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Page 53
each case is voted on separately. When a vote is taken on whether Mr. Jones can speak on the corner, it cannot allow for the favorable effects of an announced general policy of free speech. It cannot allow for the fact that a society in which people are not free to speak on the corner without special legislation will be a society in which the development of new ideas, experimentation, change, and the like will all be hampered in a great variety of ways that are obvious to all, thanks to our good fortune of having lived in a society which did adopt the self-denying ordinance of not considering each case of speech separately.
Exactly the same considerations apply in the monetary area. If each case is considered on its merits, the wrong decision is likely to be made in a large fraction of cases because the decision-makers are examining only a limited area and not taking into account the cumulative consequences of the policy as a whole. On the other hand, if a general rule is adopted for a group of cases as a bundle, the existence of that rule has favorable effects on people's attitudes and beliefs and expectations that would not follow even from the discretionary adoption of precisely the same policy on a scries of separate occasions.
If a rule is to be legislated, what rule should it be? The rule that has most frequently been suggested by people of a generally liberal persuasion is a price level rule; namely, a legislative directive to the monetary authorities that they maintain a stable price level. I think this is the wrong kind of a rule. It is the wrong kind of a rule because it is in terms of objectives that the monetary authorities do not have the clear and direct power to achieve by their own actions. It consequently raises the problem of dispersing responsibilities and leaving the authorities too much leeway. There is unquestionably a close connection between monetary actions and the price level. But the connection is not so close, so invariable, or so direct that the objective of achieving a stable price level is an appropriate guide to the day-to-day activities of the authorities.
The issue what rule to adopt is one that I have considered at some length elsewhere.3 Accordingly, I will limit myself here
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3A Program for Monetary Stability, op. cit., pp. 7799.

 
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