I can’t tell if I’m missing the substance in this article about Milton Friedman or if there just isn’t any there. What is one to do with non-sequiturs like this one, for example:
A rigorous edifice was of course never established, because econometric modeling inevitably involves crude stylised assumptions and the use of measurable proxies for unquantifiable entities. And a definitive proof of causation (money supply drives inflation) is out of the question. So monetarist prescriptions were called into service in Australia, the USA and the UK on grounds of politics and prejudice rather than on merit.
Because the author believes economic theory is bogus, that theory could never give a proof that inflation is “always and everywhere a monetary phenomenon”. Ok, I’m with you so far. But because economic theory can’t give a proof of monetarism to author’s satisfaction, monetarist policy was put into place nefariously? ((Besides being a logical fallacy, this is just silly. Of course, *policy* was put into place because of politics… that’s what those politicians do.))
The rhetorical signal to noise ratio is really low in the article. After claiming there’s no connection between money supply and inflation, the author writes, “[monetarism] also omits the dialectical surge of both money supply and inflation attendant on interest rate hikes that accompany attempts to restrict money supply growth.” Maybe I don’t know all the nuances of the Marxist vocabulary, but wouldn’t a “dialectical surge” imply there is fact a positive relationship between those two variables?
The high heat to light ratio suggests I’m not missing much.
Yet, I’m not sure if this article represents a serious critique of mainstream economics. I keep thinking it might be serious because the author seems to have some idea of neoclassical economics (or at least its buzzwords: helicopter drops, positive economics, monetarism, etc). But then again, from the little actual criticism I can discern, it appears the author is arguing against economic theory as it was 30 or 40 years ago. The firm is a black box? Agents are price takers? “There is no social dimension, no political dimension”?
The best I can do to defend the author is to say he must be talking only about Friedman’s view of theory when he retired over 30 years ago and he’s not talking about economic theory as it is today.
I still don’t know if I should take the article seriously or not. If I do, I’m not sure if I should be happy or sad that this might represent the best the critics can come up with.