Killing the Goose That Lays the Golden Egg

Michael MacDonald and Darel E. Paul

Politics & Society, 2011, vol. 39, issue 4, 565-588

Abstract: It’s a commonplace that Federal Reserve chairman Ben Bernanke draws his policies from Milton Friedman and Anna Schwartz’s A Monetary History of the United States ( MH ). With that in mind, this article establishes five points. First, contrary to conventional wisdom, Friedman and Schwartz merely insinuate their claim the Fed caused the Depression in MH . Second, their criticisms of Fed policy during the Depression, which turn on its refusal to adopt open market purchases (OMPs), repudiate Friedman’s famed libertarianism and market fundamentalism. Third, Friedman and Schwartz don’t refute the practical objections of bankers who opposed OMPs in the 1930s. Consequently, Bernanke’s policies for addressing the financial crisis risk doing precisely what Friedman’s targets warned against—encouraging financial speculation without addressing problems of unemployment. Fourth, Friedman and Schwartz’s prescriptions entail a neoliberal, not a libertarian, state, one governed by technocrats and answerable to financial markets. Finally, what accounts for and unifies Friedman’s contradictions is the beneficiary—finance.

Keywords: Milton Friedman; Depression; neoliberalism; finance capital; financial crisis (search for similar items in EconPapers)
Date: 2011
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0032329211420045 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sae:polsoc:v:39:y:2011:i:4:p:565-588

DOI: 10.1177/0032329211420045

Access Statistics for this article

More articles in Politics & Society
Bibliographic data for series maintained by SAGE Publications ().