So in that spirit, I think some heterodox Keynesian views of Friedman are worth mentioning:
Thomas Palley, “Milton Friedman: The Great Conservative Partisan,” November 27th, 2006.One can also revisit Friedman’s debate with the Post Keynesian economists Paul Davidson and Sidney Weintraub (Davidson and Weintraub 1973), which, I think, makes profitable reading.
James K. Galbraith, “The Collapse of Monetarism and the Irrelevance of the New Monetary Consensus,” March 31, 2008.
All in all, Thomas Palley has a nice summing up of Friedman’s monetarist doctrine:
“Monetarism’s most famous aphorism is that ‘inflation is always and everywhere a monetary phenomenon.’ This saying reflects Friedman’s polemical powers, capturing for monetarists what all sensible economists already knew. Inflation is about rising prices, and prices are intrinsically a monetary phenomenon since they are denominated in money terms.Moreover, attempts by central banks to actually control base money or the broad money stock, as under Margaret Thatcher and Paul Volcker, ended in miserable failure. Central banks soon turned to inflation targeting, and the idea of direct controls on money supply growth died a humiliating death.
Sustained inflation requires that the money supply grow in order to finance transacting at higher prices. For Friedman, this made villainous central banks the exclusive cause of inflation because of his belief that they control the money supply. However, the reality is that the private sector can also inflate the money supply through its own credit creation activities. Additionally, central banks (viz. the Bernanke Fed) may be compelled to temporarily accommodate inflationary private sector pressures to avoid triggering costly recessions. The implication is that inflation can have different causes, something Friedman denied. Sometimes inflation is caused by excessively easy monetary policy or large budget deficits financed by central banks. Other times it is due to private sector forces, including speculative booms and conflicts over income distribution.”
Thomas Palley, “Milton Friedman: The Great Conservative Partisan,” November 27th, 2006.
This is no doubt what prompted John Kenneth Galbraith (father of James K. Galbraith) to say that “Milton Friedman’s misfortune is that his economic policies have been tried”!
Here are some further links:
Ramanan, “Nicholas Kaldor on Milton Friedman’s Influence,” The Case For Concerted Action, 13 July 2013.BIBLIOGRAPHY
“Milton Friedman’s Distortions, Part II,” Unlearning Economics, July 12, 2013.
“Milton Friedman’s Distortions,” Unlearning Economics, November 27, 2012.
Davidson, Paul and Sidney Weintraub. 1973. “Money as Cause and Effect,” The Economic Journal 83.332: 1117–1132.