> CPI levels since 1800 here. [1] In the 150 years from 1800 to 1950, the CPI never shifted more than 25 points from the starting base of 51.

Yes and there were extreme swings in between. Predictable 2% inflation is better for the economy than unpredictable up and down jumps in prices of 10-20% over a decade or two.

> Keep in mind all the incredible events that 1800 to 1950 covers

You haven’t actually looked at actual charts or yearly figures have you? It was a roller coaster.

I certainly agree about your points on inequality etc. but Fiat money is not the cause of that itself. Monetary and fiscal policy failures are.

> Before 1971 the overall economic system was quite stable

Yes, for several decades. After the roller coaster of ~1770 to ~1950.

Did you look at the data? Over 150 years prices literally never once increased (relative to the baseline of 50) more or less than 50%. And outside of the Civil War and World Wars annual changes would have hardly been noticeable. In fact in the overwhelming majority of years there was no change at all! The CPI was so stable that I was even able to pinpoint a major event I had forgotten about (war of 1812) when looking at the data because it was one of the relatively rare periods of instability.

Then in 1971 things went insane and we went from a base index of 121 to 942! And yes this does directly cause inequality in a wide array of different ways! The most obvious is the 'gush up' effect as already mentioned. Another way is that it makes it much easier to undermine labor. So for instance many people would be relatively happy to be earning 25% more than they were 5 years ago. In reality? They've been given a paycut because that's not even enough to keep up with inflation, and there's 0 chance of it going any direction but up from here. So they've gotten poorer with a smile on their face. Hence why real wages are practically flat since 1971.

It also turns money itself into a somewhat toxic asset and motivates the hoarding of things. For instance Bill Gates is the largest private owner of farmland. By contrast lower income types often think starting a saving accounts, or (ugh...) a cd savings account is a fiscally responsible thing to do. And before 1971 this would have been 100% true. But now a days it's basically a scam, because you're never going to get interest rates that beat inflation, because nobody wants your rapidly devaluing money.

They'd be far better off putting their money into precious metals, land, or basically anything to try to escape the inflation trap. But lower income types often need more access to their funds on demand in case e.g. their car breaks down. So it's a system that very much punishes lower income types.

> somewhat toxic asset and motivates the hoarding of things.

As opposed to hoarding money which is both bad for the economy and made you richer for doing absolutely nothing?

e.g. prices halved between 1865 and ~1900. The rich got richer, lack of freely available capital limited growth and anyone who had loans got screwed (imagine being a farmer who mortgaged his farm and is seeing agricultural prices go down every year). Constant technological progress bailed everyone out but it wasn’t a pretty time.

My point is that consistent and mostly predictable inflation (i.e. that was the case only during a fraction of of the last ~50 years) is much preferable than constant boom and bust cycles and volatile price swings that were frequent under the gold standard.

Of course it’s very easy to mismanage monetary and fiscal policy when you can print an unlimited amount of money and put incompetent/corrupt people in charge.

Try to put yourself in my shoes for a second, and think about what I'm reading from you. The example you chose was not only the exact year the US Civil War had just ended, but also the start of the second US industrial revolution and even a peak of the transition from rural->urban life. So in other words - some very major events. And over 35 years during this wild times, prices dropped by half, all while wages for workers were raising rapidly. And debt was quite rare 'back in the day'. In 1890 about 39% of farms had a mortgage [1], and that was near a peak of the bell curve on that. Go back before the Civil War and other such events and it shrinks down to 10-20%.

For some contrast to this point, I'll pick my date of 1971. Over just 9 years prices more than doubled. If we do the same timeline of 35 years, prices increased by more than 500%. And during this time, wages didn't come even remotely close to keeping up. So people were paying more and earning less. And obviously indebtedness also skyrocketed during this era, which is indeed nice for inflation (at least if wages keep up, which again they often don't), but that's only because people could no longer afford anything! Like in modern times the median home costs 7 years of median salary, which means basically nobody, outside of the very wealthy, can afford a home without going into decades of debt. By contrast in the past there were homes available for less than a year's salary - which is rather necessary when you can't just go get endless funny money to buy something.

And you're arguing that this new system is better for workers. Now of course it's possible I'm straw-manning you, though I assure you it's not intentional if so! But if not, then what am I missing here? Because I think surely, if you put yourself in my shoes, you can see that your argument isn't the most compelling.

[1] - https://www.mba.org/docs/default-source/research---riha-repo... (page 32)