Money Mischief_ Episodes in Monetary History - Milton Friedman [0]
Title Page
Table of Contents
Copyright
Dedication
Preface
CHAPTER 1
CHAPTER 2
CHAPTER 3
CHAPTER 4
CHAPTER 5
CHAPTER 6
CHAPTER 7
CHAPTER 8
CHAPTER 9
CHAPTER 10
CHAPTER 11
References
Index
Footnotes
Copyright © 1994, 1992 by Milton Friedman
All rights reserved. No part of this publication may
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Some material previously appeared in Free to Choose by
Milton Friedman and Rose D. Friedman, copyright © 1980, 1979
by Milton Friedman and Rose D. Friedman.
Some chapters first published by Journal of Political Economy,
1990; Journal of Economic Perspectives, 1990; and Monetary and
Economic Studies (Bank of Japan), 1985.
Library of Congress Cataloging-in-Publication Data
Friedman, Milton, 1912–
Money mischief: episodes in monetary history/Milton
Friedman.—1st ed.
p. cm.
Includes bibliographical references.
ISBN 0-15-661930-X
ISBN 978-0-15-661930-1
1. Monetary policy—History. 2. Monetary policy—United
States—History. 3. Money—History. I. Title.
HG230.3.F75 1992
332.4'6—dc20 91-23760
Designed by G. B. D. Smith
Printed in the United States of America
First Harvest edition 1994
DOC 20 19 18 17 16 15 14
To RDF
and more than half a century
of loving collaboration
Preface
In the course of decades of studying monetary phenomena, I have been impressed repeatedly with the ubiquitous and often unanticipated effects of what seem like trivial changes in monetary institutions.
In the Preface to an earlier book, The Optimum Quantity of Money, I wrote: "Monetary theory is like a Japanese garden. It has esthetic unity born of variety; an apparent simplicity that conceals a sophisticated reality; a surface view that dissolves in ever deeper perspectives. Both can be fully appreciated only if examined from many different angles, only if studied leisurely but in depth. Both have elements that can be enjoyed independently of the whole, yet attain their full realization only as part of the whole."
What is true of monetary theory is equally true of monetary history. Monetary structures that, looked at from one angle, appear bizarre, when looked at from another are seen to be simply unfamiliar versions of structures we take for granted, almost as if they were part of the natural world. The first chapter of this book is a striking example: stone money and gold money are so alike that they might be found in the same quarry.
That brief chapter having, I hope, intrigued you by illustrating how misleading surface appearances can be in dealing with monetary phenomena, the second chapter sketches the essence of monetary theory in simple terms. It provides a background for appreciating the historical episodes that follow.
The next three chapters tell true stories of seemingly minor events that have had far-reaching and utterly unanticipated effects in history. Chapter 3 tells how the seemingly innocent omission of one line from a coinage law came to have major effects on both the politics and the economics of the United States over several decades; chapter 4 provides the empirical underpinning for those conclusions; and chapter 5 tells how the work of two obscure Scottish chemists destroyed the presidential prospects of William Jennings Bryan, one of the most colorful and least appreciated politicians of the past century.
Following this examination of historical episodes, chapter 6 examines a great issue—bimetallism—that played a major role in the events described in chapters 3, 4, and 5. A recent writer describes bimetallism as giving rise "from the mid-1860s to the mid-1890s [to] the liveliest theoretical disputes among economists and the sharpest economic policy debates in the