Milton Friedman’s Praise for a Real Gold Standard
Was the gold standard a good thing?
Nobel Prize winning Economist Milton Friedman — an influential and revered figure — is largely thought of as an anti-gold-standard hawk. (He once wrote me a long letter, now lost in my archives, lecturing me about my advocacy for the gold standard.) But his reputation as a foe of the gold standard is exaggerated.
Friedman himself had a far more interesting and nuanced view of the gold standard than is generally recognized.
Let’s take a look at what Friedman actually had to say. As Prof. Richard M. Ebeling wrote for the Future of Freedom Foundation in 1999:
Milton Friedman, as we have seen, had advocated a fiat or paper money standard guided by a monetary rule of an annual expansion of the money supply at a fixed rate because he believed that it was less costly than a gold standard, less open to inflationary excess, and more likely to provide the monetary framework for general economic stability. (See “Monetary Central Planning and the State, Part 26: Milton Friedman and the Monetary ‘Rule’ for Economic Stability,” in Freedom Daily, February 1999.)
But by the mid 1980s, Friedman had second thoughts about whether government could be trusted ever to…
