Inflation and Value Creation: An Economic and Philosophic Investigation

Abstract: The subject of this study is inflation, a problem that has plagued America and the world over the last several decades. Despite a rich trove of scholarly studies and a wide range of tools developed to deal with inflation, we are nowhere near a solution of this problem. We are now in the middle of the inflation that threatens to become a stagflation or even a full recession; and we have no idea what to prevent this outcome. This investigation explores the real source of inflation. Tracing the problem of inflation to production, it finds that inflation is not a phenomenon intrinsic to economy; rather, it is a result of inefficiencies and waste in our economy. The investigation leads to a conclusion that the solution of the problem of inflation is in achieving full efficiency in production. Our economic production is a result of the evolution that is propelled by the process of creation. In order to end economic inefficiencies, we should model our economic practice on the process that preceded production and has led to its emergence. In addition, the study will outline ways in which our economic theory and practice must be changed to achieve full efficiency of our production. Finally, the study provides a critical overview of the current theories of inflation and remedies that are proposed to deal with it.