Monday, April 8th, 1974.

Compounding the alarm—and further weakening faith in governments —is the uncomfortable feeling that no one quite knows what to do about inflation. The experts themselves are not immune from this despair. In the U.S., John Dunlop, head of the Cost of Living Council, asserts: "I don't believe it is clear that mankind today knows how to control inflation."

That fear is not without justification: the present world inflation is unlike any before it. Ever since the ancient Lydians invented metal money, inflation has been a painful but largely localized malady. Runaway price boosts might wipe out savings, pauperize individuals, bring down governments —but usually in only one or a few countries at any specific time, and for what seemed fairly clear reasons. In the industrialized world, the worst inflations generally accompanied wars or revolutions, or struck countries that had tried to live beyond their means. Inflation might be endemic in some nations of Latin America and Asia, but the rich countries could smugly dismiss that as the consequence of chronically weak or corrupt governments.