Money Mischief: Episodes in Monetary History

This book examines 10 different episodes in world history in which seemingly trivial policy choices towards money had profound, unexpected, and unforeseen consequences (usually very bad). They make enjoyable reading and are most educational.

The discussions are not all that technical and, to me, sparkle with wit and insight. This book can serve as a great introduction to how gold and silver money was abused, the effect that minting rights can have, how technology changes in mining precious metals caused a crisis of devaluation, what the heck bimetallism is and what the issues around it were (are), and most important, the risks of the kind of money we have (fiat money - because it is not tied explicitly to some kind of commodity and is therefore at the risk of somebody running the printing press too much). This is all great stuff. Enjoy!

There are several useful graphs and tables. Also, a reference list in the back can act as a bibliography for further reading.


A wonderful book!   January 2, 2000
David Maxwell
18 out of 21 found this review helpful

I am not an economist. This book opened my eyes to how the government influences the economic progress of us all through money supply. It is easy to read and understand. I highly recommend it to any lay people with an interest in why we are subject to economic catastrophies. I would be very interested in other readers views on this book, so please email me at dgmw@hotmail.com .


Friedmanýs Case Against the Government Is Crystal Clear   June 13, 2002
26 out of 33 found this review helpful

Imagine a grand winning case that is laid before the Supreme Court to change the course of modern life around the world. Friedman starts at the very beginnings of money and traces its evolution in copious detail. As proceedings finally reach the summation which is the final chapter: "Monetary Policy in a Fiat World." I see the court in a unanimous wonderment over the masterful job that has been done by Friedman. Well, the court required is public opinion--- a bit more cumbersome.

In any nation at any point in modern history, inflation comes from only one source the national government, not by some physical event, war or deficit spending. He details how the cause of inflation is growing the money supply faster than the output of goods and services. In his fabulous review of money he chronicles the centuries of price stability that came to an end with the creation of paper money. This fiat money is not backed by a precious metal and it has spread becoming the only remaining currency in the world. He does not argue for the return to a precious metal standard as some have misrepresented.

He provides details in country after country of how governments hallucinate that the citizens will not blame the government. Inflation directly benefits the government at the expense of the citizens. In addition to the impact on your liquid assets, the government debt is paid back or refinanced with far less valuable inflated dollars. He shows how tax cuts only giving back the tax increases that come from bracket creep in an inflationary environment. Finally. People and the financial markets quickly learn that interest rates have to compensate for inflation plus a real above inflation.

In current times this means government ten year bond rates of six to eight percent or more. The last ten years was the most ideal time in a century to control inflation. However, inflation was still three to five percent per year. The only logical assumption is that in the next ten years inflation is more likely to be near five percent or more. The historical real return required on government bonds is viewed as about three percent hence the total yield of six to eight percent. Currently, it is slightly below the range. Home mortgages will tend to be a couple percent higher than the government bond. In the simplest terms, had the Federal Reserve controlled inflation to zero, mortgage rates would be half what they are today. Since Greenspan went into the job committed to zero inflation like no other Fed Chairman, there will be no realistic basis for trusting in any potential Federal Reserve policy to eliminate inflation. It would take many years of proof before bond markets would believe any such policy. Because of money mischief we are stuck with high interest rates for a very long time. Thanks to our Federal Government and no one else. The blame could not be more clear.

Many governments have fallen including democracies over the matter of inflation. As USA citizens learn about inflation, it follows that political views will change. One of Friedman's most valuable contributions is the mathematical proof and imperial evidence collection that a little inflation does not help reduce unemployment. It worsens employment. Specifically, while 3% inflation is a smaller crime against the people than 10% inflation, it is still a crime with no redeeming virtue. This is not a matter of theory or political philosophy. Thanks largely to Friedman, the proof is in and the public debate should draw to a close.

The crowning moment of the book is when he details the observations that fiat money as a global money system is only a few decades old and it remains to be seen if governments can be harnessed by citizens to stop inflation. Friedman causes us to appreciate that there is only one place to draw the line. That is at zero inflation. The wreckage of inflation is not just in the aggregate economy, the low income and the retired. The mismanagement of money in the case of the USA by the Federal Reserve eventually reeks havoc in the securities markets. While Friedman is the Federal Reserves most articulate and worthy critic, his goal is to strengthen the spine of the Federal Reserve by educating the public and the government. After reading this book you are likely to see the senators that rant that "only they care about the unemployed and the Federal Reserve must now and always pump up the money supply" as at best badly misinformed.

To label Friedman a conservative or a libertarian economist as some reviewers do is to suggest that you can dismiss the authors views as not mainstream and suspect. This convention has clearly crossed over from the liberal major market media of modern times. It is truly dastardly to degrade the standing of Milton Friedman. His great works should command everyone's study and one should allow your views to be challenged simply on the merits of Friedman's work. A Nobel Prize is not awarded as the result of some game. Friedman's contributions to the modern world are profound.


Excellent   December 26, 2007
D. Star (Milwaukee, WI)
4 out of 5 found this review helpful

Milton Friedman is a great teacher because he has the rare ability to explain complicated subjects in clear understandable language. This book in particular will give the reader insight into the mysterious world of money. At the end you will understand money so well that when you watch CNBC you will start questioning the actions of the Federal Reserve. I highly recommend this book. Also, be sure to youtube and charlierose 'Milton Friendman' for some great videos. We have lost a great human. R.I.P.