Milton Friedman, the grandmaster of conservative economic theory in the postwar era and a prime force in the movement of nations toward lesser government and greater reliance on free markets and individual responsibility, died today. He was 94 years old.
A spokesman for the Milton and Rose D. Friedman Foundation confirmed his death.
Conservative and liberal colleagues alike viewed Mr. Friedman as one of the 20th century's leading economic scholars, on a par with giants like John Maynard Keynes, Joseph A. Schumpeter and Paul Samuelson.
Flying the flag of economic conservatism, Mr. Friedman led the postwar challenge to the hallowed theories of Lord Keynes, the British economist who maintained that governments had a duty to help capitalistic economies through periods of recession and to prevent boom times from exploding into high inflation.
In Professor Friedman's view, government had the opposite obligation: to keep its hands off the economy, to let the free market do its work. He was a spiritual heir to Adam Smith, the 18th-century founder of the science of economics and proponent of laissez-faire: that government governs best which governs least.
The only economic lever that Mr. Friedman would allow government to use was the one that controlled the supply of money -- a monetarist view that had gone out of favor when he embraced it in the 1950s. He went on to record a signal achievement, predicting the unprecedented combination of rising unemployment and rising inflation that came to be called stagflation. His work earned him the Nobel Memorial Prize in Economic Science in 1976.
Read the whole thing.
I am not terribly well-schooled in economics, but Mr. Friedman was a champion of the libertarian movement and a favorite author of mine -- particularly Free to Choose.
It should also be remembered that Rose Friedman, Milton's wife and an excellent economist in her own right, played a huge role in the success of his ideas and in his writings. The pair were truly great at challenging one another.
Two quotes from him:
A major source of objection to a free economy is precisely that it [...] gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.
The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.
RIP.
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He was a great fantasist. Good riddance.
friedman was an apologist for the capitalist system which oppresses those out of power. he may RIP, but those who are shackled to the servitude of the "free" market won't be breathing free anytime in the near future!
Wow,
Fantasist? Good Riddance? Exactly what was he fantasizing about? The business cycles have become less severe. Unemployment is down to 5% and economic growth in the US is fairly strong relative to the rest of the world, largely because of implementation of his theories?
Also, he wasn't an apologist. He didn't apologize for anything. He strongly advocated the adoption of theories and policies that were based on strong statistical research?
I'm assuming that most of the readers / commenters are scientists or at least students of science. What exactly makes your peer review scientific method better than Mr. Friedmans?
What exactly makes your peer review scientific method better than Mr. Friedmans?
economics is a normative 'science.' its claims toward positivism are a joke.
I think my view - and I suppose it is not an authoritative one, is that Friedman was a great theorist, but the fact is that the subtleties were lost on the ideologues and politicians who interpreted his screeds. If we are talking about no government interference in the economy, then we mean no government interference in the economy.
Instead, what we get from the champions of the 'free' market is the principle of no government interference... except defense and reconstruction efforts and patents and copyright systems and farm subsidies and import tarriffs and immigration controls and anti-terrorism laws etc etc etc.
The second issue is that Friedman considers a successful economy to be too much of an end in itself. While economic agents are supposedly free, often this freedom is relative to their economic power. Once companies get big and strong enough, there is really no difference between governments interfering in the market, and companies themselves using a variety of measures (advertising, monopolies, government lobbying, etc) to restrict the freedoms of their competitors and consumers. Given that all actions affect the markets, why should shareholders have more freedom than the rest of the electorate, and their representatives, the government?
Here's what's funny:
The free market doesn't care what color people are? Where is this free market of which he speaks? Is it the usual imaginary one that libertarians are always talking about but never materializes no matter how much you deregulate? Or is it the current one that doesn't protect poor workers (especially migrant ones), puts checks-cashed stores on the corrners of every black/hispanic neighborhood, has dataminers who aggregate enough data about the poor that it's effectively red-lining people of color out of fair loans or fair credit, and creates credit card debt on secured cards with usurous lending rates targeted at the poorest and least educated among us?
Hell, the "free market" is designed to enslave the poor. It will never let them save money and invest, and keeps them down through data aggregation, services that prevent responsible saving, and predatory lending practices. This is because the free market is still run by the people on top who want to stay there no matter what the cost to the people on the bottom. They always find a way to keep the lower classes down, and ensure that their position of wealth remains unchallenged for generations.
Non racist my ass, and fair my ass. It's a class-enforcement market, not a free one.
Then there's this gem:
The free market screws the poor, but anyone who dares suggest that regulations might help to prevent excesses of the market or unfairness in distribution is just a fascist/communist. Charming, that Friedman. FDR must not have believed in freedom when he was waging that war against world-dominating fascists. What an asshole.
James, like most conservative and libertarian apologists you are citing only favorable figures to give a skewed perspective on the economy. 5% unemployment isn't that impressive given that wages have been stagnant, many people have to work two or three jobs to even be able to afford basic living expenses and we solve a lot of our poverty problem by tossing it into prisons. Likewise, the economic growth always boasted by libertarian inspired ideologues almost exclusively goes to the higher income earners (trickle-down never worked).
