To me to be perhaps the most important contribution to economics since the time of adam smith. And this is what hayek had to say. About knowledge he said in economics, theres a problem of the division of knowledge. Which is quite analogous, too. And at least as important as the problem of the division of labor put forward by adam smith. But while the latter has been one of the main subjects of investigation ever since the beginning of our science. The former has been as completely neglected. Although it seems to me to be the really central problem of economics. As a social science the problem we pretend to solve is how the spontaneous interaction of a number of people each only possessing bits of knowledge. Bring about a state of affairs that corresponds to equilibrium. How can we determine what Economic Production should be when knowledge is divided among all of the millions and tens of millions hundreds of millions billions of people in the world. How do we accommodate divided knowledge the answer of socialists at the time as weve discussed and well discuss further today was will government can plan it can make all those decisions. But even if you could entrust government with that power, how would it know what to produce thats the crucial problem. How do you utilize divided knowledge in a society . Heres what hayek also said along these lines. This is from his 1936 sa economics and knowledge. Economics has come nearer than any other social science to an answer to that central question of all social sciences. How can the combination of fragments of knowledge existing in different minds . Bring about results which if they were to be brought about deliberately would require a knowledge on the part of the directing mind. Which no Single Person can possess. Thats the crucial issue. No one individual has this great knowledge. That exists in a fragmented form among all the members of humankind that are part of a market order. No one has that knowledge. And that was what hayek put forward as the great obstacle to socialism. Was that government simply couldnt presume that it would have this ability to concentrate knowledge in a planner who would determine how much of different goods and services should be produced. Thats not the answer. Thats the problem. No one has that knowledge. So how do you create a system in which diverse and fragmented knowledge is utilized . And thats what high ex answer was he says that to show that the spontaneous actions of individuals will under conditions, which we can define bring about a distribution of resources, which can be understood as if it were made according to a single plan, although nobody has planned it. Is the goal of economics so thats precisely what the price profit and private property system. Does it is it allows fragmented and decentralized knowledge to be utilized . Freely fluctuating prices allow for the registration and the communication of the relative supply and demand of all the goods and services that are being produced in economy. Thats the economic problem. Thats what freely floating prices and profits do is that prices register supply and demand and profits direct resources to those who all Things Considered tend to utilize them more effectively than others and then private property is necessary in order to enable the price system and and the profit system to have any sort of effectiveness. So its a brilliant argument and it addressed what had been the primary concern of socialism to that time. The argument of socialism. Was that only if individuals were altruistic enough that then socialism would be possible. The reason why people argue against socialism was socialism was that well, people arent ethical enough to practice concern for others or to have a community of goods hayeks argument was that thats not the issue at all. You could be having a community of saints. Everyone could be completely altruistic. But if you dont have a way to register relative supply and demand then you really wont have rational Economic Activity. And whats fascinating is that when hike put forward these ideas primarily in the 1930s. They werent immediately persuasive and weve seen that throughout this quarter that when ideas are originally enunciated. Theyre not necessarily greeted with universal assent. But over time reality proved to be the greatest teacher of all and as weve discussed when you considered the efficiency of different economies of the United States economy versus the soviet economy this economy of the soviet union or if you looked even a better example east germany versus west germany or north korea versus south korea where you have different systems of Economic Activity, and then you see the results of those systems over years and decades it quickly became clear that a system of free market capitalism is more productive than a system of government control and ironically as weve weve discussed earlier in the quarter the economic productivity and efficiency of socialism in the sense of government control of the economy is exactly what socialist thought was their strongest argument the social them would be more productive than capitalism, but that proved not to be the case. As well discuss a little bit later in class Milton Friedmans work in particular reconceptualizing the Great Depression and putting forward. Its monitor monetary source in in the form of an inadequate policy by the Federal Reserve board in the 1930s in the early 1930s. Was the primary cause of the Great Depression not some inevitable failures of capitalism that had to be accommodated by a greatly increased Government Role in the economy so it took time but but high ex ideas ultimately prevailed and as i said, it seems to me that they are the the fundamental macroeconomic contribution of the 20th century the issue throughout much of the 20th century was will the future of economics be a more command economy direction more government control, or will it be more market a more marketbased system and for most of the 20th century until the 1980s the general view was that the future was going to be more of a socialist system of more government control, but