Adam Smith and Milton Friedman are famous for championing laissez-faire, yet both supported government regulation of the banking system. In both cases their deviation from free market orthodoxy was based on a careful reading of financial history: especially Smith's reading of the Crisis of 1772 and Friedman's reading of the Crisis of 1929-1933. In both cases they based their reading on a complex and nuanced account of human nature. This paper describes their parallel journeys to the conclusion that banking requires government regulation.
All Science Journal Classification (ASJC) codes
- Cultural Studies
- Adam smith
- Banking crisis
- Milton friedman