Brad Delong "hoists the jolly roger" posting a pdf of an entire speech given by Jacob Viner, one of the original economics professors at the Chicago School. He needn't have done so, since the essence of Viner's argument (that deficit spending + deliberately-caused inflation was the correct way to fight the Great Depression) has already been discussed within the realm of fair use by others. The brain-teaser is, who is the person who cites Viner approvingly? Here's the quote:
Even more pertinent is a talk Viner delivered in Minneapolis on February 20, 1933, on 'Balanced Deflation, Inflation, or More Depression' (Viner 1933). While agreeing with Robbins on the harm done by wage and price rigidity, and in particular by the Hoover Administration pressure against wage reductions, he also spoke vigorously against letting the cure take its course:
'We have already had three years of patient waiting, probably three years too much. It is arguable that even dangerous remedies now threaten less risk of disaster than does continuance of inaction.'Had it note been for this campaign of fear ... it would have been sound policy on the part of the Federal government deliberately to permit a deficit to accumulate during depression years, to be liquidated during prosperity years .... The outstanding though unintentional achievement of the Hoover Administration in counteracting the depression has in fact been its deficits of the last two years, and it was only its alleged fears as to the ill effects of these deficits, and the panic which the big business world professed to foresee if these deficits should recur, which have made this method of depression finance seriously risky
....
The basic argument for inflation is that it would operate to raise product- prices more than cost prices, would in this way restore a profit margin for business, and thus would bring about an increased volume of production and of employment. Against inflation many things are urged...
I can see little force in most of these objections...
....
Assuming for the moment that a deliberate policy of inflation should be adopted, the simplest and least objectionable procedure would be for the federal government to increase its expenditures or to decrease its taxes, and to finance the resultant excess of expenditures over tax revenues either by the issue of legal tender greenbacks or by borrowing from the banks.'
The following continuation of the above discussion ought to give it away:
.... My main point is ... [w]hat, in the field of interpretation and policy, did Keynes have to offer those of us who learned their economics at a Chicago that was filled with these views? Can anyone who knows my work read Viner's comments and not see the direct links between them...? Indeed, as I have read Viner's talk for the purposes of this paper, I have myself been amazed to discover how precisely it foreshadows the main thesis of our 'Monetary History' for the depression period....
In case you haven't already figuered it out, this raving left-winger was none other than Milton Friedman as set forth in the compilation "Critical Assessments" By Ronald N. Woods.
Comments
Viner dissed Keynes though right?
Jacob Viner for those trying to follow along at home.
Pretty amusing although few know that Milton Friedman also blasted global migration as a methodology for cheap labor. He called the H-1B guest worker a glorified corporate subsidy for cheap labor.
So much for that agenda as a method to labor arbitrage from all of those who worship at the great Hayek temple of lore.
Correct
But for esoteric theoretical reasons, not on his prescription for getting out of the Depression.