Milton Friedman begins chapter 2 by explaining that one of the main graphemes of the administration is to encumber compulsion. This is a necessity in a free grocery store economy be display case it levels the playing field. In a free market economy both sides should benefit from a transaction and coercion destroys this.
Friedman states that most wad follow most of the rules, most of the time. The government only needs to punish the relatively few people who don?t obey the laws. Friedman claims, ?The need for government in these respects arises because absolute freedom is impossible.? People don?t agree on everything so having absolute freedom would cause a great deal of conflict. Friedman believes that without the government enforcing their laws in about way, there would be chaos.
Friedman was the leading proponent of the monetarist school of sparing thought. He maintained that there is a close and horse barn link between pompousness and the bullion hang on, mainly that the phenomenon of inflation is to be regulated by controlling the amount of money poured into the national economy by the Federal booking wedge; he rejected the use of fiscal policy as a tool of demand management; and he held that the governments role in the guidance of the economy should be severely restricted.
Friedman wrote extensively on the Great Depression, which he called the Great Contraction, arguing that it had been caused by an ordinary financial shock whose duration and seriousness were greatly increased by the subsequent contraction of the money release caused by the misguided policies of the directors of the Federal Reserve.
Throughout the Federal Reserve?s history it has been known to change the money supply in a cyclic manner. When the economy is stumbling they push more money out and when it is booming they shrink the money supply.
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