Milton Friedman

Press, 13 May 1981, Page 20

Milton Friedman

Sir,—J. Sharp has been misled if he believes that payments into overdraft accounts as repayments provide money.

They do not. They cancel money which has been created by the trading bank. It has no further existence. A minus total in the accounts has been reduced to a lower minus total and the difference has vanished. When people understand this and something of the various agencies who create money the bubble will burst. The control of money will once again become the right of the people and their government and not the plaything of private agencies working for the benefit of the small groups of private individuals who control them. This is not control in the interests of the country but control for the selfish aims of Milton Friedman, and the institutions he represents.—Yours, etc.,

JIM TIMINGS. May 11, 1981.

Sir,—The coffin of the British economy is closed by three nails: the E.E.C., turnover tax and “Friedmanism.” As indicated correctly in one of your editorials, turnover tax (V.A.T.) inflates prices and requires an army of tax inspectors. In Britain, so I understand, V.A.T. only just pays the cost of its administration. Friedman’s vicious “user-pays,” or rather “pays” sweated-labour economy does not work in a demo-cratically-balanced . society simply because the sweated labour refuses to be sweated. As indicated clearly by recent events in Britain the social and economic costs of Friedman’s ideas are greater than the alleged profit of their implementation. Even in totalitarian. Poland, labour no longer accepts being sweated. Whilst I hope Mr. Friedman enjoyed New Zealand, I hope New Zealand does not later have cause to regret the monetary philosophies of this persuasive pedagogue.—Yours, etc.. JAMES FINLAYSON. May 5, 1981.

Sir, — The advantages of the free market with no government controls have been demonstrated many times. Take the on-going liquor “price-wars.” The free competition for sales leads to low prices and good quick service, what is wrong with that? Or the competition between shops and supermarkets. The shopper can only benefit from the many sales and discounts offered. The present case of apple prices also demonstrates how free competition works. So what if some shops have raised their prices now that controls have been lifted. Anyone who does not wish to pay those prices will shop where apples are cheaper. Anyone who advertises apples at a lower price will certainly do very well. Of course, we are not so lucky when it comes to electricity, or television, or air and rail travel: Government monopolies mean we pay what we're told to pay, or lump it. —

Yours, etc., BARRY MILLER May 6, 1981.