Milton Friedman

Press, 12 May 1981, Page 16

Milton Friedman

Sir.—M. J. Stanley (May 9) asks how to explain growing unemployment. He implies that Milton Friedman's monetarily controlled economy would achieve full employment. In fact since Friedmanite policies were adopted in Britain and the United States the unemployment there has risen to 2.5 and 8 million respectively — and is snii rising. Conversely New Zealand between 1939 and 1967 had no unemployment whatever. This was because we were able to protect our balance of payments by import controls. Since the gradual abolition of import controls, controls of business activity by astronomical rates of interest, etc., have been used (unsuccessfully) to try to reduce imports to the level of export receipts. Economic growth was intentionally stopped, unemployment is the calculated concomitant of that policy and because of its failure to reduce imports below export revenue the policy has led to spiralling foreign debt—Yours, etc., W. ROSENBERG. May 10, 1981.