Friedman will certainly go down as one of the most influential thinkers on economic theory from our time. His insight and revival of the concepts of free and open markets, removal of government interference in matters such as interest rates, through the Chicago School of Economics are crucial to our ongoing success and growth.
Milton Friedman is a paragon of libertarian thought, and the world is worse off without him in it.
UPDATE: By the way, I meant to recommend that you go to YouTube and search for Milton Friedman’s excellent work on the PBS series “Free to Choose.” There are a great number of the episodes uploaded there, and you would do yourself a great service by watching these episodes as a primer into fundamentally sound economic theory.
I’ve always failed to see how anyone could reasonably argue that official intervention in people acting in their own self-interest does anything but hamstring the growth of an economy.
The concepts of tinkering with free market decision making by taxation/regulation policy to make the free market better or more “fair to all” simply doesn’t wash in the long haul.
The greatest things that have ever been accomplished by mankind (that includes the ladies, too) have not been done by governments, but by individuals. Friedman recognized this as the fundamental concept that drives lives, societies and economies.
Friedman would not agree that taxation/regulation to ensure economic fairness necessarily hampers growth. For example, he was an advocate of the negative income tax (applied to low wage earners), a form of taxation that would both ensure economic fairness and stimulate growth.
No trained economist would ever support the proposition that fully unregulated pursuit of self-interest is socially optimal. While Friedman railed against forms of government intervention that created social welfare losses, he also supported government intervention in the limited set of cases where markets fail (IE, externalities).
On a separate note, the Ayn Randian notion of superman individuals succeeding in spite of oppressive governments is silly in my view. Individual achievement, particularly technologically advanced achievement, takes place within an environment determined by government policy. The subsidy of higher education, for example, makes it easier to develop all the fancy technologies we have today.
Massive technological advancements (IE, the development of nuclear weapons or advanced space flight capabilities) require government funding and organization. Individuals make the accomplishments, but only because they are organized and financed by government policy.
If [Casey] were right, we’d all be speaking Russian right now.
C’mon, gahrie. I don’t think Casey’s characterization of Friedman’s philosophy or his (perhaps overstated) view that individuals owe their accomplishments to some degree to gov’t organization and subsidies is an embracement of Soviet Communism.
The only reason that government controls areas like spaceflight right now is because they carved out a monopoly for themselves.
When you’re the only game in town with the resources to pull off an endeavor like space flight (although this is changing), the monopoly pretty much carves out itself.
The biggest advance of the last half of the 20th century, the PC, has nothing to do with government.
Perhaps, but the same is not true for the Internet, which was the product of gov’t research (and not Al Gore’s doing ;-)
. . . only if the benefits of free trade and free-market capitalism are up for debate.
Which they, um, actually are…
The impact of the free trade system is very much up for debate, and the free market capitalism system has shown many times in the past that it devloves into monopolies. Like i said, its up for debate, unless you are some ideologue who can’t stomache disagreement.
If you were right, we’d all be speaking Russian right now.
I am so not surprised that you see the world in such stark black and white gahrie. There is an entire spectrum between a complete free-market economy and a complete communist system. Just because one doesn’t believe in NO government control does NOT mean they believe in COMPLETE government control.
The only reason that government controls areas like spaceflight right now is because they carved out a monopoly for themselves.
Actually its because the expense involved and the resources necessary were so vast that the private sector was incapable and unwilling to take on the risks involved.
The biggest advance of the last half of the 20th century, the PC, has nothing to do with government.
And that, right there, shows that you don’t have a clue. The first computers were built for the military, advances in the technology was funded by the government, and although private companies were involved they were pretty much all government contractors. I had the chance to meet the inventor of the PC about a month ago, his name is Steve Wozniak (co-founded Apple computer). As a child and young man he had access to early computer chips becaue his father worked for a government contractor. Much of his later experience was working with computers at Universities funded again, by the government. The Personal Computer has nothing to do with the government? HA, thats just wrong gahrie, verifiably WRONG. Oh yeah, and that little thing called the internet? Government created that too.
The subsidy of higher education by the government does nothing but make higher education more expensive.
This isn’t even a rational statement. How does government funding of higher education make it MORE expensive???
OK David K..you’ve made your snarky comments, now present your arguement.
I will even begin.
Free market economies have produced the highest standards of living ever to exist. For instance in the US, the biggest problem facing our poor today is obesity. Every example of command economy has produced mass starvation.
