Have the tenets of Naomi Klein's book, THE SHOCK DOCTRINE, affected Americans view of the world and how does her work fir in with our age and memories of America? This article begins to explore the shifting paradigms in America's social and political education. The article looks at the works of sociologist William Cecil Headrick and the writings of John Grisham as well.
My older brother majored in business in the early 1980s. His professors forced his classes to watch a whole series of videos by the monetarist, Milton Friedman (and various generations of cronies from the Chicago School of Economics). My brother argued and argued with his professors about the blatant propaganda and poor economic development offered by Friedman as a core character in the theory of doing business in America.
"Friedman's basic assertion [was] that money supply and monetary policy is (almost) all that matters for nominal output fluctuations."
http://homepage.newschool.edu/het//essays/monetarism/friedmanchicago.htm
This popular monetarist model had already reached its pinnacle in America in the 1970s and helped lead to 20% interest rates across the land in the year before Jimmy Carter was elected president. However, the New Classicals Economic Theorists from the Chicago School, who learned from such monetarist foibles came to be in charge of American national policy in the 1980s and eventually resurfaced as both neo-liberals and neo-cons in the subsequent decades. Likewise, a subsequent turn towards neo-classical political-economic-inspired leadership soon took power globally Finally, in the last decade, all of this misguided theory and practices combined with the bottomless spending pit of a 3-front war on terrorism--and led to the greatest global economic collapse (in 2007-2010) seen in over 3/4 of a century.
MONETARISM & NEO-CLASSICAL ECONOMICS
It is important to note that to "the lay public, Milton Friedman is best known for his political views." Ronald Reagan coopted the national drive of the monetarists of his era. "Its well-known features are captured succinctly in his [Friedman's] words: "The basic long-run objectives, shared, I am sure by most economists, are political freedom, economic efficiency and substantial equality of economic power"I believe and at this stage agreement will be far less widespread that all three objectives can best be realized by relying, as far as possible, on a market mechanism within a "competitive order' to organize the utilization of economic resources." (M. Friedman, 1948)
One website on the philosophy of economics (from the New School) answers the question: "What are the main features of Friedman's "Monetarism"? The central ones can be listed as follows:
http://homepage.newschool.edu/het//essays/monetarism/friedmanchicago.htm
(1) monetarist transmission mechanism: urging that agents dispose of excess money supply by purchasing goods rather than bonds.
(2) stability of money demand: belief that, in practice, the demand for money is a stable function of wealth, prices, price changes and interest.
(3) money-to-income causality: that movements in the money supply have been the primary cause of business fluctuations and that movements in aggregate demand for goods have relatively little impact.
(4) natural rate of unemployment hypothesis: belief that there exists a unique rate of unemployment that is associated with non-accelerating inflation and that, in the long run, the economy will settle at such an unemployment rate.
(5) superiority of monetary policy rules: assertion that monetary policy is much more effective than fiscal policy, recommendation that Central Banks target money aggregates rather than interest rates, and that following a steady money supply growth rule is, at least in the long run, better than a discretionary, counter-cyclical monetary policy.
According to the New School authors, "There have been effectively two distinct stages of "Monetarism' one surrounding the money-income causality debate that raged roughly within the 1960s and another stage surrounding the Phillips Curve and the acceleration hypothesis which was dominant in the 1970s. Both of them stem from two extraordinary pieces by Milton Friedman one published in 1956, another in 1968. Although superficially distinct, both these contributions are intimately related within the research program of Monetarism."
In addition, the New School writer notes, "At the policy level, Monetarism had its age of glory in the late 1970s and early 1980s. Two policy moves that have been traced to Monetarism were the abandonment of interest rate targets and the adoption of money supply targets by many Central Banks in the late 1970s and, most infamously, the attempted disinflations via monetary policy around the same time in the United States and the United Kingdom. The largely disastrous results of these policy experiments did much to discredit strict Monetarist doctrine among economic policy-makers, but certain aspects of it most notably the natural rate hypothesis and the money supply-inflation link remain standard beliefs even today."
