Wong Wrong Wrong! Allende was a doctrinaire marxist whose first job was to destroy the kulaks (middle class0> he chose to do this by inflating the currency, and making government jobs. By the end of this disastrous experiment, inflation in Chile was humming along at >500%/year. Chilean’s savings accounts were wiped out (as Allende planned). The next step (of course) was to nationalize private industry, and give total control over to goverment (dictatorship of the proloterait). Fortunately, agroup of patriotic generals intervened…and Friedman and the Chicago School were enlisted to repair the wreckage,
John, you left out some arguably more important parts of your wikipedia cite than the passage you cited:
There’s also the grand failure of monetarism to act as it would predict:
In other words, monetarism as a political and economic ideology and tool seems to have fallen apart, and the legacy of Friedman’s ideas on that score seem, at best, a mixed bag.
Of course, that has nothing at all to do with whether or not his work was theoretically brilliant: it doesn’t necessarily have to be 100% right to deserve a Nobel prize, and no one can ever rightly claim that Friedman’s contributions big and small, wrong and right ,weren’t important in the development of economics. They were, and anyone that knows economics knows that he was a major mind in the field for the second half of last century.
I wouldn’t go that far-- it’s not a “grand failure”, it’s just that there is some controversy over what happened in the recent past. Still, it is inarguable that it was Friedman’s ideas that when put into practice by Volker and Greenspan contributed greatly to the end of the inflation/unemployment cycle that he plagued the US for quite some time. That he decided his theories needed some tweaking as more empirical data came along just goes to illustrate that he wasn’t a domgatic idealogue, as some in this thread have expressed (not you, btw).
It’s not a rhetorical fallacy in that instance, but it is a logical fallacy. Euclid’s theorems don’t work because Euclid wrote them, they work because they’re logical.
@John Mace
Viewing anything as a commodity is just fine, but also trivial.
Controlling the money supply is like squeezing a balloon, other things will aquire ‘moneyness’.
I found Friedman’s example of ‘Helicopter Money’ particularly comical, and seriously ill thought out. In a closed economy it would generate inflation, but in an economy with well lubricated trade routes it would generate affluence. Possibly temporary, as in ‘Cargo Cult’, possibly it would kick start things.
My view is that Friedman was a menace, he over simplified things and he identified an indicator rather than a target.
My problem is with Friedman is that he seems to be responsible for the abject worship of the invisible hand you see in conservative economists lately.
Cite?
Here ya go!:Amazon.com
of course, if you are a marxist, you won’t believe any of this, anyway! :eek:
Proper cite.
You completely missed the point on that. They key thing is that gov’t has that one lever (interest rates) and one needs to know which way to push it when. Friedman overturned the conventional wisdom, and gave the best advice so far on how to that. He was very careful to point out that economincs is far from an exact science, and exposed the folly of those who thought they could “tweak” the economy every which way with that one lever.
Don’t confuse his popularizations with his scholarly work. You have to simplify things when writing for the public. Come back in here when you’ve finished reading A Monetary History of the United States and then tell us how he oversimplifies things.
Sorry. An autobiography of Friedman is not exactly support for your claims regarding events that took place three to five years prior to Friedman’s invitation by the Pinochet regime. Your little scenario ignores the fact that inflation had seriously begun under Allende’s predecessor and was initially checked by Allende. Whether it resumed because of his policies or because of outside financial manipulation, I do not know, but a claim that his policies were the sole cause of it are simply historically inaccurate. Claims that he had a specific intent to “destory the kulaks” needs to be supported by something better than a vague refer4ence to the biography of someone who was not there.
I am quite willing to believe that Allende’s eventual plan would have failed. Raw socialism is an unsuccessful economic model. The speed with which Chile’s economy collapsed, however, indicates more than bad policies and your (unsupported) claims for Allende’s intentions read like so much Right-wing propaganda.
Probably. OTOH, maybe they could have got that Cybersyn thing to work. We’ll never know now.