By Ace of Spades
I was thinking about this earlier today, or last night. Before the "Economic Traitor" bomb got dropped.
During the French Revolution, the leftist (they were leftists) totalitarian government attempted to inflate away its problems by just printing up a crapton of paper money. This was a very early example of paper money. Technically, it wasn't money per se, but rather each bill represented a share of the government's eventual "profits," if you can call them that, from the sale of property they had confiscated from the Catholic Church and from aristocrats declared traitors.
One of their cute moves was to declare someone a traitor, and then, when he fled to England or Austria to escape the lynch mob, to confiscate his lands as he had "abandoned" them.
So this paper money, called assignats, actually had, or was supposed to have, a fixed value -- each of the (say) ten million "bills" printed was supposed to represent one ten millionth of the eventual "profits" from selling off confiscated land. I guess rather like a bond? I don't know.
Now even though France had these assignats, they were by no means the standard currency; the standard currency of trade was still gold and silver coins.
The leftist government -- which was busily turning the plazas red by guillotining citizens by the thousand -- soon found itself getting into, get this, cashflow problems,* so they began just printing up more assignats to pay their bills.
Now you can see the first problem here: the total sum of wealth devoted to satisfying the facial value of each assignat remained more or less constant (oh, some new estates were added to the pile as more Traitors were discovered, the biggest pile of loot was stolen from the Catholic Church in the early days; for all intents and purposes, the value of the stolen property remained constant). And yet a lot more assignats were being printed up.
And the government insisted that assignats -- now thoroughly inflated so that they had but a fraction of their Official value -- still retained their official value. As regards, importantly, the exchange rate for gold and silver.
And now we come near to my point: Breadmakers in Paris sold bread for assignats, which is a currency the urban poor had (as the government was pumping it out in their hands), but had to pay for wheat in gold.
And wheat's price in gold did not go down. (In fact, it went up, as this was a tumultuous time with lots of blood and fire.)
So breadmakers were being forced to pay in gold for wheat, and then were required to sell the bread at maximum prices in assignats set by the state.
For a loss. For a drop-dead loss.
Well, many breadmakers realized they sort of would go bankrupt if they were required to sell a week's worth of bread for, say, the equivalent of twenty silver livres and yet also had to pay farmers thirty silver livres for the wheat required to make that bread.
So what they did was to begin storing wheat, in hopes that the price of bread would one day be high enough to make a profit on. And they made less bread, seeking to only sell to those who could pay in coin.
And so what then happened is that the government declared this Illegal Hoarding and trooped off a bunch of bakers to the guillotines for their appointment with the National Razor.
The charge? Economic Treason.
We've come an awfully long way from "Dissent is the ultimate patriotism," haven't we?
A government and its sycophants branding its critics "traitors."
This should work out well. There's nothing at all here to be alarmed about, except for Everything.
The JFK Assassination & The Roots of Punitive Liberalism
John F Kennedy and Madness of the American Left
MJ Rosenberg Calls for Public Execution of Republicans and Matt Drudge
Mr & Ms Progressive, I Think That You Already Know Monsieur Petard, But Please Allow Me To Introduce You To Your Hoist