This space is yielded today to Mr. O.W. of Bath, Indiana, who has sent us his theory of the present inflation explosion. Leading economists have dismissed Mr. O.W.’s explanation, and only, Mr. O.W. believes, because he is not an economist, but a trombone player.
“They cannot stand having a horn player make monkeys of them,” Mr. O.W. writes, “and, so, suppress my theory.” However that may be, Mr. O.W. makes sense about inflation.
“A few years ago,” he writes, “it was impossible to get a taxicab in New York City. This was because cab fares were so low that maybe 3 or 4 million New Yorkers could afford to pay them. As a result, all the cabs were constantly filled and the curbs were lined with New Yorkers who wanted cabs but couldn’t get them.
“This was an illogical situation, for the taxicab is the rich man’s transportation, and rich men were being kept from their natural mode of transport by people who should have been riding buses and subways.
“Some people got together. I don’t know who they were. Rich men, probably. The kind of men who were meant to ride taxicabs. They must have said, ‘This is silly. What is the point of being rich if we have to stand on the curb getting rained on because all the taxicabs are taken by the bus-and-subway classes?’
“Whatever they said, the result was a boost in the price of a cab ride. The fare increase again separated the taxi riders from the bus-and-subway people, and nowadays, if you are well heeled, there is no trouble getting a cab in New York.
“I go on at length about this because it is a small but classic illustration of inflation (the rise in the cab fare) being caused by the natural distaste of rich people for standing on curbs being jostled by multitudes.
“When 3 or 4 million New Yorkers could afford taxis, it meant that 3 or 4 million New Yorkers were, in a sense, rich. And the nub of the whole thing, of course, is that when everybody is rich, being rich is no longer very satisfying.
“The natural economic correction is inflation. Prices increase until only a limited number of people can pay them and, for these survivors—the rich—being rich means something once again.
“In New York in the old days the well-to-do stood on the curb in the rush hour and reflected bitterly on the uselessness of their wealth. No longer. Inflation has restored the point of the system. Being rich means being able to get a taxicab.
“When the present inflation explosion began, the entire country had reached the stage of New York before the boost in taxi fares. Half the people in America had begun living the way rich people live.
“Two and three cars. A boat. A second house at the ocean, the lake, the mountains, Porterhouse steak every night. The best Bordeaux. Fine woolens from Britain, perfume from Paris, shoes from Italy. Vacations in Jamaica. Skiing in Switzerland, flying back and forth to Europe, California, Florida, Maine.
“It was an unnatural situation. With half the population living the rich life, a lot of satisfaction went out of being rich. It was like the old days when you couldn’t get a cab in Manhattan.
“Now the hotels in Jamaica were all booked solid for the winter. You couldn’t get a lobster because 60 million other rich people had bought them all up. And what was the point of your fine woolens from Britain when the butcher was wearing a cashmere apron, or the shoes from Italy when the office boy was wearing exact duplicates?
“When being rich ceases being satisfying, the natural economic correction—inflation—naturally takes place. This is now happening. Millions of Americans are being priced out of competition for the good life. When the process is finished, being rich will mean something once again.
“Once we understand this natural tendency of inflation to occur whenever too many people start living like the rich, the solution would be easy. This would be a series of Government-sponsored lectures explaining to the multitudes that even a few years of living like the rich is better than an uninterrupted lifetime of subway riding.”