Delong's subsidiary theme in

Flavius — Tue, 22 Mar 2011 17:54:40 +0000

Delong's subsidiary theme in this lecture was that the ultimate cause of this Recesson was Milton Friedman's personal philosophy

, what made Friedman so certain that instability in the money stock was the cause and not the effect? I think the answer is that he was a committed libertarian. He was not just an economic libertarian--not just a believer that the government shouldn’t be interfering in the marketplace in prices and quantities and property rights. He was a social libertarian. He was a believer that the government should not be sticking its nose into people’s bedrooms, or into their ideas about how to pursue better living through chemistry. He wanted to say that that government is best that governs least: establish property rights, set up some courts to decide things if people dispute, otherwise just get out of the way--don't interfere with market prices or market quantities or property rights or social mores, but get out of the way in order to maximize individual liberty.The problem is that this does not fit with macroeconomics

And because Friedman wanted to believe the state shouldn't interfere in the economy he convinced himself ( and generations of followers) that it couldn't , that the economy didn't need regulation. The ultimate source for the belief in the "efficient market" which regulates itself. The economists' version of a perpetual motion machine.

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Delong's subsidiary theme in