then as a result of the circumstances of the cups of communism Eastern Europe and then in the soviet union and the continuing and continual productivity of a free market system the paradigm of government control quickly shifted and at this point in time the perspective that theres an Important Role for the market in society is as if not more established than the view of earlier decades in the 20th century that the future would be in some sort of some sort of socialist or command economy and direction what i would note too, is that as i stress. Yeah stone. You want to yeah. So hayek did a lot with the socialist calculation question. How much of what he did was built on mises and bombauerks work on the socialist calculation and how much of it was his own extrapolation. Thats a really good question to what extent was hayek influenced by his predecessors in among austrian economists in particular eugene von. Bonba burke and ludwig von mises and as weve indicated the Austrian School of economics was a very important strand of economic theory during the later 1800s and early 1900s together with William Stanley jevons and Alfred Marshall and england and leon. Walrus and alfredo peretto in in switzerland. And carl menger was originally the leading austrian economist. And i would say that hayek was very much influenced by his austrian economic predecessors. Particularly mises mises is really the one who after world war one and all of a sudden the soviet union existed in in Eastern Europe, and thered been the collapse of governments throughout central and Eastern Europe. There were all so for a time other socialist states that were set up in parts and areas of Eastern Europe that didnt last the soviet union was the only regime that lasted and it became a practical question. Socialism really only became an issue after the establishment of the soviet union in 1917 before that. It was all theory there wasnt any socialist country that was attempting to run the means of production and so misus asked the question. Well, how is it going to work . How are they going to know what to produce if you dont have the the market mechanism then you dont have a rational economy. So i think that particularly that mises influence take a great deal hayek, however, and that provides a segue to our next subject is that hayek . Never considered himself to be a pure misessian and i think that sometimes his thought is an entirely understood for that reason hayek really did think that there was a reasonable place for government in society and it wasnt a comprehensive place or an allencompassing place as socialists believed and he certainly believe that it would be better if government could be provided at a local level rather than at a National Level if there could be private institutions as well as government institutions to dress education and health and welfare, but at the same time he recognized that there is a vital role for government to play both in providing social services and in creating this framework of the market. How do we define Property Rights . How do we enforce Property Rights what institutions are necessary to allow a market to operate effectively as weve seen in our discussion of the Great Depression the absence of federal deposit insurance in the United States led to the collapse of thousands of banks in the early 1930s because of the collapse of the banks the money supply contracted very significantly. There was very significant deflation a great deal of unemployment. Well since the 1930s and the deal of franklin roosevelt, theres been federal deposit insurance in the United States. So individuals dont have to withdraw their funds from a bank if theres some sort of a banking crisis there, isnt that fear of losing of losing your money and therefore we havent had any sort of significant banking crisis since the 1930s such as existed before federal deposit insurance. Well as federal deposit insurance an interference with the market, or does it make the market move operate more effectively and high x argument was that government has an essential role to play both in social services and in establishing the framework for the market. So this is what he had to say. Theres nothing in the basic and this is from his 1944 work the road to surfed him through which he probably became most well known there is nothing in the basic principles of classical liberalism to make it a stationary creed the fundamental principle that in the ordering of our affairs. We should make as much use as possible of the spontaneous forces of society to incourage competition and a Free Exchange goods and services. And to resort as little as possible to coercion, his object of opposition was government control of the economy, not of government providing certain Welfare Services for individuals and government establishing the framework institutions within which this spontaneous action of individuals operates. We want to resort as little as possible to coercion that that principle is capable of an infinite variety of applications. Theres all the difference between deliberately creating a system. Within which competition will work as beneficially as possible and passively accepting institutions as they are. Probably nothing has done so much harm to the liberal cause as the wooden insistence on certain rough rules of thumb above all the principle of laissezfaire. So hayek was in many respects. No dogmatic libertarian and andesis was in terms of jesus really thought theres almost no positive role for government. I thought no government has to create the framework of institutions for the market and as well. He thought there was a significant role for government to play in in those in in the society and providing services. So, he he provided a description of socialism, and i think its important to understand. What hayek meant by socialism because he had a very particular meaning today. We tend to think of a socialist as someone like bernie sanders. They want to see a lot of government that really wasnt. High exdefinition of government he was against a lot of government that thats not the point, but he didnt think it