Writing last week on the Cato at Liberty blog, Steve Hanke argued that Milton Friedman would have supported the “Audit the Fed” bill recently introduced in the Senate. Steve’s reasoning is based on Friedman’s 1962 essay “Should there be an Independent Monetary Authority?” where Friedman said, as Steve pointed out, that “The case against a fully independent central bank is strong indeed.” However, in that same essay Friedman concluded—based on the history and experience with central banking in many countries—that legislating rules for the instruments of policy was the preferred alternative.
For this reason, it is very likely that Milton Friedman would have preferred the policy rules bill rather than the Audit the Fed bill. The policy rules bill is Section 2 of HR 5018 that passed the house Financial Services Committee last year and that the Senate Banking Committee considered in a hearing last week This bill would require…
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Utopia, you are standing in it! 
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