The Little Milton Friedman

Lots of things have been told about Milton Friedman, but I didn't know Nicholas Kaldor, a famous Cambridge economist, likened him to Hitler.
About Kaldor (who also published a critique of monetarism) I report a personal witness by Robert Skidelsky, Keynes' most known biographer.
" I got to know him in the mid 1960s, but we only started talking about economics ten years later and went on till he died in 1986. Or rather, he went on talking about economics, and I went on listening. I have never met anyone with such a strong didactic stamina. And this was despite the fact that he frequently fell asleep during what I will call my ‘supervisions’, waking up a few moments later to continue his exposition at the exact point he had left off. Nicky had an apparently inexhaustible urge to put the world right in general, and me right in particular. He was then embarked on his last great battle against an evil sect of heretics called ‘monetarists’, led by someone he called ‘ little Milton Friedman’ – a reference to Friedman’s height, rather than his brain, though Nicky himself was by no means tall, if quite ample. The idea that the central bank could control the supply of money was so intellectually disreputable, Nicky told me, that it must hide a project too wicked to be openly avowed. Nicky had no doubt what this was: it was to smash the trade unions and restore the power of the bosses by creating mass unemployment. That is why Mrs. Thatcher and the Tories had converted to monetarism.

I didn’t buy all of this. But I knew that Keynes had been a monetarist before he became a Keynesian, and so I was often able to steer Nicky’s phillipics against monetarism towards a history of the Keynesian Revolution, through which he had lived, and whose battles he recalled in splendid detail. A surprising feature in someone so fervently convinced that the Keynesians were on the side of the angels was the marked respect in which he held Friedrich Hayek, who had been his professor at the LSE, in sharp contrast to ‘little Milton Friedman’ whom he once likened to Hitler."

Anyone lay about these controversies would really find them completely pointless.
Yet, to realize how today internal and external stability of a country is ruled through monetarism-inspired policy tools - means realizing how, eventually, "the ideas of economists and political philosophers are more powerful than commonly understood", as put by Keynes, adding also that "indeed the world is ruled by little else".

Milton Friedman's account of the 1930s Great Depression

Panic and economic crises

Panic is a particular type of anxiety disorder "diagnosed in people who experience spontaneous, seemingly out-of-the-blue panic attack and are preoccupied with the fear of it happening again", the Anxiety Disorder Association of America says in its website .

Then, panic coincides with intense fear showing up with such symptoms as a feeling of imminent danger, the need to escape, palpitations, sweating, trembling, short breath, depersonalization, a feeling of choking, a feeling and fear of losing control and the like.
The ADAA goes on informing about the existence of diverse treatment options, such as the behavior therapy, the cognitive therapy, the cognitive-behavior therapy, relaxation techniques and the medication by anti-depressants or anxiolytics.

All that said, what might we say about panic when economic crises burst? Is economic theory so well equipped to tell us why both panic and crisis arise out of a once well-faring country.

The answer is: so and so! For psychology of markets is as much a developed field for the analysis of economic variables and actors, as silent about reliable policy prescriptions. And economic analysis is still trapped in the observation object it strives to understand and explain.
The former aporia about policy prescriptions also seemed to hit various partitions of economic thinking, such as the Austrian school, the Neo-schumpeterian (evolutionary) economics, and the latest developments within the statistically flavoured modern economics .

Then, no pills for such panic attacks have been thought of, preventing the fear of a fact from turning in a fact, and nobody among professional economists and politicians seems well-meant to inquire the causes behind the symptoms so to treat them and, if not heal, at least worry about a possible solution.

Yet, back to diagnosis economic science may be more well-equipped to figure out with a capitalistic disorder, when it starts delving into the root causes first by a case-by-case approach, then by setting up a more articulated therapy resting on the cases tackled and resolved.

But, pathology and diagnosis are possible only in junction with physiology, that is the understanding of the nature of an economic body or living system.
The journey of economic theory into solving distribution issues by confronting with a world we would easily attribute to the Earth rather than to Mars or Venus or the acadamic cloister, is so long that it will take years to start understanding it.

And why subjective panic translates into collective, objective, overall crisis when things are not that bad and the economic system is not yet that sick -that's a great opportunity to let us take a step further in the comprehension of our world.

Exordium

Dear readers, aka informed friends and relatives, aka occasional web-surfers, aka unnamed people whom I give my web-blog address during a metro or elevator 1-minute conversation, that's a place where writing about crises -mainly economic and financial ones, yet likely to embrace psychological and biophysical ones, also- may evolve in questions, answers and topics confronted and change direction thanks to the the dialogue between me and you.

Some of you may be interested in economic analysis by a theoretical approach, some others are more business economists than academic ones, then very pragmatic and go-getter. Some of you think of economic theory as something so strange and tough to understand that they often end up distrusting every words pronounced by economists or borrowed by those political leaders anxious of showing facts through statistical figures.

There's also someone among you who never joined a conversation between economists and fear being involved in a conversation where people presume having all the necessary knowledge over individuals' behaviour more than psychologists or priests.

For all of you, whether you study or work, you build houses or design them, you spend most of your day fronting a personal computer, talking with people, or observing the nature, I hope something useful may result from all these words on crises.

A word of hope and commitment: whether it's economic and financial, or psychological or love-related, we ought to stand in crisis the least possible, not escape from reality- indeed full of crises- but to live in it the better we can.