It’s been decades since I last played Monopoly, but the board game comes to mind when contemplating the commentary of the members of the Monetarist School. Consider the play money that comes with the game.
No doubt Monopoly participants would find it difficult to compete without it. At least for a few minutes. In a game about achieving monopoly, the fake money is the way players keep score. For Monopoly to be a game, money is needed. Hasbro HAS +1% supplies it. Members of the Monetarist School seem to have internalized this notion, and have mistakenly applied it to the real economy.
Consider monetarist thinkers Steven Hanke and John Greenwood. They deeply believe the Fed isn’t “supplying” enough money, and that a recession in 2024 is “baked in the cake” based on what they contend is the Fed’s 4.5% contraction of M2 since March of 2022. As they see it, “the Fed is way too tight” from a “Friedmanesque, quantity-theory-of-money perspective.” That Milton Friedman wisely admitted in a 2003 Financial Times interview that the quantity theory of money was bogus doesn’t seem to deter his many disciples, including Hanke and Greenwood. Too bad for Friedman. His disciples will hang the quantity theory of money around his neck in perpetuity, and to his perpetual diminishment.
Read the entire article at Forbes here.
