So the figures provided by David Friedman are books sales for the past month? Though as someone mentioned a lot of Rothbard readers are getting the books for free at Mises. But if Friedman is selling so much better than Rothbard, where did the Economist writer get the idea that Rothbard is such an influence? That way, he can paint all Austrians as nuts and their monetary theory as nutty by association without having to deal with the very sound monetary theory of Mises and Hayek and other good Austrian economists.
Which finally led him to the letter to Greg Mankiw , three months before he died, where Friedman argued:. Which is almost like a gold standard. I think my main gripe with monetarists is that they seem to think the money supply will never contract unless the Fed forces it to contract. That is clearly not the case. Credit one component of money will easily contract just before a depression because a few debtors default causing bankers get scared and quit lending or even call in some loans.
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More people get scared and start paying off loans. As a result the money supply contracts faster than the Fed can act. Or it simply stops growing.
And the Fed does not enjoy absolute control over money or prices. As Friedman wrote, the lags between policy and effect are long and variable. Greenspan said the same thing on a recent CNBC interview. He said the Fed models show a lag of 3 years. So they end up acting many months after the fact.
Add in the lags and their policies tend to become pro-cyclical. This is not the monetarist position. Rather, I think what Friedman would say is that central bank system the Fed can and should prevent this from happening.
I think of myself as an Austrian and I disagree with Milton Friedman in some important areas. It gives Austrian economics a bad name. Milton Friedman was a great champion of liberty. Blackadder, yes, Friedman would have said that the Fed should prevent a contraction of money, but at the same time he recognized that a long lag existed between Fed decisions and their impact. That means the Fed would have to see the contraction coming at least three years before it happened and it never had the forecasting tools to do it.
At one point in the midst of the Great D he succumbed to pressure and suggested that the Fed should find what he called secondary deflation, but that was all. Later he back peddled on that because of the long lags and the inflation that results from pro-cyclical policies. I agree with Milton Friedman that once the Crash had occurred, the Federal Reserve System pursued a silly deflationary policy. I am not only against inflation but I am also against deflation.
So, once again, a badly programmed monetary policy prolonged the depression. Though I am sometimes accused of having represented the deflationary cause of the business cycles as part of the curative process, I do not think that was ever what I argued. What I did believe at one time was that a deflation might be necessary to break the developing downward rigidity of all particular wages which has of course become one of the main causes of inflation.
I no longer think this is a politically possible method and we shall have to find other means to restore the flexibility of the wage structure than the present method of raising all wages excep those which must fall relatively to all others. There is no way Rothbard has a broader appeal among non-economists than Milton Friedman. Friedman did so much to expand libertarianism, while Rothbard did much to divide the libertarian movement with his fixation on purity. I suspect a lot of the vitriol the anarcho-capitalists direct towards Milton Friedman is because he is especially beloved by the Koch-funded groups, Cato Institue, Reason Foundation, etc.
Can you point to someplace where he came out against free banking? I can report pointing out to him that, at least in a simplified model, a competitive market for privately issued currency produced the equilibrium behavior of the money supply which he had argued for in his Optimal quantity of money essay. He did not disagree.
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He claimed that private fractional reserve banking could and should be banned. That meant that he wanted to constrain, by force, the terms on which individuals voluntarily dealt with each other. The figures I posted were current Amazon rankings, so evidence that the books are selling today.
What is your reason for supposing, and asserting, the contrary? I expect the ratio would be considerably higher for total copies ever sold. Email the webmaster econlib. A valid email address is required to post comments on EconLog and EconTalk. It was his debunking of the economics of John Maynard Keynes which was a major factor in leading to the free market revolutions in Britain and the United States. In this respect he was often compared to John Maynard Keynes, whose work he always respected, even though he to some extent supplanted it. Moreover, in contrast to many leading economists, Friedman maintained a continuity between his Nobel-Prize winning academic contributions and his current journalism.
The columns he contributed to Newsweek every third week between and were a model of how to use economic analysis to illuminate events. Blackadder, I have read those comments by Hayek before, but I think he differs with Friedman in a subtle way. Hayek was against the Fed reducing the money supply in a depression when prices were already falling.
And he thought the Fed should do something about what he called a secondary deflation.
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However, he never thought that monetary expansion could end a depression as Friedman did. However, he was also skeptical that the Fed could do what he thought it should do because of the long lags. Friedman saw that problem as well. The Amazon sales rankings are entirely misleading. If you want to read Rothbard you go to Mises. Is it just my imagination, or are a substantial amount of free Market economists arguing for an Objective valuation model for Friedman vs. Lord September 19, at AM. Ryan September 19, at PM. Lord September 19, at PM. Ryan September 20, at AM.
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