“Inflation is taxation without legislation.”
– Milton Friedman, comment on President Carter’s economic plans in 1976
In the postwar years, inflation was by far the most important and worrying issue facing developed economies. Economists struggled to explain it, and politicians struggled to control it. The battle against inflation would become the core of Friedman’s professional work, and occupy most of his working life. Having shown the flaws in Keynes’s analysis, the question facing him now was what to put in its place.
Friedman viewed inflation as a disease that corrupted and weakened an economy, and personal freedom too. Since “inflation is always and everywhere a ...