One of the most reckless and cruel acts of government is the destruction of a currency.
During the hyperinflation of Germany's Weimar Republic, the number of marks in circulation went from 29 billion in 1918 to 497 quintillion in 1923. Workers were paid twice a day and given breaks to spend their money, carted in wheelbarrows, before it became worthless. Most Germans lost their life savings, leaving many prepared to blame others for their impoverishment. The Nazis blamed the Jews.
This kind of hyperinflation is rare in history, but we are seeing it once again, in Zimbabwe. Government officials claim an inflation rate of 66,212 percent (most months they refuse to release inflation figures at all). The International Monetary Fund believes the rate is closer to 150,000 percent -- about the level reached by Weimar Germany. By some estimates, about 50 percent of Zimbabwe's government revenue comes from the printing of money. At independence in 1980, the Zimbabwean dollar was worth more than one U.S. dollar. Recently, the state-controlled newspaper raised its cover price to 3 million Zimbabwean dollars. Two pounds of chicken were recently reported to cost about 15 million Zimbabwean dollars.
A Zimbabwean friend who runs a business recently told me, "If you don't get a bill collected in 48 hours, it isn't worth collecting, because it is worthless. Whenever we get money, we must immediately spend it, just go and buy what we can. Our pension was destroyed ages ago. None of us have any savings left." Zimbabwean nationals who work on the U.S. Embassy staff in Harare have seen all their retirement funds wiped out. American government officials in the country carry boxes of money to pay at restaurants and must begin counting out currency at the beginning of the meal to finish by its end.
The government of Robert Mugabe has responded with the normal economic policy of tyrants: price controls. And these have naturally emptied the shelves in grocery stores and caused shortages of most basic goods. My friend's wife travels to Botswana to buy flour and sugar.
Mugabe manages to pay off his military leaders and political cronies with hard currency that comes from mining gold and platinum. He also sells farmland to Chinese and Libyan speculators -- land expropriated from white farmers, supposedly in the cause of Zimbabwean nationalism. Mugabe is literally putting his country on the block to maintain his power.
So why don't the impoverished people of Zimbabwe revolt? "The tragedy is that nobody is in the streets," says my Zimbabwean friend. "People are dying silently."