The Friedmanite Corruption of Capitalism

Milton-Friedman

There is quite a lot of debate about Milton Friedman and his “libertarianess.” I think it was clear that in general he definitely was a libertarian. But though he was absolutely a champion of liberty on many levels, on perhaps the most important level, the nature and purpose of money, he was not.

Growing the money supply at a steady rate year over year via a central bank command and control system is wrong. That those concerned about the economy need only be concerned with the supply of money, not with the root of its money, is wrong. Having faith in a central bank to act independently was wrong. Finally, his encouraging of a truly fiat system of money in the 1970s was absolutely destructive. The debt this fiat system encourages is one of the key reasons for the economic difficulties we see now.

Via a review of David Stockman’s The Great Deformation, the economist, Tom DiLorenzo, examines Friedman’s blindness to the realities of central bank command and control.

(From Mises.org)

“Friedman never even entertained the possibility that once the central bank was freed from the stern discipline of protecting its gold reserves, it would fall into the hands of monetary activists and central planners” and that the Fed would “become a fount of rationalizations for incessant tinkering and intervention in financial markets.” Printing dollars with reckless abandon, the Fed fueled commodity booms in the 1970s, followed by busts and crashes, and then did the same with stock and real estate markets in the succeeding decades.

Click here for the article.

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