The one critic you have made about the free market is that it tends to produce monopolies. Well government control of the market produces the biggest monopoly of all.
One problem with your argument gahrie (and nice to see you completely ignore the areas that i proved you wrong on), we don’t HAVE a free market economy. We have a regulated economy. When we did have less regulation we had, in fact, very low standards of living for all but those at the top. Things like, child labor, no health care, 7 day a week, 10+ hour days, no concept of things like vacation time, etc. All of those came about because of organized labor and government regulation and trust-busting. An unregulated economy demonstratably fails to do anything but make a very small class of very wealthy people.
And, yet again, you fail to realize that there is such a thing as DEGREE of regulation. I have no problem having a discussion with someone over how much regulation there should be and which produces the best system. Yes over-regulation leads to problems, but so does under-regulation. This is, and i can’t believe i have to point this out again, not a one or the other type of discussion. The question isn’t “Is regulation bad?”. Thats like saying “Is sugar bad?”. Not enough sugar, you die. Too much sugar, you die. The same is true of government regulation.
Umm, well 1 isn’t true. Medicare and medicaid are actually much more efficient systems than private health insurance.
And student loans are allready part of the private sector. The government facilitates the aid system, but most student loans are actually held by private organizations. So there goes THAT argument too.
Now how about responding to the other points i countered, like the one about the PC?
1) At the time the PC was invented (not by Woz by the way..he and Jobs were merely the first to sell assembled PCs.) government computers literally filled rooms. They were mainframes, not PCs. None of the early PC companies had government contracts or subsidies. It took private industry to turn computers from huge, inefficent, costly monsters into what PCs are today.
2) Your comments about spaceflight are simply wrong. Prior to Kennedy’s introduction of the space race, and the co-opting of space by the government, there were many individuals working in rocketry independent of the government. The government made private space exploration illegal for all intents and purposes. It was a relaxation of governmental intervention and regulation that has lead to the recent advances in spaceflight. The companies making the most advancements are doing so without government money also. I contend that there would have been a Rutan and a Branson in the 1960’s except for the actions of the government.
3) Produce a scholarly work that argues that government grants loans and subsidies have not increased university tuition. I’m betting you can’t, because you are the first and only one I’ve ever seen trying to make that arguement.
4) The government has four methods of regulating commerce: regulations, tarrifs, taxation and subsidy. All four create inefficency and raise the cost for comsumers. I suggest you look at the sugar industry as just one example.
5) You have changed the terms of your arguement. Your first comment was:
I agree that he was influenetial, wheather or not his influence was beneficial i think is up to debate.
This is an attack on Friedman, and his theories.
The next version of your arguement was:
The impact of the free trade system is very much up for debate,
I attempted to enter into a debate on this statement, but then your arguement changed into:
I have no problem having a discussion with someone over how much regulation there should be and which produces the best system
It’s hard to hit a moving target. So we can discuss:
A) Were the theories of Milton Friedman beneficial?
B)Has the impact of free market policies been beneficial?
c) How much governmental regulation should there be?
I am willing to debate any of these three propositions, but first you have to decide which one you are trying to debate.
The impact of the free trade system is very much up for debate, and the free market capitalism system has shown many times in the past that it devloves into monopolies.
The impact , perhaps; the benefits not so much. And if you mean to say that entire capitalist systems have devolved into monopolies, I’m afraid I need an example. Sure, free-market capitalism has a higher propensity for monopolies than socialized economies; but to borrow a phrase: Free-market capitalism is the worst type of economy, except for all the others . . .
One of the best thing about ‘ole Milt is his loyalty to sports. I’ve never seen a man throw a hot dog so far until ‘ole Milt heaved one nearly 30 yards through Wrigley field. Poor old bastard. RIP. PS. Thanks for conquering Chile. They’re definitely better off now.
1) No gahrie, the first actual PC was invented by Wozniak. There were other devices around at the time that were also computers of some type but they were in no way like PC’s we have today. The Apple I was the first device that took input from a keyboard and provided output to a screen. Before that there was nothing like it, since, they have all followed that model. If you are going to claim that the PC as we know it is such a watershed event then you need to acknowledge that absolutely the government played a key part in helping develop the technology that got us there. To try and say the government had nothing to do with it is just plain intellectually dishonest.
2) Ok then,w here are all the private companies sending people into space and to the moon. Here we are 40 years later and the best that has happened so far is a low orbit plane. Yeah private comapnies are doing AWESOME.
