring it about.” The great lesson of The Great Inflation, though, is one that Samuelson himself may not fully recognize. A highly developed market economy achieves order and avoids chaos because, for the most part, individual actions are remarkably well-coordinated. The crucial organizational tool is the price mechanism. In 1945, Friedrich Hayek observed:

The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form, but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess.
The only way to coordinate such decentralized information is through prices that constantly adjust according to innumerable individuals’ states of knowledge. When prices get distorted, the entire system can break down. The great mistake of the 1960s and 1970s was to believe the conceit that government could actually control and guide economic order. The economy, it turned out, was not a clockwork, and the result was havoc-wreaking inflation. This should be a timeless lesson for all of us, especially presidents-elect