Today it occurs to me that one way of describing inflation is that it is a tax on falsehood. Most of the taxes we pay are explicitly levied in some way or another. Inflation is the implicit tax that we pay through the structure of the monetary system itself, because of the way money is issued. I don’t want to dwell on that too much as others have; see: wikipedia, Ron Paul on the right, and Tom Greco on the left.

What is interesting to me is that this “tax” is another case of the importance of truth telling. We think most often of the moral questions of individual truth telling, but this is a question of corporate truth telling. A fundamental lie is built into the structure of money itself, and that lie hurts us. It’s a tricky lie, the one that’s built into money, because it feels like a small one. In fact it’s measurably small. It’s in the single digits. It’s the 3-5% percent annual inflation rate!

Unfortunately as our society is structured it is virtually impossible for us to reverse that lie. But we can start bubbles of truth telling, bubbles that can then grow and expand… Those bubbles are all the places were we start issuing money honestly. Where we recognize that money is actually information, and as such each monetary transaction is a speech act, a telling. If it is a truthful telling, it is an acknowledgment of a wealth exchange. If that telling over or understates the wealth exchanged, then that falsehood will come back to haunt us.