ABSTRACT
Milton made the remarkable discovery that oil has the property of making machines operate more efficiently. The central tenet of the New Orthodoxy is that the economy is a single-gear machine. The machine cannot operate without fuel. The fuel is money. There is an optimum quantity of money which will drive the machine with stable prices: too little money will cause the price level to fall, too much will cause it to rise. The only possible cause of failure of a single-gear economy to achieve full employment potential is some form of market imperfection. Frictional resistance prevents the engine from achieving its full potential. If the government wishes to achieve full employment without inflation, its scope for action (or inaction) is clear. It is clear precisely because the economy is regarded by the New Orthodoxy as a single-gear machine.
