Free to Choose: A Personal Statement

by Milton Friedman

THE CURE FOR INFLATION The cure for inflation is simple to state but hard to implement. Just as an excessive increase in the quantity of money is the one and only important cause of inflation, so a reduction in the rate of monetary growth is the one and only cure for inflation. The problem is not one of knowing what to do. That is easy enough. Government must increase the quantity of money less rapidly. The problem is to have the political will to take the measures necessary. Once the inflationary disease is in an advanced state, the cure takes a long time and has painful side effects. Two medical analogies suggest the problem. One is about a young man who had Buerger’s disease, a disease that interrupts the blood supply and can lead to gangrene. The young man was losing fingers and toes. The cure was simple to state: stop smoking. The young man did not have the will to do so; his addiction to tobacco was simply too great. His disease was in one sense curable, in another not. A more instructive analogy is between inflation and alcoholism. When the alcoholic starts drinking, the good effects come first; the bad effects only come the next morning when he wakes up with a hangover—and often cannot resist easing the hangover by taking “the hair of the dog that bit him.”

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