was the same thing as socialism what he meant by socialism was the type of Economic System that existed in the soviet union where government ran the whole economy and made all of the economic decisions as we discussed in our and our in our class on marks that marx really felt that government could do just about everything in the society and in the economy government owned all the land it made all the Investment Decisions it employed most of the people in the society and there was a very limited role for a private system. That wasnt high excuse. Yeah. Weve got a couple questions down here. So it probably want the boom come down again, so eric do you want to ask the first question . Sure, so youre talking about sort of the nuance that of hayeks work in his opinion today. This is sort of seen like this work is seen as like sort of the foundation of the or like the basis of capitalism and why its inefficient system. Do you feel like his more nuanced positions about about like the limitations of what the market can do . So for instance like a prices transmit knowledge throughout a society, but it doesnt transmit it all equally so it may transmit the market for phones or something equally, but when it comes down to necessity goods say like food or housing, it doesnt appropriately transmit those my personal need for housing like does not it cannot be described by my income if im very low income. I cant translate that information how badly i need that to the market. So in your opinion do you feel like a lot of the more nuanced parts of his of his work have been lost and sort of been coopted for to the purposes of say libertarianism or free market capitalism. I do i think thats a good question. Is that has hayeks message largely or insignificant part. Perhaps better not been fully understood and and i agree with that in terms of he did have a much more nuanced perspective and he would not be whats today considered to be a hardcore libertarian although again at the time. When it looked like the whole world was moving towards socialism in the sense of government control of most of the economy that nuance wasnt quite as wasnt wasnt quite as adequately appreciated as it should have been and i felt that a good article would be Something Like or title for a book would be completing the hayekian revolution and then trying to talk about his ideas in the area of in the area of government more generally. Distinct from his views against socialism and again, his definition of socialism is very clear in road to serfdom and its rather limited Socialism Means the abolition of private enterprise of private ownership of the means of production and the creation of a plan economy in which the entrepreneur working for profit is replaced by a Central Planning body. So high x view really was that thats what he meant by socialism. Thats what he was against and that message has to some extent i think been forgotten or lost. So i think its really important that we return to the original hayek and consider his whole view and as i said to me, this is also very consistent with the view of Adam Smith Adam smith. Primarily his greatest concern was he didnt he was against mercantile heism. He didnt think government should run the economy. He again, he thought government should be smaller rather than larger. He thought there should be a large private sector including in the provision of social services, but he wasnt theres no place for government. Thats also similar to hayeks view thats different than contemporary libertarians, and i think that the high ex smith position is in many senses much stronger than the contemporary libertarian position eli. Yeah. Do have a comment question . So you talked about hayek and his adversion aversion to big government, but i was wondering theres specific instances where you said social services, he would permit social services. So i was wondering is there any specific examples he gives where he feels that its appropriate for the government to step in. Sure, thats a really good question. And in fact again that thats a good segue to what i was next going to suggest is that again in road to surf them how it gives a really good description of the sort of government activities that he thinks are appropriate. He says to prohibit the use of certain poisonous substances to require special precautions in their use to limit the working hours or to require certain sanitary arrangements. Fully compatible with the preservation of competition nor is the preservation of competition incompatible with an extensive system of social services. So hes not arguing against theres going to be poor people in a society. Theyre going to be people who need the help of the community. Thats the nature of the universe. You cant wish those people away or you cant assume that they dont exist people often even if they are able most of the time to take care of themselves in the market economy. They may be ill they may be going through a personal family circumstance. Theres many situations that lead people to require the assistance of the community and its to the advantage of the community that those services are provided people are then more productive education is a good example is education and interference with liberty. Well, i suppose on some libertarian grounds you might be able to make that argument but it seems as those societies that have strong educational systems also have stronger economies. Thats something that almost every government in the world has tested in for the past 200 years does Public Education equal socialism . Hikes argument was no it doesnt equal socialism. Maybe Public Education can be done more effectively or less effectively, but that doesnt mean that of itself. Its necessarily incompatible with a free market and again high notes that government is required to make the free market more effective. He says the functioning of competition not only requires adequate organization of certain institutions like money markets and channels of information, but it depends above all on the existence of an appropriate legal system. So high x view is that government is required both to