I usually romp through Eamonn Butler’s books and Milton Friedman: A concise guide to the ideas and influence of the free-market economist was no exception.
The book sets out how Friedman became a public intellectual of worldwide influence, how to end financial crises and how to cure inflation. People, trade and currencies should be free, he argued. Government fails and markets work to promote diversity and help ordinary people.
Friedman advocated a 100% reserve requirement on demand deposits, giving government direct control of the money supply. More boldly, he proposed abolishing central banks and allowing money to be produced like other goods in a competitive private market. In that, he agreed with Hayek and I very much regret they did not win the argument decades ago. As a consequence, we have had a state-directed, libertine banking system which has, predictably enough, undermined both the real economy and people’s faith in the justice of a supposedly free economy.
As Sir Mervyn King said, “Of all the many ways of organising banking, the worst is the one we have today.” Before I read this book, I was inclined to criticise Friedman for it. I understand now that the blame for our current financial system is to be laid elsewhere. Even so, I remain sceptical of aspects of the thought of the time. Policy was too dependent on a false conception of the rational individual and too opposed to co-operatives and mutuality. I remember at the time condemning the demutualisation of the building societies, albeit instinctively.
Eamonn’s personal regard for Milton Friedman radiates from this book. Whereas his Mises Primer conveys a reluctant endorsement which falls short of enthusiasm, Milton Friedman bursts with a joyful celebration of this influential economist. I’m not likely ever to identify as a Friedmanite but, after reading this excellent book, I find I am warming up to the man who was undoubtedly one of the twentieth century’s most successful advocates of freedom.