I'd enjoy hearing what you think. The following is an edited excerpt from Henry C. Wallich's commencement address delivered to the Fordham Graduate School of Business on June 28, 1978. At this time, you are presumably looking at your future role in the world in the broadest possible sense, including a moral sense. Today, I would like to talk to you about one aspect of your future that has a moral dimension, although it is technically an economic problem. I mean the breakdown in our standards of measuring economic values, as a consequence of inflation.
Inflation introduces an element of deceit into most of our economic dealings.
Everybody makes contracts knowing perfectly well that they will not be kept in terms of constant values. Everybody expects the value of the dollar to change over the period of a contract. But any specific allowance made for inflation in such a contract is bound to be a speculation. The most valuable part of the contract may turn out to be the paper it is written on. This condition is hard to reconcile with simple honesty.