THE "ART" OF ECONOMICS
Friedman taught them to insist — that government intervention was always bad, always made things worse[/url]
Frankly, I don't think Friedman taught them something that is intrinsic to the Business World. A businessman or woman is born with an instinct that they have the right to pursue customers without constraint. Nice thought, but it aint necessarily true.
Factually, monetaris is part myth, part truth. The truth part being that a market-economy has rules and when one is hell-bent to make a lotta muney, they don't like rules.
Rules are there nonetheless for a reason. Which economists often call a "level playing field", and which means that a market-economy must be competitive. That is, open to both New Entry and also Exit. A market-economy renews itself. Except, of course, when markets stagnate due to insufficient competition. Which is often, because we have allowed (this past half century) for far too much Market Consolidation. Bu means of buy-outs and corporate consolidations. A playing field went from dozens to just three in a matter of a decade.
And Example: I recall that the Information Technology market was once called "IBM and the Seven Dwarfs". That is, IBM plus Burroughs, Sperry Rand (formerly Remington Rand), Control Data, Honeywell, General Electric, RCA and NCR. Today, not even IBM sells more software services than mainframes because the IT-market morphed with the advent of the Internet.
Thus a key intrinsic attribute of markets is that they "morph", meaning that - with the hectic advance of technologies - markets become "old" quicker than in the past. In fact, some open-and-close (with a profit) in a period of six-months to a year. Why? Because of the Internet, where Customer Acquisition is much, much quicker than in the past - when a company needed years to obtain suitable recognition in the marketplace by customers. And with the rampant birth of new Internet-technologies, "out-of-date" products or services happen much, much quicker than before.
Monetarism, per se, is simply controlling the Supply of Money, based upon the assumption that the more money that is available, the more will Customer Propensity to Spend be enhanced. Frankly, that definition should never have convinced anyone with at EC101 course under their belt.
After all, the Heart of any market is, precisely, Customer Propensity to Spend. If they have neither the means nor the money, their "propensity" is close to zero. So, what makes for said Propensity to Spend to accrue and motivate consumption?
Unfortunately Economics Books don't spend much time on the subject, because Economic Science treats propensity as a "given". Which is part right, and mostly wrong.
In this last Great Recession we were reminded that, though 10% of the population was unemployed and thus disinclined to spend on whatever money UI was affording them, they cut back sharply on spending.
So, clearly, an important criteria, and far-more important than the Supply of Money was Consumer Psychology - which, frankly, does not enter much into the realm of Economic Sciences.
And it should, because it is the foundation stone of the Art of Economics. That is, the reasons why people spend and stop spending, and all the points in between ...
