Politics & Power Quote by Milton Friedman

Friedman’s line lands like a cocktail-napkin joke, then reveals itself as an accusation: the state doesn’t merely waste resources, it can alchemize value into worthlessness. The setup is almost childishly concrete - paper, ink, both “perfectly good” - because he wants the reader to feel how absurd the outcome is. Money, after all, is just decorated paper plus collective belief. His barb is that government, through inflationary policy or reckless fiscal management, can dissolve that belief faster than any private actor. Not by burning the paper, but by overproducing it, debasing the signal, turning a medium of trust into a prop.

The repetition of “perfectly good” is doing double duty. It’s comic timing, but it also smuggles in a moral claim: the inputs are innocent; the corruption is institutional. That’s classic Friedman: a free-market faith framed not as ideology but as common sense, with bureaucracy cast as the uniquely capable agent of unintended consequences.

Context matters. Friedman’s career unfolded alongside the rise of modern central banking, postwar Keynesian dominance, and the stagflation crisis that made inflation feel like a daily humiliation rather than a technical variable. His monetarist argument - that inflation is “always and everywhere a monetary phenomenon” - becomes here a meme before memes: concise, repeatable, and pointed at a specific villain.

The subtext isn’t that all government is useless; it’s that government has a monopoly on legitimate currency and therefore a rare power to damage the baseline instrument of everyday life. The joke works because it reduces macroeconomics to something you can hold in your hand, then tells you the hand doing the ruining is the one that promised to protect it.