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There Is No Money In Monetary Policy Anymore

Article by Four Percent August 6, 2012 //   2 minute read

Jeffrey Snider, Real Clear Markets It is hard this week not to think about Milton Friedman. As those that appreciate the powerful abilities of free markets to advance the cause of humanity celebrate the 100th anniversary of his birth, it is fitting and proper to revisit his work. Friedman's greatest achievement was certainly in changing conventional wisdom about the Great Depression. His efforts, along with Anna Schwartz, formed the basis of refuting the supposed failure of free market capitalism. He rightfully saw that the blame for the catastrophe lay not with capitalism, but with government monopoly over money and the failure of what amounts to a bureaucracy to live up to its own mission. Capitalism might be messy, but centralized failure made it epic. More than anything, Friedman was an economic scholar who valued individual freedom. He saw that the only compatible economic system of arrangements that would allow full expression of that individual freedom was free market capitalism. He quite clearly described and advanced these notions in all his works, and his philosophies and theories have found wide audience. Perhaps, though, some of that wide audience might need to be pared back in that there seems to be a wide gulf between how "capitalism" is "managed" now and what Friedman thought of as truly free market capitalism. There is no denying that the strain of monetary policy that exists right now traces elements directly back to his work, but something changed in that temporal transit as it is hard to see contemporary "monetary" policy in terms of being "free to choose". Read More