Friedman simple quantity-of-money rule policy didn't withstood the test of time.
His idea that flexible exchange rates make inflation purely domestic issue is the cornerstone of economics. No good economist today believes that unemployment and deflation should be preferred for currency devaluation thanks to Friedman.
Friedman spend his life trying to prove that there had never been in history a monetary supply growth without being followed by inflation. What he didn't try to prove was that monetary supply growth always is followed by inflation.
But I think 10 years ago there were definitely mainstream people who at least claimed to believe the "inflation is always a monetary phenomenon". Still, it sounds like you are more up to date on this than I am so I appreciate the clarification.
This is correct even today. Among politicians and pundits there is completely different economic discussion and it's really confusing.
You know, if you would give top 1000 dry academics in any field a way to flag news media or opinion pieces in their specialty with visible [extraordinary or surprising claim] -flag if they do it with 4/5 majority it would be really helpful public service (startup someone?)
Probably. It's strange how the only school of economic thought that actually corresponds to reality is the one shunned as "pseudoscience" or something.
Go see for yourselves: http://mises.org
>I think the Austrian business-cycle theory has done the world a great deal of harm. If you go back to the 1930s, which is a key point, here you had the Austrians sitting in London, Hayek and Lionel Robbins, and saying you just have to let the bottom drop out of the world. You’ve just got to let it cure itself. You can’t do anything about it. You will only make it worse. You have Rothbard saying it was a great mistake not to let the whole banking system collapse. I think by encouraging that kind of do-nothing policy both in Britain and in the United States, they did harm.
Can you come up with an argument against Austrian Economics in your own words, or are you content trying to discredit it with an appeal to Milton's authority?
I could argue against the quoted passage but I don't want to bother doing any more work than you have.
I'll throw you a bone: Deflationary policy is idiocy. Belief that monetary policy can be neither inflationary nor deflationary is anti-empirical and wishful thinking.
And yet, somehow I still think you're not even trolling!
But if not.. Once again, I have to wonder what the hell is wrong with you people.
By the way, that wasn't an appeal to authority. It was a link to a website where you can educate yourself, without having to take my word for anything.
As for monetary policy, it shouldn't even be a thing.
Don't worry, I've spent plenty of time educating myself. Grad school was pretty good for that. It even says Economics on my diploma, heyyy.
I'm not sure what you mean by "monetary policy shouldn't even be a thing." That's like saying, "guns shouldn't even be a thing."
For starters, if you understand that value is subjective, you'll also understand that there's no way to put a number on how much you want something, or precisely how much you'd be willing to pay for it, etc.
You'll also understand that you can't base calculations on something you can't actually quantify, and have no way of accurately measuring..
So yeah, you'll understand that most of what you've been taught is just garbage-in-garbage-out.
As for monetary policy, it's essentially just "a plan for forcefully intervening in an economy", and it doesn't actually happen for the greater good - it's done to benefit the government and their buddies.
As a prime example, who gets access to newly printed thin-air-money at zero interest? Do you want him to buy real assets with "free money", and have you suffer the consequences (of the resulting decrease in your currency's purchasing power)?
Counter-example: I do it all the time. Ever heard of "revealed preference"? Sure there are weird human things like preferring A to B, B to C, and C to A, but I'm OK with a map not being the territory.
> a plan for forcefully intervening in an economy
All government choices are forceful interventions, whether a choice to act or not act.
> Counter-example: I do it all the time.
No you don't. I mean, sure you can pull numbers out of your ass and pretend to calculate something based on them.
Or you can even explicitly set out to calculate garbage results with garbage inputs, if you insist.
But you're not putting accurate numbers on how much anyone wants anything, because it's all subjective.
> All government choices are forceful interventions, whether a choice to act or not act.
Indeed. That's how ruling over subjects works. I can't parse the latter part though, but whatever.
If that's pulling something out of my ass, well, I guess you're not a fan of statistics or the scientific method? Oh, actually, I forgot that's a central tenet of the Austrian School -- science is bogus when contradicted by philosophy.
> can't parse the latter part
If a government creates money, then it must have a monetary policy. Do you think government-backed money is not "for the greater good"?
Do you think 2% is a good rate for you to be losing your savings' purchasing power? How fast would you like gangrene to spread through your body?
"Inflation is always and everywhere a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output. … A steady rate of monetary growth at a moderate level can provide a framework under which a country can have little inflation and much growth. It will not produce perfect stability; it will not produce heaven on earth; but it can make an important contribution to a stable economic society."
That's not so say that many don't hold the belief you have (i.e. that inflation should be understood primarily as price inflation, and monetary inflation is a secondary consideration). But it's not the only mainstream opinion.