I have arrived at the conviction that the neglect by economists to discuss seriously what is really the crucial problem of our time is due to a certa… - Friedrich Hayek

What all this amounts to, then, is that the Rule of Law requires that administrative discretion in coercive action (i.e., in interfering with the person and property of the private citizen) must always be subject to review by an independent court which is not an instrument of, or even privy to, the aims of current governmental policy; that its review must in all such instances extend to the substance of the administrative act and not merely to the question whether it was infra or ultra vires; and that, if such a court finds that the rights of private citizens have been infringed, it will assess damages just as if the right of this person had been violated by another private citizen. This, in addition to the familiar requirements of generality, equality, and certainty of the law is really the crux of the matter, the decisive point on which it depends whether the Rule of Law prevails or not.

What I expect is that inflation will drive the Western countries into a planned economy via price controls. Nobody will dare to stop inflation because to discontinue inflation will inevitably cause extensive unemployment. So assuming inflation stops it will quickly be resumed. People will find they can't live with constantly rising prices and will try to control it by price controls and that of course is the end of the market system and the end of the free political order. So I think it will be via the attempt to regress the effects of a continued inflation that the free market and free institutions will disappear. It may still take ten years, but it doesn't matter much for me because in ten years I hope I shall be dead.

The newfangled word monetarism means of course no more than the good old “quantity theory of money”, as it was formulated in modern times by the late Professor Irving Fisher and reformulated by Professor Milton Friedman. Of this I said nearly 50 years ago in the first lecture I delivered in this country that “from a practical point of view, it would be one of the worst things which could befall us if the general public should ever again cease to believe in the elementary propositions of the quantity theory”. This was, however, unfortunately brought about by the seductive theories of Lord Keynes. I then said that it was in many respects a crude over-simplification, but the irrefutable chief content is still that inflation is always and everywhere the effect of an excessive supply of money and that it can be cured only by a restriction of its supply.