Page 7 - Azerbaijan State University of Economics

N.Akimov., S.Baizakov., A. Oinarov., E.Utembayev: The analysis of the macroeconomic
dynamics and assessment of smart factors’ inputs to the balanced growth rates

wrote the book, thus, justifying his core discovery, that is, the law on wealth
distribution. His formulated law is the most vivid reflection of the reality and
practices of the developed countries because each production factor is being
rewarded from incremental shares of the common pie. The level of increments is
viewed as a static standard. Without reading the book one may not instantly grasp
that John B. Clark was, in fact, not right.
Fair and just economic laws serve the pillars of support in carrying out
economic analyses. That is applied to John B. Clark and others also. Thus, I.
Schumpeter wrote: ―I hope once I will be able to prove, not only from the historical
but also logical perspective that the notion of numbers and their quantitative value is
of fundamentally economic nature.
They evolve from human economic activity. I also hope to prove that the notion
of the equilibrium has been shifted from Economics to Nature, not in the reverse
order. The fundamental economic truth may be formulated as follows: all visible
changes tend to position themselves vis-à-vis one another or, in other words, they are
permanently adapting to constant changes in the data [Schumpeter J.A., 2007].
Milton Friedman did avail of his own regulatory instruments. Thus, in chapter
Rules Instead of Powerful Bodies of the book titled ―Capitalism and Freedom‖
Milton Friedman wrote the following: ―To date, only one method which promises
luck has been discovered. We need to try instituting the rule of law not of
individuals. We should do it by means of setting the rules that regulate fiscal and
monetary policies. Such rules will enable the society to control fiscal and monetary
policies with the help of political power. However, the latter will not let the policies
to be influenced by whims of politicians» [Friedman Milton, 2006].
Herewith, are his comments on the above subject matter: ―At his moment, I
would concentrate on the set rule, which prescribes the fiscal and monetary policy
makers to ensure the set growth rate of the money mass. In this, I would define the
money mass as a sum of money which operates beyond commercial banks and their
depositaries. I would authorize that the Federal Reserve System monitor the overall
reserve money (as defined above) to grow month after month (if possible day by
day) at an ―x‖ percent annual rate, where ―x‖ is any number between 3 and 5. The
question of how to define ―money‖ and how to set growth rates is less important
compared to the fact that this notion is clear and growth rates have been set‖
[Friedman Milton, 2006] .
Milton Friedman‘s thoughts are quiet close, in their content, to the very
formulation of natural laws by the Universal Economic Law of John B. Clark. The
Universal Economic Law, according to John B. Clark, ―reflects the theory of what
may be called as ‗wages‘ and ‗natural interest‘. Those will undergo no static tests

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