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There was once a little girl named Annie. Annie was a 

curious girl and loved to learn new things. She always 

overheard her father, an economist, talk about the 

economic issues with the country.   She heard him talk 

about how demand and supply and taxes and interest rates 

and prices affected each other and the country, which made 

him worried. Annie was very interested in her father's work 

and decided she wanted to help him relax. And what better 

way to have fun than a scuba diving trip?

After begging her dad to come, they set off into the ocean 

on a boat, speeding on until they got to the diving spot.

Once she got out of the boat she swam all the way to the 

bottom of the ocean floor. She trying to get a feel for the 

things around her because it was pitch black, when she 

accidentally stepped on something. It was smooth and slimy. 

Suddenly, that thing from under Annie yelled “HEY! Watch 

where you’re going!” 

She looked down and saw a stingray! “Sorry,” she said, “I 

didn't see you there, say, do you think you can help me with 

my dad? He’s going through some rough economic times.” 

“Oh no, that's terrible!” the stingray said as it wiggled its 

way up to Annie, “My name is Friedman. Milton Friedman 

and I am the main advocate for Monetarism and all its 

beliefs.”

“Oh, yeah, I have heard of Monetarism a little bit, but I don’t really 

know that much about it. I only know about the original economic 

theory and the Keynesian one,” sighed Annie.

    “Well, Annie, you’ve got some news coming! My theory is 

the best! Let me tell you about it,” the sting ray said as it swam 

over Annie’s shoulder. “You see, the three main concepts are 

money, supply, and growth.”

    Annie turned her head to face the stingray, with a puzzled 

look on her face. “Um...money supply growth?” she asked, “what 

about it?”

    “That’s the key to the economy and all your daddy’s 

problems, little Annie. Money supply growth. It just has to stay the 

same. If it grows too quickly, there is too much inflation. And if it 

grows too slowly, we’ll be back in a downturn.”

Annie shakes her head disapprovingly. “No way, Milton, or 

whatever your name is. That’s impossible. The entire 

economy cannot be so easy to control with just this one 

thing- money supply growth. There’s got to be more to it. I 

think I’m just going to stick with one of my old family 

economic theories; this doesn’t seem helpful at all.”

    “Oh, honey, but that’s where you’re wrong,” the 

stingray says slyly, “monetarism is fabulous, especially 

because it predicts lots of cases when the Central Bank 

pulls back on money supply growth and economies then 

slow down or go into a recession, which is a big deal for 

economists. They needs to know these things beforehand.”

        Annie slowly nods “That’s pretty crazy that the whole 

economy can depend on basically one thing, but now I 

guess I can see how it could do that,

but how do we change money supply growth? You said it has to 

be constant- not too much or too little. How can we make sure 

that the rate is constant?” 

    “Well,” said the stingray, “we just have to print money! 

Ka-ching ka-ching, you know what I mean?”

    “Ha. ha,” Annie says sarcastically, “but seriously, do you 

just have a money printing machine right here at the bottom of 

the ocean? How would we get this done?”

    “No silly, I wouldn’t do it. The government would. If we 

are running high, they can just print more money to curb 

inflation.”

        Annie ponders and says “Oh, alright. That makes sense. 

Hey Milton?”

    “Yes?” says the stingray

“This all sounds so good. What’s the catch? What’s the 

bad news you’re not giving me?”

    “Alright, sweetheart. You know there’s going to be 

a flaw in every theory, so here’s mine,” the stingray 

reluctantly said, “it’s hard.”

    “It’s hard?” said Annie, “what do you mean?”

    The stingray continues “Well, although my theory 

is totally true and works, it's hard to pursue. We talk 

about the overall money supply, but there is not just one, 

you know? There are many different measures of money 

supply and they don’t all correlate with each other. So it’s 

hard when it’s not specific.”

“Yeah,” Annie said, “I figured. Plus, when you were talking to 

me about all of this, it seemed very ‘more bark, less bite’. It's 

not that easy to follow some simple rule of something like “the 

money supply should grow X amount in one year’”.

