Yes it was sort of: here is the ‘mainstream’ take on subject X, here is the Austrian take, here is why we think we are right. Sometimes attacking Keynes, sometimes the Chicago school, sometimes both at the same time.
It was a conference on the Austrian school, so no there were no Chicagoites to defend the position, but if people wanted to learn Chicago school stuff, I am sure they have their own conferences.
There is a YouTubed debate between Caplan and Boettke on Austrian economics.
Neoclassical: “Plus, the monetarist school (if that’s what you’re referring to) doesn’t “defend” the Federal Reserve; Milton Friedman wanted to abolish it. He believed, at least, replacing humans with a mechanical rule to be applied annually was a step in the right direction.”
Yes, I was referring to the monetarist school. Even if not in the form of the Federal Reserve, did Milton Friedman not defend central banking?
David Friedman: “I am not a member of the Austrian school of economics. Is there a branch of the Chicago School that does defend the Federal Reserve? My father argued that it was largely responsible for the Great Depression.”
I very much appreciate your responding, professor. Why do some people, Walter Block for one, say that your father defended the Fed? How much was he opposed to it? Did he really want to abolish it? Did he think it shouldn’t be replaced by some other form of central banking?
I wonder whether you are attempting a most clever sleight of hand by saying this. He clearly, unmistakably expressed that the Federal Reserve’s mistake was not bailing out the jewish banks, which is exactly the same position as any Keynesian.
what does ‘jewish’ have to do with it? did Milton make such statements?
Whoa! I think the term “anti-Semite” is bandied about far too much and far too unfairly, but, uhm…
Regardless, Friedmanites and Austrians both blame the Fed for creating the severity of the Great Depression, but both schools carry different charges. That’s all. As I already quoted, Milton Friedman believed there was a monetary shock due to the Fed’s rapid contraction of the money supply.
Did Milton Friedman have a theory of money? I haven’t read the Friedman-Schwartz Monetary History but of all the other things I’ve read, heard and seen on audio and video, I’ve never seen him present a theory of money. If he had one, it wasn’t as well advertised as his other points of view. I think the remarkable difference I have noticed between the writings of authors of the Chicago and Keynesian flavor* versus authors of the Austrian flavor is the way the Austrians puts their theory of money right at the head of the curriculum.
Clayton -
*I’m using the term “flavor” because I really don’t understand all the esoteric details involved in distinguishing each of these schools from one another.
WTF!
Milton Friedman and “quantity theory of money” are almost synonymous!
Clayton,
I’m not sure what exactly you’re looking for when you say theory of money, but you may be interested in Friedman’s book, A Program for Monetary Stability.
“Milton Friedman and “quantity theory of money” are almost synonymous!”
Well then that just shows how ignorant many people are.
Friedman did contribute something associated with the quantity theory - Friedman’s Plucking Model. But The Quantity Theory per se goes way back before Friedman.
Well, yeah, you can even find it in Hume.
The point is that Friedman’s research is heavily associated with the issue of money, and I’m not sure how any one can miss that fact.
Uhm what? It’s his story that the biggest bank was allowed to collapse due to being jewish owned. I’ve seen “Free To Choose”.
its a bit of a red herring isn’t it? Milton didn’t think that it would have been prudent to bail out ‘jewish’ banks ‘in particular’, rather ‘banks in general’ and these ones in this story just happened to be ‘jewish’ (whatever that means). The ‘jewish’ may explain why they were not bailed out by the authorities, but ‘jewish’ or otherwise doesn’t come into the consideration of whether Milton thought bail outs were to be done under such general conditions.
Yeah, I know of the quantity theory of money, monetary velocity and so on. But all of this still takes money as a given. Money could be fiat pieces of paper or ledger entries or computer bits or gold coins. What I don’t know of is any place where Friedman outlines something like a Mengerian account of the origin of money which I think is fairly important as well as discussion of the money production industry, in general. In most places on earth for basically all of human history, money has been one side of every transaction. Having a theory of the origins of money and an economic account of the production of money is, I think, fairly important. Did Friedman ever acknowledge that money can be privately produced?
Clayton -
nirgrahamUK, don’t make a mountain out of a grain of sand.
sorry, i was trying to help you clean up some confusion you left lying around. nevermind.
“Did Friedman ever acknowledge that money can be privately produced?”
Of course. How could anyone familiar with monetary history deny that? The U.S. had private bank money in the 19th century.
That’s like asking if he ever acknowledged that two and two are four, or that England exists.
This is part of a subset of comments in the thread that leave me wondering where in the world people get their ideas of other people’s views–and suspecting that the answer is “from sources all of which are hostile to those other people.”
As it happens, I remember pointing out to my father that a private money issuing industry would, in perfect competitive equilibrium, produce precisely the behavior of the money supply that he had argued was optimal in the book The Optimal Quantity of Money and Other Essays. He did not express surprise.
“Well, yeah, you can even find it in Hume.”
I remember my father commenting, possibly in a speech or essay, that it was easier to say what we had learned about the quantity theory in the past century than what we had learned in the past two centuries, since large parts of what we now know–and what people didn’t know earlier in the 20th century–could be found in Hume.
I remember my father commenting, possibly in a speech or essay, that it was easier to say what we had learned about the quantity theory in the past century than what we had learned in the past two centuries, since large parts of what we now know–and what people didn’t know earlier in the 20th century–could be found in Hume.
Hi Dr. Friedman!
I’m as much of a fan of Hume as just about anyone. But didn’t Hume neglect the matter of wealth effects, which was so perceptively discussed by his rough contemporary Richard Cantillon? Although, to be fair to Hume, he probably wasn’t able to read Cantillon’s posthumously published book until (if ever) after he wrote his economics work: a likelihood not recognized by Rothbard, who was critical of Hume being a “step back” from Cantillon in his history of economic thought. (Hume’s Of Money was published in 1742. His Political Discourses were published in 1752. Cantillon’s treatise wasn’t published until 1755.)
“Is there a branch of the Chicago School that does defend the Federal Reserve? My father argued that it was largely responsible for the Great Depression.”
Did he argue that they caused it by their very existence [akin to assigning a monkey to grade students’ tests, he can succeed only randomly], or by making an AVOIDABLE mistake?
If the latter, then the Chicago position may be that a well educated intelligent Fed would be a good thing. If the former, then End the Fed in any case.
Which is it?