create the market and to provide certain social services any quotes adam smith. In fact on this very point. He says to create conditions in which competition will be as effective as possible to supplement it where it cannot be made effective to provide the services which in the words of adam smith. Though they may be in the highest degree advantageous to a Great Society are however of such a nature that the prophet could never repay the expense to any individual or small number of individuals. These tasks provide indeed a wide and unquestioned field for state activity in no system. That could be rationally defended with the state just do nothing. So those are those are highex views. And as i said, i think there theres somewhat different than theyre often considered to be i want to shift next and and talk about John Maynard Keynes and keynes was truly a great individual in terms of his personality was a great deal of the source of his success and hayek and canes were contemporaries. They both lived in england from 1931 when hayek moved to the London School of economics from vienna until keyness death in 1946 cains taught at cambridge, which is only 60 miles from london and the economists from london and at the London School of economics where hayek taught and it cambridge where king was they would regularly see each others and conferences and seminars. They read the same economics journals and participated in the same activities and then during World War Two as a result of the bombing of london the school of economics was moved to cambridge for the war years. So hayek relocated to to cambridge in 1940 and he then lived in cambridge near canes during World War Two and came to know him quite well, so although they disagreed in economics. They were they were friends and hike provided a great description of keynes that i thought would be of interest. He says that whatever one may think of keynes is an economist. Nobody who knew him will deny that he was one of the outstanding englishmen of his generation. Indeed the magnitude of his influence as an economist. Is do much to the impressiveness of the man the universality of his interests and the power and persuasive charm of his personality. So cains personality meant a lot and after he died hayek wrote a note to keyness widow and he commented that keynes was the greatest man. Hed ever known and to some extent you have to say thats common like that or occasion by the circumstance in which theyre expressed, but theres no question that hayek thought very highly of keynes is a person and was bewitched by him as many were and what what ive tried to argue is that keynes is basic theory. Um was a sense a theory of insufficient demand that thats really what he thought the problem was with capitalism and when he surveyed the circumstances of the Great Depression and the economic downturn that was occurring what what was that well, his analysis, theres insufficient demand and if we can get demand going again. Then then the economy will will function appropriately again, thats why when later in the 1980s 1970s and 1980s different nonknesian theories were put forward. They were put forward as supplyside theories. Cains emphasized demand you had to have had to have adequate demand in order for an economy to operate correctly. Well then later individuals emphasize supply you have to have necessary supply if you have necessary supply, thats what will then well meet demand, i guess from my perspective supply and demand our Something Like the blades of a scissors you have to have both. So as i said, i think that over focus on one to the exclusion of the other is is an inaccurate way of looking at either supply and demand and their function in the economic process. But as i say, its certainly keyness idea that the essential problem in the in the Great Depression was that there wasnt sufficient demand yeah question. Candice is all about controlling demand and supply in the economy, but i do believe that its way easier to control the demand because you just need to shift the Interest Rate down and everyone just like going crazy and when you ship the demand the Interest Rate up everyone just like coming down, but thats not a case for supply because it takes a really long time. We need to get the enterprise a lot of incentive for them to move the supplys eye. So did cain think about that . I think thats a really good point in terms of demand at least in the short run is easier to influence than supply. So i i think my argument might be that demand is more of a shortterm phenomenon and supplies more of a long term phenomenon and again and ultimately it does seem to me that you want to create the maximum supply possible in terms of thats the economic goal. How do you maximize production if you dont have if you dont have production to start with doesnt matter how its distributed in terms of so it has to exist. So i think those are good comments and i dont think that either a focus on on one or the other is the best approach and i think that both canes and and later supplysiders can be faulted for sort of. Not appreciating other aspects of the larger economic question lizette. Demand was easier i guess to move but what canes i believe is speaking on is this deflationary cycle where its like, why would i spend money today when things are just going to be cheaper tomorrow and that deflationary cycle. I know we talk a lot about inflation and how like oh, my gosh inflation is hybrid but we dont. Ever really necessarily talk about deflation and how hard it is to combat this deflationary cycle. So my question to you is how do you combat deflationary cycle . How do you incentivize people to spend money today when everyone is thinking that everything is going to be cheaper tomorrow . Because i think that was the Biggest Issue which is why i was soup like exactly what hes speaking on inefficient demand. No ones going to be spending their money if everythings going to be cheaper next week. Good good argument in terms of in the circumstances of the Great Depression. Where at times there was doubledigit deflation and the Monetary System and Banking System