3) Sorry but it doesn’t work that way. If you are going to argue that government grants and loans have caused university tution to increase more than it would have without them then it is YOU who have to provide evidence supporting that theory.
4) If you are going to say that all government involvment increases costs you need to give exmples, and the minute somone points out a counter example (which i did) your argument falls flat. But even if that is true that they pay more at the time of purchase, you completely ignore the indirect costs involved.
5) No, my argument has NOT changed. He was influential, whether or not his influence was positive is up for debate. Its not an attack on Friedman as a person, it is a question of whether his theories work to improve things or not. So far you have given zero substantive supporting evidence that his policies were beneficial. None.
Has anyone noticed that WVa QB Pat White has 181 RUSHING in three quarters. That’s five yards less than the best game Darius Walker has had in his career.
He’s also thrown for 192 yards and has 4 total TDs (2 passing, 2 rushing).
This is a hard argument, because far too often people use the term “free market” for things that are entirely unfree, like any time government and big business collude. Henceforth, assume I use the term in its proper libertarian sense. You know, like Adam Smith and John Stuart Mill used it.
For example, the beginning of the industrial revolution and the rise of the “robber barons” and their monopolies did not come in a time of free trade. Government colluded heavily, making it illegal to form unions or strike and even killing strikers by government force. How exactly is the abridgement of free association an example of free trade? They even went so far as to make the late 1800’s the time when we started compulsory schooling so they could have obedient workers. Before that, you decided if you were going to go to school at all, how often, and where. Or if you were going to apprentice, etc. It took the legalization of unions and a lot of hard work on the part of organized private individuals to make things anywhere near fair again.
As for health care, look at the single payer system. In Canada, the death rate is higher on the waiting list for some operations than on the operating table. There are also cases of refusal to treat on grounds of political belief. In America, if some hospital were cruel enough to do that, at least the person would have an honest chance at another hospital. But when the government runs all the hospitals, you have no other recourse.
And that’s what I really don’t understand; and really, the reason I stopped calling myself a liberal and started calling myself a libertarian: liberals fear the government’s hand in everything… except the economy. The State is an evil octopus that only cares for the interests of power, except when it comes to the economy, when it becomes a loving mother who only wants what’s best for all of us. Your classical forebearers wouldn’t understand. They rebelled against the government-controlled economies of the time: mercantilism and feudalism before that. Both of those centralized economies existed to enrich the rich and impoverish the poor. Classical liberals knew that if you let people better themselves, they would.
Maybe that’s the biggest assumption in the entire debate that gets to me. The liberal side suggests that people are too stupid to run their own lives. (Yet somehow, even though humanity is inherently idiotic, our leaders - also people - aren’t.) By the same standards, our personal lives must also be regulated for our own good; but I know most liberals don’t subscribe to that idea.
The argument is further hampered because we often very simply don’t have examples wherein the government butted out and let people do things on their own. Governments tend to dislike individual initiative. In the issue of space flight, it’s hard because NASA gets all the funding for decades (stolen from the rest of us whether we like it or not) and you expect privatized space flight to catch up in the space of a few years, when they’ve only just now had some ability to do right. If NASA were somehow privatized, for example, with the same engineers and astronauts and other experts, would things really fall apart? Would roads really disappear if they were turnpikes (again, in the original sense of the word)? Construction on I-84 suggests it can’t get much worse. I will give you this: the light bulb, recorded music, the airplane, the automobile, the telephone, the telegram… all without government approval. Authority can’t inspire innovation. In fact, it prefers to stifle it.
Moreover, free capitalism may sometimes create monopoly, but government guarantees it. (You want to educate your kid and send some mail. Options? And at least the post office is in the Constitution.) It’s also hard to show that prices rise when you can hide the cost in taxes. There’s a common liberal argument that governments should have to approve and charter corporations before they can do anything, as in the times of their first founding. Do they honestly not know that they’re talking about the system under absolute monarchy? The kind of corporation founded only at behest of the king includes entities like the British East India Company, largely just a tool of imperialism.
Sorry. I may not be a complete expert in economics, but I know my ignorance enough to know I don’t have the answers for everyone. Do as thou wilt, an it harm none.
Uh, gahrie, have you ever read Friedman? I mean, I know a lot of people think he was a genius based on vague, anecdotal understanding of his work — but I would go farther than Casey and suggest that his theories almost *hung* on the negative income tax. And Friedman wasn’t a pure laissez-faire theorist; he understood as well as anyone that all things are never equal and that a totally unfettered market would eventually oppress the vulnerable.
