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Milton Friedman on the great depression

Friedman's argument that the Depression was deepened by government and Federal Reserve failure, not by the failure of private enterprise.

9 passages in the archive5 checked against the source4 not yet checked
  1. The contraction from 1929 to 1933 was by far the most severe business-cycle contraction during the near-century of U.S. history we cover and it may well have been the most severe in the whole of U.S. history.
    A Monetary History of the United States
    Book, 1963, "The Great Contraction, 1929-1933" (1963), with Anna J. Schwartz
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  2. The elementary truth is that the Great Depression was produced by government mismanagement. It was not produced by the failure of private enterprise, it was produced by the failure of government to perform a function which had been assigned to it.
    Economic Myths and Public Opinion
    Column, 1976, The Alternative: An American Spectator, vol. 9
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  3. 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.
    Commanding Heights: Milton Friedman interview
    Interview, 2000, PBS, “The Great Depression,” interview conducted October 1, 2000
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  4. The great contraction is tragic testimony to the power of monetary policy—not, as Keynes and so many of his contemporaries believed, evidence of its impotence.
    The Role of Monetary Policy
    Journal article, 1968, American Economic Review 58, no. 1 (March 1968), pp. 1–17; reprinted in the House Banking and Currency Committee’s 1968 Compendium on Monetary Policy Guidelines and Federal Reserve Structure, pp. 214–224, p. 216 of the 1968 House reprint
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  5. It is ironic that the Great Depression was produced by government but was blamed on the private enterprise system.
    Why Government Is the Problem
    Journal article, 1993, Hoover Institution Press, Essays in Public Policy no. 39, p. 15
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  6. The Great Depression in the United States, far from being a sign of the inherent instability of the private enterprise system, is a testament to how much harm can be done by mistakes on the part of a few men when they wield vast power over the monetary system of a country.
    Capitalism and Freedom
    Book, 1962, Ch. 3 The Control of Money, p. 50
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  7. Just as banks all around the country were closing, the Fed raised the discount rate; that's the rate they charge for loans to banks. Bank failures consequently increased spectacularly. We might have had an economic downturn in the thirties anyway, but in the absence of the Federal Reserve System—with its enormous power to make a bad situation worse—it wouldn't have been anything like the scale we experienced.
    Interview with Milton Friedman
    Interview, 1973, Playboy
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  8. The first and most important lesson that history teaches about what monetary policy can do—and it is a lesson of the most profound importance—is that monetary policy can prevent money itself from being a major source of economic disturbance.
    The Role of Monetary Policy
    Journal article, 1968, American Economic Review 58, no. 1 (March 1968), pp. 1–17; reprinted in the House Banking and Currency Committee’s 1968 Compendium on Monetary Policy Guidelines and Federal Reserve Structure, pp. 214–224, p. 221 of the 1968 House reprint
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  9. Another occasion in U.S. history which strikingly illustrates this point is our experience from 1929 to 1933. Without doubt, the most serious mistake in the history of the Reserve System was its mismanagement of monetary matters during those years.
    Should There Be an Independent Monetary Authority?
    Journal article, 1962, In Search of a Monetary Constitution, ed. Leland B. Yeager (Harvard University Press, 1962), pp. 219–243; reprinted in the House Banking and Currency Committee’s 1968 Compendium on Monetary Policy Guidelines and Federal Reserve Structure, pp. 205–214, p. 211 of the 1968 House reprint
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