have seized up and are inoperable. Why are people going to spend why are people going to invest and so i think that in those sorts of circumstances the issue isnt encouraging longterm saving in the economy or Investment Capital investments. How do you get Economic Activity going again . And it seems to me that keyness solution of Government Spending although again. He was in favor of Government Spending in the form of deficits. That was really his economic argument was that government had to borrow excess funds in the Capital Markets which from the perspective of friedman which i agree with didnt exist. That wasnt the problem but in terms of the solution that cains put forward during the Great Depression of Government Spending, it seems to me that that was the appropriate method again, maybe it could have been handled more through the private sector through giving people tax cuts rather than through Government Spending of programs, but at the same time in an economic crisis, it seems to me that theres going to be experimentation covid more recently is a good example for reasons that no one foresaw all of a sudden Economic Activity plummets and unemployment is as high as 20 you just got to get money to people. I i think that in a lot of ways the the response to covid was in some respect respects better than the response to the Great Depression because it really was just giving money to individuals and private businesses and largest part and that seemed to maintain a certain amount of Economic Activity. I think the problem and its really ironic. Is is that . Keyness solution of government deficit spending is a solution that worked in the Great Depression because of deflation, but he called his great work the general theory of employment interest in money as if this were the solution in in most economic circumstances, and it really wasnt it was the solution in the Great Depression after it got going but it wasnt a general theory. It was a specific theory. So i think that that was as i said, i heartily disk agree with keyness technical discussion of the cause of the Great Depression finding it to be in excess saving once the Great Depression got going that there had to be some Government Intervention does those seem to me to be inevitable and i think that was cains great contribution to economics was that whether you agree with his policies or not. He basically thought that there was a significant role for government to play like hayek. Keynes was no socialist. He didnt think government should micromanage individual decisionmaking and set prices and and and try to determine what production should be in different industries. He thought that really only the market could do that, but he did think that a quote unquote pure free unfettered free market wasnt necessarily the most productive and that the way for government to intervene effectively was for government to have appropriate monetary and fiscal policies, that would continue to allow the private sector to operate at full employment and whether one agrees with keyness particular monetary and fiscal policies or not. I do think that that the thought that government has that role to play with respect to monetary and fiscal policies is a contribution that remains and end. This day again whether or not you agree with the specific remedies that cains put forward and in many respects. Its not so dissimilar from hayeks view. Cains probably would have emphasized Government Spending more greater Government Role in the society, but he was no socialist as hayek was no socialist and on the other hand, it seems to me that that keynes does emphasize more than high because more an antisocialist. It seems to me whereas canes is more. How do you make capitalism work and his answer is through appropriate macroeconomic fiscal and monetary policies. Well that brings us to Milton Friedman the the third as i would say most influential economists during the 20th century and as ive said before i had the great benefit of knowing friedman a little bit through writing on both hayek and freedmen and he was a wonderful human being and a great teacher extraordinarily warm personality. I remember one brilliant mind. I remember one occasion. I was interviewing him at stanford and i had gone there to do some research in his archive and he happened to be there that day and i had heard dad and i went up and chatted with him for a while and our conversation just incidentally moved toward some topic that id recently researched and he made some statement that i thought was inaccurate based on incidental reading he had done 50 years before and when i got home i discovered he was right and id remembered it. Long so something that you know, i was less than half as age that i had read in the recent past and been intently focused on i had remembered incorrectly and something that friedman had just remembered just read briefly decades before he remembered the detail correctly. So as i said, he had a brilliant mind and and i ive mentioned his great sense of humor as as well as he was really concerned about other people and thats why he was involved in economics was he went into economics originally. He was a undergraduate during the Great Depression and he thought that well if he could understand how economics works and then somehow impart that information to others that then the world will be a little bit better place than through an alternative career and so he really was motivated by a utilitarian standard of the greatest good or the greatest happiness. For the the greatest number and ive emphasized friedmans views and methadology and his idea that for economics to be a science that it has to make predictions and i want to read that again. Because it goes to the idea that weve emphasized in this course that economics can be a science that we can come to agreement on what the causes of of different circumstances are and what actions will bring about different circumstances and if we had that Scientific Understanding then wed have much greater in agreement in economics. So its not a economics isnt a normative or ethical or moral discipline. Its a scientific