From a theoretic point of view the arguments against deflation
seem unanswerable. After all, it does not really matter whether we give few or many tickets for a thing. What does matter is that we should give a known number of tickets, that these tickets should always be of equal exchange value for the same commodity, and should form a perfectly stable and trustworthy standard against which we can measure the fluctuating values of commodities. The only real harm is done when the value of the currency—the tickets—itself suddenly changes, and we seem to get all sorts of new values for commodities which have really changed only in price and not in value. We get the sort of result that would be obtained if one tried to measure off cloth with a, tape measure which was continually expanding and contracting in length. Hence the essential need in the currency problem is the need for stabilization, and any measure which necessitates a change in the value of money, even if it is in the direction of deflation, is an unmitigated evil, sure to have the most detrimental effects on trade and industry. Lord Melbourne was wont to declare that it did not matter what the Cabinet said so long as they said the same things. So, with the exchange value of money it does not much matter what it is an long as it is always the same.
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