The Monetarists: The Making of the Chicago Monetary Tradition, 1927–1960 by George S. Tavlas
本书研究芝加哥大学货币经济学传统从1920年代末到1950年代末的演变，旨在解决关于是否存在独特芝加哥货币传统的长期争议，并证明该传统对弗里德曼货币主义思想的直接影响。
This book is about the evolution of the University of Chicago tradition of monetary economics, from its origins in the late 1920s to its transformation into Milton Friedman's “monetarism” in the late 1950s. It marks the culmination of years of research by George Tavlas—alternate to the governor of the Bank of Greece on the European Central Bank Governing Council and distinguished visiting fellow at the Hoover Institution, Stanford University—who started investigating this theme in the 1970s. The end result is a first-rank study in the history of economics, to be read by any scholar interested in the evolution of monetary and macroeconomic thinking.The book's purpose is to settle the long-running controversy over the existence and uniqueness of a Chicago monetary tradition, which arose following the publication of Milton Friedman's essay “The Quantity Theory of Money: A Restatement” in 1956 (Friedman 1956). Writing at a time when the Keynesian influence on economics was at its height and fiscal policy was regarded as all that mattered, Friedman sought to reaffirm the importance of money. In doing so, he claimed to convey the “flavor” of a Chicago oral tradition going back to the 1930s and 1940s, which allowed the quantity theory to be preserved in this academic center. Don Patinkin (1969), however, demonstrated that the quantity theory as put forward by Friedman, using a portfolio approach to the demand for money, had little to do with that taught at Chicago in the 1930s, which was expressed in terms of Irving Fisher's equation of exchange, MV = PT. This led Harry Johnson (1971) to accuse Friedman of having “invented” the notion of a Chicago tradition to lend strength to his counterattack on the Keynesian revolution.Many later works comparing Friedman's views on money—for example, his criticism of the Fed's role in the Great Depression, his proposal for a money growth rule, or his advocacy of open-market operations as a monetary-policy instrument—with those to be found in the 1930s literature have shown that they actually had more antecedents among non-Chicago economists, like Lauchlin Currie or Clark Warburton, than among Chicagoans. There has developed a prevailing consensus, Tavlas explains, that no monetary tradition specific to Chicago ever existed; or that, even if such a tradition existed, it could not be accounted as a direct influence on Friedman's monetarist views. The object of the book is to “abrogate” this consensus by showing that there was a Chicago monetary tradition, one that was unique in many respects and that did influence Friedman's monetary thinking in a significant way (xi).Why do the book's conclusions diverge from this consensus? As its author explains, whereas previous studies had mostly compared the views of Friedman with those of earlier Chicago economists, in order to search for forerunners of monetarist ideas—“an approach that is comparative static in essence” (xii)—this book focuses on the evolution of the Chicago monetary tradition over time. To this end, Tavlas broadens the cross-section of the 1930s Chicagoans under study: in addition to Henry Simons and Jacob Viner, who had been the main focus of previous research, he brings Paul Douglas, Frank Knight, Aaron Director, Lloyd Mints, and Garfield Cox into the picture. This allows him, on the one hand, to better define what the Chicago tradition was, as well as what it was not; and, on the other, to show how Friedman's interactions with those economists just mentioned who were still active in the late 1940s and early 1950s (Mints and Director in particular) accounted for a direct influence of this tradition on him.What was the original Chicago monetary tradition about? This is described in detail and with great clarity in the book. The story centers on six Chicago economists—Douglas, Knight, Director, Simons, Mints, and Cox—who, in the 1930s, held very similar views on monetary matters and referred to themselves collectively as “The Group.” Completing the account of the Chicago monetary tradition given by Patinkin (1969), Tavlas summarizes The Group's core monetary beliefs in eight propositions: (1) the use of the Fisherine equation of exchange, MV + M′V′ = PT, as a theoretical framework—in which M and V designate the quantity and velocity of circulation of cash, M′ and V′, those of demand deposits, P, the price level, and T, the physical volume of trade—and the views (2) that the economic system is inherently unstable, due in particular to autonomous and cumulative changes in V; (3) that the instability in V is greatly exacerbated by the existence of fractional-reserve banking, affecting also M, M′, and V′; (4) that countercyclical changes in M are needed to bring stability; (5) that the most effective way for the government to implement changes in M is through the channel of fiscal deficits (or surpluses); (6) that the long-run stabilization of the price level requires following a monetary rule, expressed in terms of a policy instrument, so as to reduce monetary-policy uncertainty; (7) that 100% reserves should be required on demand deposits, mainly to prevent cyclical monetary changes; and (8) that the gold standard should be abandoned and replaced with a flexible exchange-rate system (pp. 6–7, 25). Taken as a whole, this set of propositions rendered the Chicago monetary tradition “unique” (27).The views of Viner are also