Hayek on Milton Friedman and Monetary Policy

Friedrich Hayek discusses Milton Friedman's Monetarism and monetary policy.

For more on Hayek's ideas on monetary policy see
Choice in Currency: A way to stop inflation
(for a concise summary) at

http://www.iea.org.uk/publications/research/choice-in-currency-a-way-to-stop-...

or see The Denationalisation
of Money for a more a more detailed proposal at

http://www.iea.org.uk/sites/default/files/publications/files/upldbook431pdf.pdf

This is an excerpt from a longer interview which can be found here http://www.vimeo.com/4063439

Category:

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Tags:

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• Friedman
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• Maynard
• Keynes
• F.A.
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• Macroeconomics
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[FrederikLambert]

I dont understand his english :s and i know his words are gold



[Malthus0]

@FrederikLambert There are subtitles you know. Read the annotation at the begining of the video.

[diogotomediogo]

wow never thought of money being a monopoly controlled by government. but i mantain that governments should have control on how much money circulates on the economy. otherwise the consequences would be unpredictable to say the least.

[Malthus0]

@diogotomediogo The Austrian take on industrial fluctuations is that they are caused by inflation leading to the missallocation of resources. Monetary policy will always lean in favour of inflation due to the fear of overshooting & causing deflation. So from the Austrian point of view crisis is inevitable with gov control of money.As for unpredictability that point could be extended to any other product on the market.Stabilty arises from the bottom up not from central control.

[captcool420]

I like the idea of competing currencies theoretically, but in practice it seems like people would eventually settle on one strong currency for the sake of convenience.

[Malthus0]

@captcool420 That is what would happen most likely. However the point of competition is not necessarily having loads of competitors a la the perfect competition model. As Hayek points out competition is a discovery procedure & we don't know the optimum No. of competitors before the fact. As long as there are no barriers to entry the dominant firm will be constrained by real & even only potential competitors & be replaced if they take their eye of the ball. Someone will always fill their shoes.

[Malthus0]

@shaqdaddy11 Captions are now available 

[richardcadbury]

I can't believe we have hundreds more channels now than when this was made, and we don't have shows like this anymore on even one of them.

[aem945532]

See 04:15 . This has unfolded recently with the Liberty dollar experiment in NC by the freedom fighter, Bernard van Notthaus. The Fed gov is trying to put him away for 22yrs just for making an independent currency that was backed by Gold and Silver reserves.

[aem945532]

@OldRightPaleocon Well put. Btw, your name, "oldrightpaleocon" is the shit! Someone needs to do a study on the psychology behind the Paleo-Austrian-Liberty combo versus the Vegan-Keynesian-Fascist combo. Its fascinating. RP 2012!

[DavidByrne85]

Hayek is a pathological fatalist. He's essentially a lunatic.

[FrederikLambert]

@Malthus0 awesome, this will help out a lot. I like the Milton Friedman vids, so i would love Hayeks views

[cooljj82]

@Malthus0 I would also like to add that people are inherently unpredictable. Because of that their are praxeological and epistemological problems to central planning. There is no way to forcast the decisions of 309 million people accurately. Ludwig Von Mises wrote very extensively about that.

[OldRightPaleocon]

Hayek, Mises, and Rothbard were Austrian economists. Friedman was a monetarist. History, especially the last 10 years, has proven that the Austrians were correct in regards to monetary policy, and economics in general.

[groam6666]

@dubified89 I don't recall him saying that, but I don't doubt it either. I think it's indexing the money supply to real GDP. That way inflation won't increase or decrease very much.