PREFACE

v

venture on a prediction of the result of this. Idiscuss below the mechanism of inflation; andthat, I suppose, is what most people are expectingif we shirk. But except at a slow rate and as thesecond stage of deterioration, this is not myimmediate expectation. There is a passage in the"Golden Bough" where the proneness of primitiveman to generalise on the basis of a very fewexperiences is amusingly illustrated. Men likedogs are only too easily "conditioned" and alwaysexpect that, when the bell rings, they will havethe same experience as last time. But the psy-chology which provoked previous price-inflationsis not present to-day. So far from there beinga natural tendency to raise prices in response toan unsatisfied demand, manufacturers and re-tailers are as reluctant to charge higher pricesexcept in response to an actual rise in cost as thepublic are to pay them. They have no desire toflout public opinion and what appears to be theintention of the authorities. They are doubtfulhow they stand under the Anti-Profiteering Act.With the Excess Profits Tax they have lessinducement than usual to maximise profits. Inshort, it eases their consciences, saves them trouble,and does not even cost them much, to clear theirshelves and leave the next customer unsatisfiedrather than raise their prices to the level whichwould equate supply and demand.

Thus the first stage, I suggest, will be a shortageof supplies rather than a runaway price level.This will be a singularly unfair, inefficient andirritating method of restricting consumption.