discussed at length, mainly to show that, because of their many divergences with those of The Group, they were not representative of the Chicago tradition: Viner, in contrast to his colleagues, remained attached to the gold standard, believed in the efficacy of monetary measures operating through the banking system, and rejected the 100% reserve idea. He was also the only Chicagoan, in the 1930s, to hold the Federal Reserve largely responsible for the severity of the Great Depression.Friedman's monetary views at the time of his 1956 essay, Tavlas argues, had relatively little in common with the eight propositions and can hardly be related to the earlier Chicago tradition if one overlooks the latter's evolution over time. Accounting for this evolution is one of the great achievements of the book. The members of The Group, Tavlas shows, kept supporting these eight propositions with remarkable continuity from the early 1930s to the mid-1940s. By the time Friedman, who returned to Chicago as a teacher in 1946, made monetary economics his primary subject, he was sharing this very set of beliefs. In 1948, Tavlas writes, “his analytic and policy framework was overwhelmingly—and down to the smallest detail—straight out of the Simons et al. monetary playbook. . . . Friedman's thinking on money was part of the Chicago monetary tradition” (313).The mid-1940s, however, were also a time at which this tradition was evolving. Mints, in particular, who had become the most active remaining member of The Group on money matters, started in 1945 to use a portfolio theory of the demand for money (as Knight had done earlier), alternatively to the Fisherine equation of exchange, as a basis for monetary reasoning. His views regarding the respective roles of M and V in the cycle, the responsibility of the Fed in the Great Depression, and the efficacy of open-market operations were also evolving in a way that foreshadowed Friedman's later monetarist thinking.Friedman's views on money, Tavlas explains, underwent important modifications between 1948 and 1951, owing to three different factors: his interactions at Chicago with Mints and Director, whose own views were also changing at the time; his correspondence with Clark Warburton, who exerted a definite influence on his thought; and his empirical work on monetary statistics, carried out with Anna Schwartz. As of 1951, Friedman now held, in contrast with the earlier Chicago tradition, that changes in M, rather than in V, drove the cycle; that discretionary policy by the Fed, more than the fractional-reserve banking system, was the “big, bad actor” destabilizing the economy (376); and that open-market operations, rather than fiscal deficits or surpluses, were to be favored as a monetary policy instrument.Tavlas conclusively argues that, once this whole evolutionary process is taken into account, it becomes clear that there existed a Chicago monetary tradition that was unique in many respects and that did exert a significant influence on Friedman's early monetary views—although Friedman's later references to that tradition, lacking the rigorous treatment of a doctrinal historian (which, as Tavlas reminds us, Friedman was not), were partly mistaken. Writing in 1956, he may have thought that the portfolio theory of money demand, for example, which started to be used by Knight and Mints in their later writings, had been part of the earlier Chicago theoretical framework, whereas in fact it had not.The book, well written and rich in detail, using both published and unpublished material, sheds much light on these matters. It provides the first comprehensive account of what the Chicago monetary tradition was, bringing into the picture several economists whose works have seldom been discussed in the secondary literature. Not limited to the University of Chicago precincts, the story also takes the reader back, for example, to the nineteenth-century currency school–banking school controversy, showing how the 1844 Bank of England Charter Act provided an inspiration for the Chicago Plan of banking reform. It also provides numerous illustrations of the Chicagoans’ political activism, from their practice of circulating collectively authored memoranda in the 1930s, to the decisive role played by Douglas, as a US senator, in the conclusion of the 1951 “accord” that made the Fed independent from the Treasury—an episode constituting “the first example of the postwar influence of the Chicago tradition on monetary policy” (466).This brilliant, powerful work should settle for good the controversy over the Chicago monetary tradition and, more importantly perhaps, lead to the (re)discovery of a whole line of economists whose monetary thinking was sufficiently sophisticated, and solidly grounded, to allow them to resist the dominance of Keynesian economics. As Tavlas explains, by holding a monetary explanation of the need for fiscal deficits—which, in a depression, were required to allow for money creation by the banking system—the Chicagoans had no need to resort to Keynesian theory to justify such a policy. While their originality in this regard should not be overstated, only at Chicago could be found “the critical mass, in quality and numbers, necessary for the intergenerational transmission of ideological attitudes” (135). This allowed their monetary ideas to find their way into the 1940s and 1950s, providing “a launching pad for Friedman's monetarist counter-revolution” (24)—however much the latter, as all economists agree, came to depart from the earlier Chicago tradition.