Chapter 10, The Tide is Turning Summary and Analysis

When governments don't achieve their announced goals, public reaction eventually turns against them. This results in different candidates being voted into office. In the United States, it also took the form of a tax revolt. Eliminating tax revenues without eliminating spending programs is not a situation that can last for long. This dissatisfaction with higher taxes leads to spending financed by monetary growth.

Different nations choose different policies. Policies are often determined by the intellectual thinking of the time. Economics develops and changes just as other disciplines do. The belief in free trade and capitalism came into vogue in the mid-nineteenth century in some countries. A hundred years later, planning and centralization became the popular policies. The Friedmans go on to discuss the difference between concentrated and diffuse interests. Political systems that enact...