If you’re a fan of free markets and like to peruse book stores, you might run across a recent volume called Milton Friedman On Economics: Selected Papers (University of Chicago, 2007).
Having read and enjoyed Friedman’s classic Capitalism and Freedom, I bought this book and looked forward to learning more about the work of one of the most influential thinkers of our time. While I did find some valuable content in the new book, a large chunk of the material was inaccessible. Most of the selected papers are geared toward trained economists; the topics deal with details of economic theory outside my area of interest (and definitely outside my area of expertise).
Nonetheless, Friedman offers some valuable nuggets of wisdom for the non-economists among us, including this passage on the propensity of governments to seek monetary expansion as a tool for boosting tax revenue:
Governments tend to look little farther than the next election. If that election is close, an increase in the rate of monetary expansion is sure to provide the government with more revenue. The negative effects on revenue, let alone on more fundamental economic and social matters, will come later.
That, I believe, is the fundamental explanation why governments so often inflate at a higher rate than the rate that would yield the maximum revenue over a considerable period.
