Sunday, November 19, 2006

The power of ideas

Lawrence Summers writes about Milton Friedman in this morning's NY Times and does a good job of putting Friedman's work into perspective: it changed the world of economics and politics.

Summers notes in passing that Friedman was "too cynical about the capacity of collective action to make people better off." Friedman might have said that Summers is a bit unrealistic in his expectations for politics.

Friday's WSJ included Friedman's "Why Money Matters". There will always be boom-bust cycles, primarily in response to abrupt technological changes. The actions of monetary authorities can make these worse (as in the 1930s) or not (as during the most recent downturn).

And, as Summers writes, most of the world has now gotten the message. It's enough to make one appreciate the power of ideas clearly presented.