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Milton Friedman on Monetary policy and the Federal Reserve

The organization of economic activity through voluntary exchange presumes that we have provided, through government, for the maintenance of law and order to prevent coercion of one individual by another, the enforcement of contracts voluntarily entered into, the definition of the meaning of property rights, the interpretation and enforcement of such rights, and the provision of a monetary framework.
Capitalism and Freedom
Book, 1962, Ch. 2 The Role of Government in a Free Society, p. 27
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  1. A government which maintained law and order, defined property rights, served as a means whereby we could modify property rights and other rules of the economic game, adjudicated disputes about the interpretation of the rules, enforced contracts, promoted competition, provided a monetary framework, engaged in activities to counter technical monopolies and to overcome neighborhood effects widely regarded as sufficiently important to justify government intervention, and which supplemented private charity and the private family in protecting the irresponsible, whether madman or child—such a government would clearly have important functions to perform. The consistent liberal is not an anarchist.
    Capitalism and Freedom
    Book, 1962, Ch. 2 The Role of Government in a Free Society, p. 34
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  2. Fundamentally, there are only two ways of coordinating the economic activities of millions. One is central direction involving the use of coercion—the technique of the army and of the modern totalitarian state. The other is voluntary co-operation of individuals—the technique of the market place.
    Capitalism and Freedom
    Book, 1962, Ch. 1 The Relation Between Economic Freedom and Political Freedom, pp. 12-13
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  3. The key insight of Adam Smith's Wealth of Nations is misleadingly simple: if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.
    Free to Choose
    Book, 1980, Ch. 1 "The Power of the Market", p. 13
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