And even so, a lot of countries are starting to surpass us in those categories. In 2004 and 2005, Finland, the bastion of the Nordic social-welfare state libertarians never tire of telling is actually a disaster, topped America in the Geneva growth and competitiveness index. And about 8 countries topped us this year as being great places to live.
As a "conservative and libertarian apologist" I cannot help but offer readers an alternative view on Milton Friedman's unique contributions to Mothership Earth (from Larry Kudlow via National Review Online):
Friedman's own words are the best source for judging his ideas on how to make the world a better place for all. Take for example this line from his famous 1991 speech "ECONOMIC FREEDOM, HUMAN FREEDOM, POLITICAL FREEDOM":
Or, speaking of "the capitalist system which oppresses those out of power, how about this quote?
Faber quisque fortunae suae!
It is a situation in which everybody thinks he is going to be better off.
...and yet it is always the white males who end up "better off."
T.C.O:
Actually, the whole 'Reganomics' thing was one opf the worst things to happen to the US economy - the Carter years had come close to paying back the overspending of Vietnam and, pace the second oil shock, the US was getting back on track by 1980 anyway. Trade and government deficits were returning to zero. Regan took this improving position and threw it away with unsupportable tax cuts and deficit spending, something that is now being repeated by bush the younger. The US has a LOT of family silver to sell - but not an unlimited amount.
And you may also note that countries such as China, India and Russia are hardly unregulated private enterprise economies.
But the biggest problem is the assumption that all transactions in a market economy are voluntary and mutually beneficial; in reality, this can only be the case when both parties are in a position to refuse the transaction. Yet people are NOT free to not buy food, not free to not pay for shelter, etc - these impose constraints on people's choices which are greater the worse off you are.
Indeed, in macro terms this becomes a serious drag on the economy, since it means that the vast majority of people will be forced by economic nessicity into lower-value occupations than they could otherwise achieve.
If we take it to the furthest level then we should also say that if a person cannot afford an operation for early stage cancer, then they should be sent away, presumably to die of starvation when they become too ill to work. I would advise you to be as wary of an economic system that requires everyone to be a well educated, healthy adult of independant means as one that dosen't require anyone to get off of their backside.
Tyler said:
"James, like most conservative and libertarian apologists you are citing only favorable figures to give a skewed perspective on the economy. 5% unemployment isn't that impressive given that wages have been stagnant, many people have to work two or three jobs to even be able to afford basic living expenses and we solve a lot of our poverty problem by tossing it into prisons. Likewise, the economic growth always boasted by libertarian inspired ideologues almost exclusively goes to the higher income earners (trickle-down never worked).
And even so, a lot of countries are starting to surpass us in those categories. In 2004 and 2005, Finland, the bastion of the Nordic social-welfare state libertarians never tire of telling is actually a disaster, topped America in the Geneva growth and competitiveness index. And about 8 countries topped us this year as being great places to live."
This is partly because other countries are also adopting Friedman's theories.
And I think you all miss the point - the idea that monetary supply has an impact on the real economy is something that was expanded, promulgated and turned into policy prescription by Friedman. This is why everyone, regardless of political creed, should be thankful to him.
chet said:
"economics is a normative 'science.' its claims toward positivism are a joke."
Silly comment. Positive economics works, and has done for decades. The results are all around you.
In your response to comments here, you said
The assertion as you phrase it sounds fine. The practice is moret than somewhat distasteful, leading as it does to full deregulation, spawing Enron-type disasters which fully deprive many of their ability to do anything as their savings as completely lost. Minimum wages, any regulation of any sort on any industry or profession, public housing - all of these things were abominations to Friedman, along with many other things. The unfettered free market devours the poor. Some of us would rather have some of our choices restricted by a social compact that attempts to care for those we require (look at the market's reaction when unemployment is "lower than expected") to remain at the bottom.
There is no such thing as a free market. If there is a single rule, like we invent money and agree on it's value, etc., poof, no free market. And nobody pulls up their boots themselves, everybody depends on many others and we need to stop screwing most of the people.
Andrew Dodds,
Actually, Friedman's work on monetary policy can be credited in large part for the Fed policy under Volcker, which spanned both the Reagan and Carter administration. The major deregulation initiatives also started under Carter. So while the National Review may not give any credit to Carter (not exactly suprising - I think there's something in their bylaws prohibiting ever saying anything nice about Democrats), the major policy improvements of the time were in keeping with Friedman's advice. On the area where Reagan's economic policies have fared poorest in retrospect, predictions that tax cuts would pay for themselves, Friedman actually differed from the Supply-Siders like Wanniski who believed that you could increase revenue by cutting taxes while running a deficit and was responsible for the adage "To spend is to tax".
Also, China, India, and Russia all have a lot less heavily regulated economies than they did 20 years ago.
And finally, Friedman actually advocated a negative income tax if your income is below a certain point, you get money) as a means of providing for the poor, which is a next of kin of the EITC.