Milton Friedman’s Monetary History

Cato Journal devotes a special issue to this marvelous book, co-authored with Anna Schwartz. Contributors to this symposium include Friedman, Schwartz, Allan Meltzer, William Poole, and Bennett McCallum. Of course Friedman’s monetary explanation of the Great Depression, radical in its time, is now part of the mainstream. And I see this book as providing a better statement of Friedman’s true method than his classic “The Methodology of Positive Economics.” His judicious and non-formulaic mixture of theory, empiricism, and history remains a classic account of how economic science can contribute to human knowledge. Friedman was never a naive positvist. His real method is that of consilience, and reaching a sophisticated reflective equilibrium of historical and theoretical understanding. It is sad that this book, with its low-tech statistics, would probably no longer pass as a Ph.d. dissertation at the University of Chicago.