2 Of the many frustrations of any editor, surely, avoidable delay is the greatest. And this frustration is almost infinitely compounded when in the interim an unexpected death occurs. Professor Ferguson sent this manuscript as a draft; certain questions which he raised in the accompanying letter would normally have been resolved in the exchange of two or three letters or 'phone calls. I placed one call to learn he was ill; rather than press the query, I delayed. When next I 'phoned, I was shocked to learn of his completely unexpected and therefore all the more untimely death. Because the draft he sent contains so much of his own style and vigor, I have elected to print it in this incomplete form. The points he raised in his letter remain unclarified. In the face of this series of events, I have asked Professor Nell to undertake the task initially given to Ferguson. The two rarely saw things in the same way. Thus, the choice of Nell was not intended to finish Ferguson's incomplete assessment. I mention the foregoing simply to explain the unique treatment in these review essays. Of Charles Ferguson's death so little can be said-he was an ebullient souil, and a man of significant originality. -M. P.

MILTON FRIEDMAN AND ANNA SCHWARTZ Monetary Trends reports a great many findings-53 are enumerated in the introduction-but paramount is the stability of the demand for money in the US and Britain over the past century. The money stock controls money income. This proposition more than anything else is the point of their painstaking investigation. Friedman and Schwartz argue against what might neutrally be called the early post-war view of the macroeconomic role of money: Velocity will move easily to reconcile any level of nominal income to any money stock. The demand for money in this view is a will-o'the-wisp, as the authors put it. Monetary policy has little influence over real activity; stabilization policy necessarily relies on fiscal instruments. The volume is completely convincing in disposing of this idea; today's reader is likely to be puzzled why so much space is devoted to a view that has no serious adherents among professional economists. Friedman and Schwartz are generals fighting an earlier war, a situation accentuated by the long lags in putting this volume into print. Though the opposing armies fighting for the early postwar view have withdrawn in total rout, a new front has opened up, and the quantity theory is fighting for its life once again. Worse yet, the new armies are fighting under the banner of free-market economics and are led by former colleagues and students of Milton Friedman. The midwest, once the stronghold of the quantity theory, is now largely occupied by the enemy. The new monetary economics views the quantity theory as nothing more than an artifact of government regulation. An economy organized along free-market principles could function without money at all (Fischer Black, 1970). It is true that the kinds of monetary regulations imposed by the American and British governments of the past century create a more-or-less stable relation between a certain class of assets called money and nominal spending (Eugene Fama, 1980), but different regulations would alter that relation. Even the real bills doctrine, anathema to quantity theorists because it invites unlimited expansion of the money supply, has advocates in the new school (Thomas Sargent and Neil Wallace, 1981). monetary system where the government is unconcerned about the money stock has been advocated by a University of Chicago economist while visiting the Hoover Institution (John Bilson, 1981). Restoring the intrinsic value of money, not limiting its quantity, has been found to be the key to successful disinflation by one member of this group (Sargent, 1982). critical summary, titled A Laissez Faire Approach to Monetary Stability, written * See p. 1528, above, for publication information.