Archive for April, 2012

For the NY Times, Greg Mankiw from Harvard explains the importance of competition:

Competition is Good for Governments, Too

If the government’s job is merely to provide services, like roads, schools and courts, competition among governmental producers may be as good a discipline as competition among private producers. But if government’s job is also to remedy many of life’s inequities, you may want a stronger centralized government, unchecked by competition.

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While driving a rather long distance by car, I recently listened to a great podcast by EconTalk in which Russ Roberts discusses Capitalism and Freedom with Milton Friedman. One particular point in the discussion, I guess, truly deserves a replication:

Friedman on Capitalism and Freedom

Issue by issue, it’s easy to make the case for discretion. However, when you see the cumulative effect of going issue by issue, you can really make the case for principles.

A good example is freedom of speech. A lot of Americans would be against freedom of speech if you went issue by issue. And yet we sustain it through enough people believing that it’s a good thing.

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With the ECB and Fed increasing money supply, it will not come as a surprise if we observe higher rates of inflation in the years ahead. Thus it is a good idea to have a closer look at the causes and repercussions of inflation. Nobel laureate Milton Friedman has dedicated much of his work to the role of monetary policy and he discussed the issue some years ago:

Inflation is always a monetary phenomenon, a result of too much money.

Governments control the amount of money. As a result, inflation is made in Washington and nowhere else.

Inflation is a form of taxation. If government spends more than it takes in through what is called taxes, it has to meet the difference either by printing money or by borrowing.

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Nobel laureate Milton Friedman on the proper role of government in a free society:

There are few more important sources of confusion about the proper role of government in our society than the confusion between the two very different meanings of the word “free”.

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