A story in today’s Financial Times from London offers a clear, yet tragic, illustration of Friedman’s famous maxim: “Inflation is everywhere and always a monetary phenomenon.”
Zimbabwe’s erratic and despotic President Robert Mugabe has wrecked the country’s economy during his quarter-century in power by flouting virtually every free-market idea Milton Friedman advocated, including sound monetary policy. One result has been rampant inflation. According to the FT, Zimbabwe’s finance minister “admitted that inflation—1,070 percent in the year to October—was excessive, blaming money supply expansion of more than 1,000 percent.”
Just as Professor Friedman would have predicted!