Imagine a table. I put something–say a Chinese teacup–on one side. On the other I put a dollar bill. Now, I have five possible operations: I can add a teacup, I can add a dollar, I can add a teacup AND a dollar, I can take the dollar off the table, and I can take the teacup off the table.
The first case is deflation. I can now buy MORE with the same money. Provided everyone has money, this is a good thing. [Edit: actually, increases in productivity through innovation enable the same thing. This is how wealth is actually generated. You buy more with the same amount of money. This is a work in progress, where I am thinking out loud, and I don’t always think out loud “smartly”, but over time I calibrate]
The second case is inflation. I can now buy the same thing, but at higher cost, than I could before. This is bad.
The third case is called “growth”, so that we carry on as before, but at higher prices. Practically, this never happens in conditions of technical innovation, making scenario one slightly more relevant.
The fourth and fifth cases are related. In Communism, of course, profit is banned. Soviet Russia, for example, made selling things for any amount of money beyond what it cost to produce them illegal.
[Edit: This is perhaps where deflation goes, too, in that if there is no money to chase existing goods, the goods also disappear; this is the problem of liquidity that did so much to cause the Great Depression].
Thus, we now produce, without selling. The correllary is number five, in which we stop producing, and the table is now empty. This is, in effect, how the famines that beset substantially all Communist regimes happened.
(edit: could one call Communism “deflationary”? Money, obviously, is out of circulation. Is it the role of money to foster liquidity? Is the primary value of money over direct barter not the speed and ease of movement? I think this is getting close to the case)
This is, in my view, not a bad heuristic. Still, maybe I will improve on it tomorrow.