Money Mischief, by Milton Friedman
Milton Friedman’s latest book comes at a pivotal moment. Around the globe, monetary systems are being fundamentally restructured. The European Community is moving toward a single currency, expending considerable political capital to achieve that goal. Third-world and post-Communist governments from Argentina to Ukraine are experimenting with a diverse array of reforms.
Yet Money Mischief, subtitled “Episodes in Monetary History,” is at least as concerned with the past as with the present. Much of the book deals with events of the late 19th and early 20th centuries. For instance, Friedman examines the Coinage Act of 1873, which placed the U.S. dollar on a gold standard and effectively denied a monetary role to silver. Analyzing the consequences of that move, he explores what might have occurred if different policies had been followed. This leads to a broader discussion of the relative virtues of monometallism, in which a currency is linked to either gold or silver, and bimetallism, in which the money is backed by both. Friedman also looks at the significance of the development, late in the last century, of a new technique for extracting gold from low-grade ore. Moving forward several decades, he speculates about the effects of the silver-purchase program initiated by the Roosevelt administration in the early 1930′s.
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