> He may have been wrong, but he pushed us to analyze what money is and
> how it works. Of course he was also so polemical, egotistical and
> offensive that he also pushed left-leaning people away from any study
> of money lest they be associated with his increasingly nutty
> anarcho-capitalist hoohah.
I'm pretty sure Simmel already had people thinking some about money. And Keynes and others knew about monetary policy as well. The thing Friedman did was to say that they had misconceptions about what monetary policy could be used for, but what he really meant was that they had misconceptions about what the state can do in the economy. Whatever his theoretical insights, they were never separate from his anarcho-capitalist hoohah: they were just the razors he was using to pare down the role of the state.
>
> But Friedman looked at the Great Depression and he saw something that
> had to be explained - idle workers, idle factories, homeless people,
> empty homes. He came to the conclusion that what was keeping those
> people from doing jobs that needed doing and paying rents and
> mortgages for those homes was a lack of money. And I think that's
> obviously true. Does it mean that monetary policy is all we have to
> worry about? No
Keynes saw the same thing and had a very different interpretation--and had more than one answer for how to consider the variety of problems that cause it. Friedman may be inspiring to you, but his basic argument, from the late 1940s on, was that the only thing the state should do in the economy
. But Volcker got us out of (for us) hyperinflation
> with Monetarist tightening and recently Greenspan helped kick us out
> of the anti-bubble from the 2000 stock collapse by hosing the economy
> down with money.
Yeah but that "hyperinflation" (which was hardly a hyperinflation by world standards) was caused by an extreme upset in the money supply, no? I mean with Eurodollars and petrodollars and Citibank pretty much printing its own money on the assumption that loaning it to countries who couldn't pay it back would be okay either way because countries don't go bankrupt. Volcker stopped the inflation here (which was dependent on a certain, class based definition of inflation that privileged lenders over borrowers) by exporting it to the Third world, compounding their debt crisis, and, in the process, getting US labor back into line and getting more people on board with the whole "drown the state in the bathtub" idea. Greenspan just shifted the burden to housing. We'll see how brilliant that was shortly.
> Labor cannot be translated into use-value without exchange of some
> kind. It's just not possible. In a modern economy the simplest
> products require the work of too many laborers to be put together
> without something analogous to market exchange. What carries the
> information across time and space to make that exchange rational?
> Money. And money doesn't just appear out of nowhere. It is a social
> product - a product of complex agreements and shared understandings.
Yes but this cultural and social notion of money was pretty clear to Marx and certainly Simmel. But the focus on the general equivalent rather than the source of that value is the key bit of the problem. It's the first thing in Capital. When you also believe in a natural rate of unemployment resulting from workers' choice to be unemployed, well, it makes your social science credibility somewhat suspect in my eyes. When you then say that the state can do nothing to help people get jobs because they simply don't want to work, they've made that choice, and it is better to concentrate on interest rates, etc. then it leaves little doubt whose side the theory is meant to help.
> Now it's true that people like Friedman have been such relentless
> apologists for capitalists and such vicious attackers of anything even
> related to socialism that one is obliged to fight against THEM. But
> Friedman's role as a public intellectual who basically said that you
> can't understand the world unless you understand money has made more
> people think about economics than almost anybody but Marx and Keynes.
But isn't this mostly because his theories got implemented into fed policy and it sort of became a self fulfilling prophecy? I think Mark Blyth on this is pretty clear that we wouldn't be thinking at all about Friedman if his ideas hadn't been expedient at a certain political juncture.
> What we need is are direct answers to the economic ideas and concerns
> raised by Chicago school economists.
Sure, rhetorically, theoretically. But that doesn't mean we have to like them or not wish they hadn't used their intellectual power to apologize for the systematic dismantling of the welfare state and the US labor movement. That ain't gonna help the revolution much either.
-s