Friedman was certainly a great mind and his ideas were extremely important; but they’ve been misunderstood, misused, and abused to the point where it seems like they’ve done more damage than good.
This is a hard argument, because far too often people use the term “free market� for things that are entirely unfree, like any time government and big business collude.
Friedman explains free markets rather simply, and brilliantly.
I think we should be willing to recognize, and to salute for its Own sake, massive intellectual Candlepower even when we deny the pragmatic beneficence of its particular (well-intentioned) ideological Prescriptions for the world.
Accordingly let us say, a Kaddish for Milton Friedman: in memory of a great life lived with a rare brilliance, in the long generations whose Fame will go down; and now at last may he Converse bone to bone, with his Equal-and-Opposite number from the Previous era, Karl Marx, every bit as much the Genius and similarly just as Wrong.
Milton Friedman was “just as wrong” as Karl Marx? Is there really no empirical data from history that sheds any light on whether one of these gents was more correct in his philosophy than the other?
Well since we have never seen Karl Marx theories actually put in practice no, i’d say we are missing evidence there. That said I don’t think Marxist communism would work, humans are too
Capitalism and Friedman The man who made free markets popular again.
Friday, November 17, 2006
There are some public figures whose obituaries can be written years in advance. Milton Friedman was not one of them.
Arguably the greatest economist of the 20th century, he won his Nobel Prize 30 years ago. His classic “Capitalism and Freedom� was published 44 years ago. He died yesterday at the age of 94, but as the op-ed running nearby attests, he was active in writing about, thinking about and explaining how economics affects our world until the end.
In today’s feature, he updates and re-examines conclusions he reached about the Great Depression in “A Monetary History of the United States, 1867-1960,� a book published with Anna Schwartz 43 years ago. His thesis was that the Great Depression was not, as was once commonly presumed, a “market failure,� but a failure of government policy. Contraction of the money supply in the wake of the stock-market crash of 1929 was what turned a financial event into an economic catastrophe.
This insight flowed from Professor Friedman’s conviction that “money matters.� As the Royal Academy of Sweden noted in announcing his 1976 Nobel, Friedman’s was a lonely voice in arguing for the importance of the money supply in economics when he began writing about it in the 1950s.
By the late 1970s, stagflation�the combination of high inflation and high unemployment�had made it obvious that the then-dominant Keynesian model had some large holes. These included the effect of the money supply on inflation and the fact that inflation and employment did not move in lockstep as some of Keynes’s disciples asserted. It was a seminal insight, creating what became known at the University of Chicago and elsewhere as the “monetarist school� and laying the intellectual basis for central bankers to break the great inflation of the 1970s.
In awarding its Nobel in 1976, the Royal Swedish Academy of Sciences cited his “achievements in the fields of consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy.� The citation covers a huge swath of economic thinking, and suggests both the range and the consistency of Professor Friedman’s thought. In layman’s terms, the Swedish Academy credited him with nothing less than shredding the Keynesian consensus.
First, he had shown that men are no fools. People spend money in accordance with their income expectations over the long-term, not in response to one-time “stimuli� from the government. This is known as the “permanent income� hypothesis, and it called into question Keynesian notions of how short-term stimulus affects the economy. In addition to his monetary insights, Mr. Friedman questioned the degree to which fiscal policy could be used to “fine-tune� the economy by adjusting spending, tax or monetary policy. Today we take for granted that all of these operate with a lag, but it was Milton Friedman who first highlighted the problem.
For all of his academic accomplishments, Professor Friedman’s role as a popularizer of free-market principles was arguably more important. He wrote a column in Newsweek for 18 years starting in 1966, preaching the importance of economic freedom to a generation that had never heard such things in school. His 1980 book, “Free to Choose,� was a best seller, and the videos that accompanied it were smuggled behind the Iron Curtain like seeds of revolution.
He was among the first to point to Hong Kong as a model of free-market success, a lesson that even today is remaking Communist China. And he first suggested educational vouchers to rescue failing public schools as long ago as 1955; in recent years, he established a foundation to support this idea that continues to advance despite ferocious opposition from unions and other entrenched interests.
