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Quotation of the Day…

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… is from pages 175-176 of the collection of previously unpublished (or only obscurely or inaccessibly published) essays by Milton Friedman, The Indispensable Milton Friedman [2] (Lanny Ebenstein, ed. 2012); specifically, it’s from Friedman’s 1970 essay “The Counter-Revolution in Monetary Theory”:

A number of factors contributed to a change of attitude towards the Keynesian doctrine.  One was the experience immediately after the Second World War.  On the basis of the Keynesian analysis, economists and others expected the war to be followed by another great depression.  With our present experience of over two decades of inflation behind us it is hard to recognize that this was the sentiment of the times.  But alike in the United States, in Great Britain and in many other countries, the dominant view was that, once the Second World War ended, once the pump-priming and government spending for military purposes ended, there would be an enormous economic collapse because of the scarcity of investment opportunities that had been given the blame for the Great Depression.  Massive unemployment and massive deflation were the bugaboos of the time.