Monetarism Quotes
I don't know what monetarism is. If monetarism just means a good old-fashioned quantity theory, of course it has not failed. If it means the particular version of Milton Friedman, I think it has because he imagines that he can achieve - ascertain - a clear quantity relationship between a measurable quantity of money and the price level. I don't think that is possible. In fact, just about 40 years ago in the opening sentences of my book, Prices and Production, I wrote that it would be a great misfortune if people ever cease to believe in the quantity theory of money. It would be even worse ever to believe it literally. And that's exactly what Milton Friedman does.
Friedrich Hayek
Not only is it possible to devise complete models of the economy on hypotheses other than rationality, but in fact virtually every practical theory of macroeconomics is partly so based. The price- and wage- rigidity elements of Keynesian theory are hard to fit into a rational framework, though some valiant efforts have been made. ... But if the Keynesian model is a natural target of criticism by the upholders of universal rationality, it must be added that monetarism is no better. I know of no serious derivation of the demand for money from a rational optimization. ... The use of rationality in these arguments is ritualistic, not essential.
Kenneth Arrow
Establishment necessarily involves a subtle corruption of the spirit of the church because it is safely embedded in the wider establishment of society, which includes the privileged and the powerful. ... How can those Christians who see monetarism being so cruelly applied to the old, the sick, the homeless, women, the black community, and the young unemployed, lead a struggle against this injustice from within an established church subject to a Cabinet and a parliamentary majority composed of those very people who are responsible for implementing those very policies?
Tony Benn
As the journalist Nick Cohen noted about accusations that atheism is like religion, "It's not a charge I'd throw around if I were seeking to defend faith. When people say of dozens of political and cultural movements from monetarism to Marxism that their followers treat their cause ‘like a religion,' they never mean it as a compliment. They mean that dumb obedience to higher authority and an obstinate attachment to dogma mark its adherents.”.
Jerry Coyne
Accounting for the artificial boom and the consequent bust is not part of Keynesian income-expenditure analysis, nor is it an integral part of monetarist analysis. The absence of any significant relationship between boom and bust is an inevitable result of dealing with the investment sector in aggregate terms. The analytical oversight derives from theoretical formulation in Keynesian analysis and from empirical observation in monetarist analysis. But from an Austrian perspective, the differences in method and substance are outweighed by the common implication of Keynesianism and monetarism, namely, that there is no boom-bust cycle of any macroeconomic significance.
Roger Garrison
While many of the conflicting claims can be reconciled in terms of the short-run and long-run orientation of Keynesians and monetarists, respectively, and in terms of their contrasting philosophical orientations, neither vision takes into account the workings or failings of the market mechanisms within the investment aggregate.Austrian macroeconomics is set apart from both Keynesianism and monetarism by its attention to the differential effects of interest rate changes within the investment sector, or-using the Austrian terminology-within the economy's structure of production.
Roger Garrison