discipline or it can be a scientific discipline. And what friedman calls positive economics is what i refer to as scientific economics. This is what friedman says. Positive economics is in principle independent. Of any ethical position or normative judgment it deals with what is not with what ought to be. Its task is to provide a system of generalizations that can be used to make correct predictions about the consequences of any change in circumstances. Its performance is to be judged by the precision scope and conformity with experience of the predictions it yields. In short positive economics is or can be an objective science. In precisely the same sense as any of the physical sciences. Well, thats a wonderful goal. That we can get to the point where theres agreement on Economic Issues. And there isnt this fighting and rivalry and emotionality as to different Economic Issues people might continue to greet disagree. They undoubtedly would on. Whats the best economic outcome but at least friedmans view is that theres much greater agreement on outcomes. Then there is on the methods to get there to be sure. Theres also differences on on outcomes, but in general people want to see more Economic Growth rather than less they would like everybody in an economy to do. Well, theyd prefer to see less inflation rather than more inflation. Theres many factors that people would agree on as an appropriate goal of economics. But the economists all disagree in terms of how do we achieve greater Economic Growth . How do we achieve less inflation . How do we achieve a higher standard of living for all and it seems to me that thats really the fundamental economic question and how do we how do we achieve these goals in economics . And i think that was friedmans real accomplishment is not just with respect to a specific monetary theories reinterpretation of the Great Depression and pointing out that it was inappropriate Federal Reserve policy in particular in raising Interest Rates. During the Great Depression that led to the collapse of banks which then led to the collapse of the money supply which then led to the collapse of the economy and unemployment. Thats great intellectual contribution and helped to reframe consideration of a free market economy. Wasnt that capitalism had failed during the Great Depression it was that the Federal Reserve board had failed during the Great Depression. Well, thats an entirely different argument and by having that intellectual understanding. Then were in a position to were in a position to adopt better economic policies in the future than the past and i think that friedmans contributions as ive mentioned as an economist as an academic economist. Were really significant not just his monetary reinterpretation of the Great Depression and his focus on Monetary Policy rather than fiscal policy. Friedman was really the one in the 1950s 60s and 70s. Who said that . Emphasis on fiscal policy and in particular on deficits that that isnt the key to Economic Growth rather the key to Economic Growth is Monetary Policy that thats just purely become the new conventional wisdom and people really dont other than an extreme conditions talk talk much about the deficit other than theyre against it in some general way, but in most circumstances individuals dont use deficit spending as a way to influence the economy rather. Its the Federal Reserves Interest Rate policy, which is mostly used to influence the influence influence Economic Activity. So his ideas there have been very effective and have really triumphed as a means of moderating economic Economic Activity, but at the same time it seems to me that it is his his idea of prediction and the idea that we can come to a science of economics that is most important and i would again know that his work in economic theory is very different than his work as a public intellectual isnt it as an academic economist . He did great statistical research. He researched different fields for years. Weve also talked about his work in the area of Flexible InternationalExchange Rates, the entire economics profession was on one side. He thought that Flexible InternationalExchange Rates would be a better Economic Policy. Thats also a sort of international Monetary Policy. Thats proven very effective. But as i say, i think its as philosophical approach. On on a positive economics, which is really in some ways the most important and ill close today with a comment that he uses to conclude that essay on the methodology of positive economics where he talks about. How do we create new economic theory . He says progress and positive economics in scientific economics. Will require not only the testing and elaboration of existing hypotheses. But also the construction of new hypotheses. On this problem. Theres little to say on a formal level. The construction of hypotheses is a creative act of inspiration. Intuition invention its essence is the vision of something new and familiar material. The process must be discussed in psychological not logical categories. Studied in autobiographies and biographies not treatises on Scientific Method and promoted by maximum example not syllogism or theorem. So thats a very humanistic perspective. I think all of these economists that weve considered hayek canes and freedmen they were primarily empirical economists. Thats what was important about them. They put forward views of the world hike with respect to the division of knowledge canes with respect to the importance of government macroeconomic monetary and a particularly fiscal policies and friedmans reinterpretation of Economic Policy with his focus on Monetary Policy and also and also on the importance of prediction in methodology, so those thoughts were going to return on friday to our consideration of current Economic Issues and in particularly the issue of inequality, which really none of hayek and canes and friedman considered in depth although friedman to some extent discussed it some more than the other two and i think is a new issue in economic theory that has emerged in recent decades and will continue our discussion on friday. See you then