Product Description

Friedman makes clear once and for all that no one is immune from monetary economics-that is, from the effects of its theory and its practices. He demonstrates through historical events the mischief that can result from misunderstanding the monetary system. Index.

Product Details

• Amazon Sales Rank: #60576 in Books
• Published on: 1994-03
• Number of items: 1
• Binding: Paperback
• 286 pages

From Publishers Weekly
From the Micronesian Yap islands' 12-foot stone "coins" to today's paper currencies backed only by fiat, Nobel-laureate economist Friedman ( Free to Choose ) here examines anomalies of world monetary history, including the effect of successive 19th-century gold ore discoveries and refining improvements on U.S. and British tender. He traces American currency's long, contentious gold-silver bimetalist saga, marked by the so-called Congressional coinage "crime of 1873" and ending with William Jennings Bryan's unsuccessful "Cross of Gold" presidential campaign in 1896. Friedman cites harsh lessons from postwar hyperinflation in many countries and declares that Roosevelt's 1933 silver-buying program may have skewed China's silver-based economy toward eventual communism. Uncontrolled money growth is the cause of inflation, the author stresses, and only monetary reform, despite undesirable side effects like unemployment, can cure it. Abstruse, theoretical and chiefly for the initiate, the book recycles parts of earlier works by Friedman, who himself suggests here that the general reader might wish to skip a particularly challenging chapter.
Copyright 1991 Reed Business Information, Inc.

From Library Journal
In this latest work, Nobel Prize-winning economist Friedman examines the role of money backed by gold and silver and our current world of fiat backed by faith. After an initial restatement of the essence of his monetary views, Friedman examines the historical impact of bimetallism in the United States and elsewhere. He devotes the remainder of the book to the principles and problems of modern money unlinked to any commodity. Often iconoclastic yet always persuasive, whatever Friedman has to say about money should always be read. Highly recommended for college and university libraries.
- Richard C. Schiming, Mankato State Univ., Minn.
Copyright 1991 Reed Business Information, Inc.

From Kirkus Reviews
A lively, enlightening introduction to monetary history from the libertarian economist whose contributions to the quantity theory of money earned him a Nobel Prize in 1976. Starting from the premise that no society or individual is unaffected by monetary policy (which centers on control of a nation's money supply), Friedman (co-author, Tyranny of the Status Quo, 1984, etc.) offers a quick and simplified briefing on monetary theory that stresses, among other matters, one of his favorite themes--that ``inflation is always and everywhere a monetary phenomenon.'' His stage set, Friedman ranges widely over time and place in demonstrating that there invariably is more than meets the eye to monetary events. He recounts, for example, how an 1873 coinage law had unintended consequences for American politics and economics over the next couple of decades. The author moves on to link the 1887 invention in Scotland of a process to extract gold from low-grade South African ore to the frustration of William Jennings Bryan's presidential aspirations in 1896 and beyond, moving smoothly into an accessible discussion of bimetallism. Friedman also makes a plausible case for the proposition that FDR's silver-purchase program during the 1930's hastened the Communist takeover of mainland China after WW II. Covered as well (in a prescriptive anti-Keynesian context) are upward price spirals down through the ages, the collapse of the Bretton Woods accord, fiat money, specie, the European Monetary System, and efforts by Third World countries to peg their currencies to the US dollar. Informed and informative perspectives from monetarism's most articulate apostle. -- Copyright ©1991, Kirkus Associates, LP. All rights reserved.

Customer Reviews

Neither the Govt. nor the Central bank controls the money supply.The private commercial banking industry controls the money
I will concentrate this review of Friedman's book on the the time period 1900 onward and cover Friedman's analysis in this book as it applies to the banking system set up in 1913 by the Federal Reserve Act.Friedman has an excellent discussion of the problems resulting from the attempt to introduce a bimetallic standard in the USA that occurred in the late 1870's and culminated in the 1896 election between William Jennings Bryan and William McKinley that resulted in the defeat for bimetallism.He has a number of other interesting discussions on other episodes involving attempts to inflate the money supply,however defined.However,it is in his discussions of post 1913 monetary policy that he gives a misleading impression about the central bank's powers .The Federal Reserve System(FRS),consisting of the 12 Federal Reserve District Banks of which the New York Federal Reserve District Bank has by far the most power ,is not a government agency in the usual sense of the word.THe Federal Reserve Board chairman is not a member of the President's cabinet.The United States government has only partial control the FRS.The FRS is subject to no government audit.The FRS is subject to no government budget constraint.The FRS is a quasi public,quasi private entity.The set up of the FRS,both in 1913 and 2008, reflects the tremendous economic and political power of the private profit maximizing(sometimes sales maximizing)commercial banking industry.Time and again in this book(as opposed to his coauthored 1963 Monetary History of the United States,1867-1960)Friedman gives the misleading impression that the government of the United States controls the money supply(as defined by Friedman, which is M1 or M1A)or the FRS controls the money supply.This is very misleading.The Federal Reserve System controls ONLY the monetary base.This is defined as the amount of notes(Federal Reserve issued currency)in circulation,plus vault cash,plus the FRS mandated bank reserves,based on a reserve requirement that all member banks must meet.The FRS can impact the amount of reserves available by open market operations but can't force the banks to make the additional loans if the banks do not want to use the expanded reserves.The banks can refuse to make use of the added reserves and hold them ,for safety first or precautionary reasons,as excess or free reserves.This is precisely what happened in the United States in the 1930-1934 period ,in Japan in the 1994-2003 period,and what has been happening in the 2007-2008 period.Ben Bernanke,in his desire to bail out Wall Street and the private commercial banking system ,has made hundreds of billions of additional loans available at special very low interest rates to the banking system.No additional private commercial bank loans have been forthcoming.The money supply increases or decreases as the private commercial banking system decides to expand loans or decrease loans according to their own private decision making calculus based on profit(sales) maximizing criteria.If commercial banks do not wish to lend then it makes no difference what the FRS does with respect to the monetary base.It can expand the base all it wants to.Nothing will happen unless,as J M Keynes so aptly put it,confidence is restored to the economic system as a whole so that expectations,a function of Keynesian uncertainty and not Friedmanite risk(Friedman always used the standard deviation of a hypothesized normal probability distribution to denote risk), of the future become optimistic.

Review for a Nobel Prize winner...
Review by a non Nobel Prize winner:
Dirty details of the progress of our United States Currency are the theme of this book. If you like the arithmetic to pop out as you look at text, and are one who likes absorbing and detailed accounts which provide tools for thought, you should like this collection of papers and essays on money. I did.

Very interesting
Milton Friedman is simply the best. So far I've read a couple of chapters and already am extremely enlightened.