Inflationary Quality Fallacy

There is a theory that the price inflation caused by seigniorage causes the production of lower “quality” and/or less durable goods. The theory necessarily presumes that value is objective and therefore contradicts the subjective theory of value. Durability is one of many qualities that a person might value in one good over another. As such the theory is invalid.

There is no provable relation between the number of units of money required to trade for a good and the qualities of a good that one might prefer. Greater wealth (which is perception, as value is subjective), implies lower time preference, as implied by the theory of marginal utility. However ever under the assumption of a misperception of increasing wealth, lower time preference does not imply a preference for lower “quality” goods. It implies only an increasing willingness to lend a greater portion of one’s capital.

Rothbard makes this unfortunate error in “What Has Government Done to Our Money” and it continues to be perpetuated.

The quality of work will decline in an inflation for a more subtle reason: people become enamored of "get-rich-quick" schemes, seemingly within their grasp in an era of ever-rising prices, and often scorn sober effort.

It should be obvious that people always prefer to get rich sooner than later, as implied by the axiom of time preference.