Ron Paul on Milton Friedman

[dmspilot00]

Freidman is grossly overrated...He defends the existence of the Fed and I believe he's against Gold Standard...

Friedman was just a half way point between Keynes and Von Mise...

.much better than the former....but not nearly as correct as the latter

I disagree. Friedman desired to abolish the Federal Reserve, and was the most vocal proponent of freedom, free markets, and limited government in the 20th century. I think he was also the first person to prove the Federal Reserve caused the Great Depression.

The Chicago school, like the Keynesians, use the flawed "perfect competition model" rather than a "market process" approach like we Austrians.

When at the first meeting of the Mt. Pelerin Society, Mises challenged the presence of Friedman calling him the socialist he was (by nature of using the wrong premise--the model of false empiricism), but Hayek let him stay out of personal friendship.

Friedman used to be a high-tax socialist and Keynesian, but completely reversed his position in the 50s and 60s.

The Chicago School is more similar to the Austrian school than it is to Keynesian. Both Chicago and Austrian schools call for free markets and limited government intervention.

 

[aksmith]

I often deride the people on these boards for not being very politically smart. Some of them anger the very people we are trying to attract. But every now and then, we see a discussion of economic theory and it warms my heart.

I have heard Milton Friedman call for an end to the fed, and say the gold standard (not a fixed standard or bimetalism) would have been preferable to what we have currently. But he always fell back on fiat currency and a central bank in the end. His instincts were good, but his brain did not usually cooperate.

In fact, if they were alive today, I think we'd see both Friedman and von Mises joining Jews 4 Ron Paul.

 

[max]

I disagree. Friedman desired to abolish the Federal Reserve, and was the most vocal proponent of freedom, free markets, and limited government in the 20th century. I think he was also the first person to prove the Federal Reserve caused the Great Depression.


Friedman used to be a high-tax socialist and Keynesian, but completely reversed his position in the 50s and 60s.

The Chicago School is more similar to the Austrian school than it is to Keynesian. Both Chicago and Austrian schools call for free markets and limited government intervention.

Friedmans critiques of the Fed are based on the mistakes it makes...but not on its very EXISTENCE

I dont recall him ever suggesting we'd be better off with the Fed and its debt based fiat money....but..it's been a while since I read that stuff

 

[user]

I disagree. Friedman desired to abolish the Federal Reserve, and was the most vocal proponent of freedom, free markets, and limited government in the 20th century.

He may have been listened to more, but that doesn't mean he was the most vocal. Ludwig von Mises faced much worse odds.

I think he was also the first person to prove the Federal Reserve caused the Great Depression.

His conclusion was that the government should have intervened more, not less.

Friedman used to be a high-tax socialist and Keynesian, but completely reversed his position in the 50s and 60s.

The Chicago School is more similar to the Austrian school than it is to Keynesian. Both Chicago and Austrian schools call for free markets and limited government intervention.

A market with a central bank and fiat currency is not free.

 

[reaver]

Today marks a year after the death of one of the greatest economists our world has known.

Milton Friedman's book "Free to Choose" is how I got to understand the benefits of less government intervention and ultimately how I became a Ron Paul supporter. I believe this is also the same Nobel prize winning economist who Ron Paul studied back in the 70s that got him involved in politics in the first place. Today marks a year after his death. I'm not much for giving tributes to anyone but if any economist would deserve recognition for shaping the thinking in the world we live it would be Milton Friedman.

http://www.lewrockwell.com/paul/paul352.html

Thanks for making Christmas shopping a little easier. My brother gets this and my father gets "foreign policy of freedom".

 

[Bradley in DC]

I disagree. Friedman desired to abolish the Federal Reserve, and was the most vocal proponent of freedom, free markets, and limited government in the 20th century. I think he was also the first person to prove the Federal Reserve caused the Great Depression.


Friedman used to be a high-tax socialist and Keynesian, but completely reversed his position in the 50s and 60s.

The Chicago School is more similar to the Austrian school than it is to Keynesian. Both Chicago and Austrian schools call for free markets and limited government intervention.

Friedman was against the Fed, yes, but the monetarists use the same emphiricist model as the Keynesians. The ends don't justify the means here.

Ludwig von Mises and F. A. Hayek far greater proponents of freedom, free markets and limited government. There is a reason Hayek was named man of the century and used to personify liberty and capitialism in The Commanding Heights versus Keynes, et al.

 

[therealjjj77]

Friedman was fairly effective, though, in communicating the importance of keeping things in the private sector. He just hadn't gone far enough with his thought on also keeping the monetary system in the private sector, too. However, he certainly was very successful in mainstreaming the superiority of the private sector over the public sector.

Planting the seed is what leads to people having original thought processes on the economy. The main idea was that free market is always better than centralized control. When you then take that and apply it to different sectors in our society(monetary, education, healthcare, social security, etc.) you then will come to the right conclusions on what place the government should have in our society for us to be the most free and prosperous.

 

[KewlRonduderules]

I thought Milton Friedman in theory did not believe in the Federal Reserve? What am I missing here?

Here is some good information about the various positions on the FED:

http://www.reason.com/news/show/38384.html

 

[Paulitician]

Here's a good interview about honest money in 1995. Ron Paul talks about his disagreement with monetarists, Milton Friedman specifically, in one of them (3rd @ 7:35)

http://www.youtube.com/watch?v=IF5pwDCpz4s
http://www.youtube.com/watch?v=Q-M8En38oFQ
http://www.youtube.com/watch?v=IH6iEbP9ozw
http://www.youtube.com/watch?v=ojtxgCYeagE

 

[tsetsefly]

What sets the Chicago school of thought apart from the Austrian one? The Chicago school favors fiat money and a central bank, correct? What other differences do they have?

