Skip to content
MiltonFriedman.org

Milton Friedman on Money, banking, and the gold standard

The Federal Reserve Board and the Treasury Department recently—though, to their credit, reluctantly—announced that they intend to gamble on a large scale with your money and mine. Of course, that is not how the official announcement phrased it. It spoke of “intervention” to support the dollar and prevent “disorderly” markets. But a spade is a spade even if it is called an unearthing implement. And gambling is gambling even if it is called “intervention.”

Context. From a 1978 column written after the Federal Reserve and the Treasury announced in early January 1978 that they would intervene in the foreign-exchange markets to support the falling dollar.

Back to the Gaming Table
Column, 1978, A column of early 1978, reprinted in the Congressional Record, Senate, February 7, 1978, p. 2590, introduced by Senator William Proxmire among “articles by Professors Friedman, Okun, and Schmidt” under the heading “Letting the Dollar Float”. The reprint names no publication and gives no issue date; the column refers to writing “in this space” in 1973, which marks it as one of his regular columns, Congressional Record, February 7, 1978, p. 2590
Checked against the sourceRead the original

Where this comes from

Checked against the sourceThe wording was checked against the work itself.

Cite this passage

Milton Friedman, “Back to the Gaming Table” (A column of early 1978, reprinted in the Congressional Record, Senate, February 7, 1978, p. 2590, introduced by Senator William Proxmire among “articles by Professors Friedman, Okun, and Schmidt” under the heading “Letting the Dollar Float”. The reprint names no publication and gives no issue date; the column refers to writing “in this space” in 1973, which marks it as one of his regular columns, 1978), Congressional Record, February 7, 1978, p. 2590. https://miltonfriedman.org/quotes/gambling-is-gambling-even-if-called-intervention-1978

Quoted for commentary and research. Rights in the underlying work remain with its rights holder, so cite the work itself, not only this page.

Topics

He also said

  1. The announced purpose of the official gambling is to keep private speculators from driving the price of the dollar below the level justified by fundamental economic factors—to offset, as the Fed and Treasury would put it, “destabilizing” speculation. How can we judge whether the gamble succeeds? In general, there is a simple test: whether it makes or loses money.

    Context. From a 1978 column written after the Federal Reserve and the Treasury announced in early January 1978 that they would intervene in the foreign-exchange markets to support the falling dollar.

    Back to the Gaming Table
    Column, 1978, A column of early 1978, reprinted in the Congressional Record, Senate, February 7, 1978, p. 2590, introduced by Senator William Proxmire among “articles by Professors Friedman, Okun, and Schmidt” under the heading “Letting the Dollar Float”. The reprint names no publication and gives no issue date; the column refers to writing “in this space” in 1973, which marks it as one of his regular columns, Congressional Record, February 7, 1978, p. 2590
    Checked against the sourceRead the original
  2. The Federal Reserve system had been established to prevent what actually happened. It was set up to avoid a situation in which you would have to close down banks, in which you would have a banking crisis. And yet, under the Federal Reserve system, you had the worst banking crisis in the history of the United States. There's no other example I can think of, of a government measure which produced so clearly the opposite of the results that were intended.

    Context. Asked what actually caused the Great Depression, in a PBS interview for the series Commanding Heights. He had just distinguished the ordinary recession of 1929 from its conversion into a major depression by bad monetary policy.

    Commanding Heights: Milton Friedman interview
    Interview, 2000, PBS, “The Great Depression,” interview conducted October 1, 2000
    Checked against the sourceRead the transcript
  3. The changes in Federal Reserve policy announced by chairman Paul Volcker on Saturday evening, Oct. 6, produced a turbulent week in the financial markets of the world. Yet it will be many months, perhaps even years, before the real meaning of those changes is fully revealed. Perhaps that very uncertainty produced the turmoil.

    Context. From a Newsweek column of October 1979 on the change in Federal Reserve operating procedures that Chairman Paul Volcker announced on Saturday, October 6, 1979.

    Has the Fed Changed Course?
    Column, 1979, Newsweek (October 1979); reprinted in the Congressional Record, House, November 2, 1979, pp. 30902 to 30903, introduced by Representative Henry S. Reuss of Wisconsin, chairman of the House Banking Committee, together with Friedman’s letter to him of October 26, 1979, which encloses “a copy of a Newsweek column which I wrote commenting on Chairman Volcker’s statement of October 6.” The reprint gives no issue date; the column describes the week after October 6, 1979, and the letter enclosing it is dated October 26, so it ran in between, Congressional Record, November 2, 1979, pp. 30902 to 30903
    Checked against the sourceRead the original

Think this quote is wrong, misattributed, or missing context? Report it and it gets fixed, not argued with.