S6:E23 Milton Friedman vs. John Maynard Keynes
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Is Laissez-faire really fair?
Milton Friedman may be the most famous American economist. His research and theories have profoundly shaped the modern American economy. But few of us can clearly articulate what he taught and what it means for our times. Friedman’s career was defined by the aftermath of the Great Depression. He worked in the government administering the New Deal, but never really agreed with it. He joined the faculty at the University of Chicago and built a department around him that taught a version of free-market economics known as monetarism. Essentially, monetarism is the idea that inflation is a product of how much money is in circulation. Friedman did not like the Federal Reserve or the gold standard, instead, advocating for a standard 4% increase in the money supply every year that would not be shifted. By setting a rule, he hoped to do away with an entire governmental department.
Milton Friedman: The Last Conservative
Friedman and his co-authors ventured into areas that other economists thought, perhaps, unwise. They used economics to explain things like marriage and school choice. He was also a proponent of school vouchers.
Stanford professor Jennifer Burns joins Chris today to explore the many facets of Milton Friedman. This is the first of two parts.
Sources:
- Milton Friedman: The Last Conservative by Jennifer Burns
- The Years of Lyndon Johnson: The Part to Power by Robert Caro
- https://www.merriam-webster.com/dictionary/laissez-faire
- “Keynesian Economics Theory: Definition and How It’s Used” Investopedia article
- https://www.bls.gov/opub/mlr/2014/article/one-hundred-years-of-price-change-the-consumer-price-index-and-the-american-inflation-experience.htm
- Reaganland by Rick Perlstein
- Capitalism and Freedom by Milton Friedman
- Milton Friedman: A Concise Guide to the Ideas and Influence of the Free-Market Economist by Eamonn Butler
- Friedman on the Donahue show in 1979
Discussion Questions:
- Had you heard of Friedman before this episode?
- If so, what did you know about him?
- What does “laissez-faire” mean in economic terms?
- Does it line up with the Bible in any direct way?
- Why do you think so many conservative Christians lean toward laissez-faire?
- How bad was the Great Depression?
- If you had worked for the government during the Depression, what would you have advocated?
- Why are some people against the New Deal?
- What did the New Deal mean to starving people during the Depression?
- How does a fear of communism play into anti-New Deal sentiment?