Friedman, who said he favored economic liberty for pragmatic rather than principled reasons, also came under criticism from libertarians who believed that while markets indeed are the best way to produce wealth, a principled defense of the individual liberty was necessary as well. Hayek, who opposed a government central bank and maintained that currency should be tied to commodities like gold, which were less susceptible to political manipulation. His insights gained currency in the 1970s as government attempts to deal with both unemployment and rising prices through Keynesian methods produced the worst of all worlds, "stagflation," that is, high unemployment and high prices.įriedman was challenged by other free-market economists, especially those of the Austrian school associated with Ludwig von Mises and F.A. Friedman believed in keeping a stable money supply and avoiding inflation. This approach challenged the Keynesian theory that promoted the efficacy of manipulating the money supply to bring about positive economic result. Friedman was best known in economics for his theory of monetarism. Friedman was the brightest light in the Chicago school of economics, which also included Nobel Laureate George Stigler.
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