Sunday, November 19, 2006

Milton Friedman

Charles Richardson writing in Crikey (subscription required for full item) has fallen into hagiography of Milton Friedman. To claim "his great achievement was to rehabilitate the notion, now accepted almost universally, that inflation is primarily a monetary phenomenon" is to ignore the fact that the theory he espoused was all about setting money supply targets and a supposed direct relationship. Yes, he did remind us that monetary policy was important, but he was completely wrong on how to run the policy.

And yes Friedman was a great libertarian, but his incessant drumming on establishing that the purpose of a corporation is the generation of shareholder value is responsible for much of the governance dilemmas of the 1990s and is directly responsible for the obsenity of "options".

The best column I've seen so far is by Ross Gittins in the SMH

No comments: