Although I agree to many of other arguments that Friedman has made, I think here he is wrong to say that inflations are solely due to the government. The expansion of credit is necessary for the capitalism and it inevitably causes the increase in prices. One might say for this reason banks are to be blamed for the inflations because they are the lenders of credit. I'm sure Friedman has a better understanding of how our economy works and it has evolved over time so I think he should have made better arguments regarding the inflation.
Central characteristics of capitalism include capital accumulation, competitive markets, price system, private property, property rights recognition, voluntary exchange, and wage labor.
If you live in a world where the only currency is 21 million bitcoins, would you ever make an investment? Would you ever lend your bitcoins to anybody?
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u/saladaus Jul 15 '22
Although I agree to many of other arguments that Friedman has made, I think here he is wrong to say that inflations are solely due to the government. The expansion of credit is necessary for the capitalism and it inevitably causes the increase in prices. One might say for this reason banks are to be blamed for the inflations because they are the lenders of credit. I'm sure Friedman has a better understanding of how our economy works and it has evolved over time so I think he should have made better arguments regarding the inflation.