What did I mean here when I said that Milton Friedman was on the same side of the divide as Keynes, and the other side from people like Ron Paul? I meant that Friedman-type monetarism was technocratic, not moralistic; he advocated a constant growth rate of the money supply on the basis that it works better than activist policy, not on the grounds that printing money is confiscation.
In fact, Friedman was in favor of printing money. He wanted to stabilize broad monetary aggregates like M2, not the monetary base (which is the stuff the Fed actually prints). His criticism of the Fed during the Depression was that it didn’t do enough to prevent a fall in M2 — that is, that it didn’t print enough money. He was all for devaluation as a way to get prices and wages in line. And he pretty clearly favored quantitative easing.
It says something about the times we’re in that Milton Friedman now looks left-of-center, at least on monetary issues.
15 January 2011
Friedman monetarni socijalista
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