At the time I read it completely and believed every word.
Personal Viewpoint ON!
Right now I'm pretty much in agreement, but have noticed that age or experience has enabled me to read between the lines and see the things that get ignored or glossed over. When I started reading it I had in mind that I would have 1 word, really a number, that would sum up my feelings:
2008
But it appears that is not really the case. Most academics and economists mainly put the blame for the process on NOT following what Friedman professes. In fact Bernanke was a follower of Friedman and it appears he did nothing at the time when the Fed could have done the things Friedman proposed to ameliorate the crisis.
And when I finished the book I had this uncanny feeling I'd read all this before. So I dug around in my 'old books' boxes and found "Planning for Freedom" by Ludwig von Mises written in 1952. The same subjects. The same suggested solutions. Virtually the same words. Interesting. Must see if I can get a copy of that Hayek book and see if the same was true in the late 1800's.
Now. Could we do some of the things suggested such as Education Vouchers, scrapping masses of legislation, scrapping the lunatic programs that work at cross-purposes, and all the other things today? I am pretty sure we could have in 1974. I'm not so sure now despite some attempts in the US.
My reasoning can best be summed up by Friedman himself when he discusses Hong Kong. When the colony received an influx of refugees after Mao came to power, they were energetic, determined and believed in the value of the individual. Later came the second wave of refugees who had lived under the communist regime for decades. And they were lethargic, rigid, unwilling to take risks and needed to be told what to do in detail.
The parallels to today are, to my eyes, identical. In 1974 there was still a sense that you could just get on with business, not be bugged by endless reams of rules and paperwork and you had the self-interest and responsibility to take the hits with the goals. Today... Not so sure. People have been living in a bureaucratic, mixed economy their whole lives. I could point to the London riots as the result of that kind of living. Take away the rules, let people run free and some will riot and some will build the kind of financial edifices that crashed the world in 2008.
The key seems to be self responsibility and rational self interest that appears to be lacking in todays society. And I would go further and suggest that it would take generations of education and patient stripping of powers from government before the new generations regain what we had when we were young. Who would have the patience, the lawyers and the sheer bloody-mindedness to do it? I tend to feel that's unlikely to happen soon. Rats.
Now one thing is interesting. I recently watched the documentary "Inside Job." Not much different from the documentary "The Men who Crashed the World," but I noticed the details about the aftermath. Almost all the players are still present. All the financial processes are still there. In fact the only thing that's changed is that they're again getting bolder. So we may see another GFC in the next few years. And that's a good thing.
Maybe it'll rattle enough cages to get people to change things. Maybe they'll demand that their bank actually hold their mortgage instead of selling it on to end up in a anonymous CDO. Maybe they'll start telling their governments to get their sticky fingers out of our business. Maybe they'll start demanding that special interest groups be limited to a total federal budget.
To use Ludwig von Mises own words:
"What is needed is not to throw dust in the eyes of the workers, but to convince them. They themselves must realize that the traditional [union] methods do not serve their interests. They themselves must abandon of their own accord policies that harm both them and all other people."Maybe. We'll see.
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