COrrect me if I am wrong but I am under the impresion that Friedman changed his opinion on fiat money and was a backer of the gold standard, he was a bit more pragmatic than the austrian school of thought, but still a great contributor to freedom...

 

[DJ RP]

I don't know as much about this as a lot of you guys but from the videos on youtube Friedman speaks a LOT of sense and definitely did a lot to destroy the myth of capitalism as evil and promote the idea of free markets. I think on balance he's a cool dude, plus he's a great speaker and debater, which is important in popularising ideas.

 

[chrismatthews]

The Chicago school, like the Keynesians, use the flawed "perfect competition model" rather than a "market process" approach like we Austrians.

When at the first meeting of the Mt. Pelerin Society, Mises challenged the presence of Friedman calling him the socialist he was (by nature of using the wrong premise--the model of false empiricism), but Hayek let him stay out of personal friendship.

Friedman also believed in utility theory, and the use of cardinal numbers rather than explicit ordinal numbers when constructing actor theory.

 

[Brinck Slattery]

Freidman's wrote the definitive study on the US money supply, "A Monetary History of the United States", which revived interest in the influence of monetary policy, which was considered somewhat arcane and solved by the Keynesians. Anyone who thinks he is overrated or, god forbid, an enemy of freedom needs to take a look at the big picture.

 

[DrNoZone]

Milton was a great friend of liberty. But he was more successful in theory than in practice. His book Free To Choose also had a great influence on my thought at the time, but I wish he hadn't strayed from freedom as often as he did. Reverse income taxes and monetarism were band aids on a fatal wound. If he were less smart, and therefore had figured out that nobody is smart enough to manage a fiat currency system, his legacy would have been even brighter. But he was a great loss nonetheless.

Actually, if he were smarter and was of the Austrian School of economics, he would have been thoroughly ignored and died an almost unknown.

 

[chrismatthews]

Make no bones about it, despite the economic purists in here(I count myself as one) Friedman was no slouch. He varied(wrongly in my opinion) in some important ways from the Austrian school. You can self observe the differences by looking at the products of the Chicago schools scholarly endeavours in this century.

They primarily consist of how Rothbard or Mises "got it wrong"

The fundamental issue with Austrian economics is two fold. It was once controversial, but so much of it has been proven correct over time that the more conventional economic schools have incorporated what they could without breaking their own theories, meanwhile, the Austrian school has not been expanded in a meaningful way in 15 years.

The second issue is the completeness of the theory. There are thousands of professional governmentally funded and academically funded economist that have to get some theories "on the books" This creates a great pressure to branch out significantly from Austrian theory or else concede their inability to do so.


If you want to see an example of this effort, google axiomatic theory of economics, you'll find a very smart challenge of austrian economic theory, followed by a rebuttal from Robert Murphy, followed by a rejoinder by Victor Aguilar. I point this out to state the obvious, economics is a social science, and it often contains far too many variables and far too few constants to commandingly demonstrate the superiority of a given school of thought.

If you're Austrian school, you rely on the economic theory as a proof, if you challenge the Austrian school, you do so with statistics, statistics being interperative and subject to the same manipulation as polling data.

For this reason, hacks like Krugman can make a living as an "economist", while being ridiculed by the mass of economists that bothered to do their homework. It is very difficult to utterly demolish a given theory because the sea of variables always allows for a bunch of wiggle room.

To most studied economists Keynes is long dead, but to a democratic partisan economist, he is simply misunderstood. To an ancap partisan Rothbard is the last person to extend Austrian economics, to a neocon he's a radical.

The confluence of politics, liberty, and social policy within economics makes it a very interesting, and very difficult science to master.

 

[chrismatthews]

hmm, the example i gave on axiomatic theory isn't Chicago school at all, my mistake.

 

[runderwo]

Friedman was very pro-liberty on a lot of things: http://www.druglibrary.org/special/friedman/milton_friedman.htm

 

[Malakai0]

You can have a fair and workable fiat money system, check out the documentary the moneymasters (on google video for free btw), the maker advocated a debt free public fiat currency. Same as a gold standard in effect, a little better actually. Much harder to obtain though IMO.

You just need to abolish fractional reserve banking and keep the currency controlled by government, transparently, and under strict rules of when more can be printed. You would need complete transparency, a relatively educated public (on economics), and trusted people running the presses.

The gold and silver standard is just easier and leaves less room for abuse. A pure gold standard can be abused by the banking cartel (to use RP's words) if they acquire most of the gold, which they probably do already.. But fiat currencies have worked well, as long as the bankers are kept out of it. It must be debt-free.

 

[user]

You can have a fair and workable fiat money system, check out the documentary the moneymasters (on google video for free btw), the maker advocated a debt free public fiat currency. Same as a gold standard in effect, a little better actually. Much harder to obtain though IMO.

You just need to abolish fractional reserve banking and keep the currency controlled by government, transparently, and under strict rules of when more can be printed. You would need complete transparency, a relatively educated public (on economics), and trusted people running the presses.

The gold and silver standard is just easier and leaves less room for abuse. A pure gold standard can be abused by the banking cartel (to use RP's words) if they acquire most of the gold, which they probably do already.. But fiat currencies have worked well, as long as the bankers are kept out of it. It must be debt-free.

This is why free banking beats both fiat money and the gold standard.

 

[runderwo]

You can have a fair and workable fiat money system... But fiat currencies have worked well, as long as the bankers are kept out of it. It must be debt-free.

Do you have an example of one that has worked (and continues to work without special interests hijacking it)?