The resulting fall in purchasing power, it is said, was a necessary condition of economic progress. The intensification of the division of labor and the continuous growth of capital accumulation, which have centupled the productivity of labor, could ensue only in a world of progressive price rises. In spite of all warnings on the part of economists it is still today the core of the layman's economic philosophy. It is no less the essence of the teachings of Lord Keynes and his disciples in both hemispheres. The popularity of inflationism is in great part due to deep-rooted hatred of creditors.
Inflation is considered just because it favors debtors at the expense of creditors.
However, the inflationist view of history which we have to deal with in this section is only loosely related to this anticreditor argument. It is obvious that the problems raised by the inflationist doctrine cannot be solved by a recourse to the teachings of historical experience. It is beyond doubt that the history or prices shows, by and large, a continuous, although sometimes for short periods interrupted, upward trend. It is of course impossible to establish this fact otherwise than by historical understanding. Catallactic precision cannot be applied to historical problems.