    “You’re right there as well,” the stingray said, “but 

other than that, monetarism is the perfect solution to your and 

the world’s economic problems. So when you finally get back up 

to the top of this huge ocean, spread the word, okay?!”

    “Haha, you got it, Milton. Thanks for helping me out. I’ll 

see you around!” And with that, Annie pushed her feet off the 

ocean floor, gliding upwards throughout the ocean water, 

wondering what other intriguing creatures she might 

encounter.

Annie was amazed by this great theory of economics and 

was thinking about it while she swam even deeper. 

Suddenly, she saw a shadow in the dark water and swam 

closer. It was a skinny octopus with glasses!

Annie had never seen such an odd animal, but was even 

more surprised when the weird octopus spoke to her, "Hi 

my name is Friedrich Hayek. Who are you? And why do 

you look so worried?"

Annie replied, "Hi Mr. Hayek, I'm Annie, and I'm sad 

because my dad is going through some hard times and I 

want to help him. I met a stingray who told me the key 

was to keep money supply stable but there are so many 

supplies and it doesn't follow the same rule. So I still don't 

have a better idea to help my dad."

"Hmmm. That stingray sure sounds like Milton Friedman. 

He must have told you about his monetarist policies, which of 

course have many faults. But don't worry I have a plan for your 

dad that will work for sure!"

Annie was confused. How would this odd octopus have a better 

theory. "You? How can you help? "

"Of course I can help!," Hayek said feeling insulted, "I am a 

major proponent of the Austrian Economics principles. I have 

much to say, but I guess you don't need my help."

As Hayek turned to swim away, Annie quickly called after him, 

"Wait don't go. Please tell me how I can save my dad?"

"To save your dad, you must first understand the problem," said 

Hayek grimly as he turned around, "which is the boom bust 

cycle."

"The boom bust cycle?"

"Let me explain: when in depression, interest rates are set very 

low which also causes the creation of more currency. Because of 

the low rates, investment and spending in some areas especially 

housing will surge. As those areas thrive, we experience what is 

called a boom; however, a bust occurs when we realize that the 

boom was actually based on inflation not a growth in savings. 

Then this depression leads to low interest rates and the cycle 

repeats. Understand?"

Annie thought about the cycle for a minute and slowly shook her 

head, "I think so but how can we prevent the bust?"

The wise octopus replied, "well to prevent the bust we must stop 

the boom.What I mean to say is that inflation is what causes all 

the problems. To prevent a depression, the government shouldn't 

interfere by creating more currency."

It was starting to make sense to Annie.

 "If there aren't government actions, what should the economy be 

like?"

"The best economy is one that is spontaneous. Oh you don't know 

what that means? Well basically we should let the economy run 

naturally, influenced only by human actions."

"Are you saying that with only our actions and not the 

government, we won't have any problems?"Hayek the octopus 

sighed and replied, "Unfortunately, we all make mistakes and the 

market will never be perfect. But I believe that with our natural 

evolution, the economy will definitely improve over time."

Annie liked his idea but still wasn't sure if it would work. She 

wanted to think more about it. "Bye Mr. Hayek. Thank you for 

your ideas!"

She waved to the octopus and swam away, amazed by the two 

creatures she had met and talked to, and wondering how her day 

could get any weirder.

Then little Annie swam on thinking deeply about the Hayek 

theory of economics. While she was swimming back to the 

shore, she met a dolphin. This was the strangest dolphin 

she had ever met. This dolphin had a thick hairy mustache. 

But after all that she had seen so far during her scuba 

diving trip, this did not seem so weird. The dolphin spoke 

first. 

“Hi, I am the great John Maynard Keynes. Who are you? 

And why are you here? And can I   help you with 

something? You look pretty worried.” 

“Hello to you too. My name is Annie. I have come on this 

scuba diving trip to keep my mind away from the economic 

problems that my dad keeps worrying about. I want to help 

my father, but I don’t know how to make America reach 

economic stability! Do I look worried? I just met a sting ray 

and and

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