This newspaper had the privilege of publishing Milton Friedman’s articles on numerous occasions over the years. We’ve also disagreed with him from time to time, notably on exchange rates and drug legalization. These disputes always gave us cause to reflect, and 20 years ago amid one debate on the benefits of fixed exchange rates we noted that “being spanked by Milton Friedman is one of life’s most humiliating experiences.�
In truth, Professor Friedman always argued with civility and a bracing wit. One of his best barbs on the size of government: “Given our monstrous, overgrown government structure, any three letters chosen at random would probably designate an agency or part of a department that could be profitably abolished.� And he popularized “There is no such thing as a free lunch.�
In “Two Lucky People,� written with his wife, Rose Friedman, who survives him as a distinguished economist in her own right, Mr. Friedman well described the role of a public intellectual: “We do not influence the course of events by persuading people that we are right when we make what they regard as radical proposals. Rather, we exert influence by keeping options available when something has to be done at a time of crisis.�
On the death of Ronald Reagan, whom he advised, Mr. Friedman wrote on these pages that “few people in human history have contributed more to the achievement of human freedom.� The same can and long will be said of Milton Friedman.
I kind of like the way Christopher Hitchens describes his ex-Socialism. That whatever fondness one might maintain for the abstract philosophy, no Socialist critique of Capitalism currently exists. The matter has been decided… empirically. This from a guy who says he feels his abandoned Socialism “like a missing limb.”
On the other hand, socialism (with a lower-case “s”) will be around as long as democracy is. A democraticaly defined and elected government will always have elements of socialism in it.
There’s a great Reason interview with Hitchens from a few years ago available here:
wherein he discusses the tension between libertarianism and socialism. At one point the interviewer asks “Many socialists have a radically anti-authoritarian disposition, even though the policies they would enact end up being authoritarian. What causes this divide?” Hitch’s answer is almost perfect.
———————–
I’m glad Casey brought Rand into the discussion, because even though I have a strongly libertarian disposition, I’m always ready for a little Rand bashing. That’s not necessarily a contradiction. Not all libertarians are Randians, as proven by Julian Sanchez, who calls her work “sophomoric crap.” I think libertarians who admire Rand above all tend to pick out the good parts about individualism and personal responsibility, and skip over the silliness and creepy cult of personality. When I first read Atlas Shrugged in high school, I thought it felt vaguely sinister, but didn’t really know how to put that feeling into words. It wasn’t until years later that I read the famous review by Whittaker Chambers and came to the line: ‘From almost any page of Atlas Shrugged, a voice can be heard, from painful necessity, commanding: “To a gas chamber â€â€? go!”‘ Yep, I thought, that’s it.
I’d say we’ve seen neither Marxian nor Friedmaniac :) theories ever put into practice in their Pure forms as Theorized by their respective Theoreticians.
However, we DO have empirical historical evidence regarding the real-world effects of “communism” as implemented (whose State somehow never Did get around to Withering Away :), and also of unfettered ~ OKOK, of very-Lightly-fettered :> ~ “capitalism” when Let to Do that which it Does (laissez faire) in said Unmitigated conditions. / Such data suggests to me ~ being of the very Soft Left meself, Joe Mama :> ~ that neither neomarxist Statism, nor paleofriedmanish Freedom, produced anything remotely resembling the greatest Good for the Greatest number.
Thus (hi Brendan :) did I say ~ in the context of admiring the Both of ‘em (which I tend always to Do, re Geniuses) (hi Dr. Mike :) ~ that ol’ Milt was “just as wrong” as ol’ Karl.
That Said, as They Say, I grant you that if forced to choose between Alternate Timelines of (a) living as a Proletarian wage-slave during the Industrial Revolution, or (b) dying in Country Joe Stalin’s Gulag or Chairman Mousey Dung’s ;> pogroms, I’d take me chances on the free-enterprise Factory floor, where a Union agitator like me would have at least a marginally better chance of getting Fired, than Shot.
David - us computer geeks from the way-back-then when the PC was invented realise that the PC was invented in spite of Apple, rather than because of it … if Apple had been as positively formative as you would suggest, then why did the IBM PC take off as suddenly and spectacularly as it did ?
It was the success of the PC which forced Apple out of its complacency to where they again started developing their computers - and that, after Apple II and Apple IIe, led to the Macs in all their various incarnations - as responses to IBM snatching market share away from them …
I have one of the original IBM PCs … max 64K on the motherboard, couldn’t have a Hard Drive cuz the BIOS wouldn’t support it, cassette port and all … and it had two very significant improvements over the Apples of the time …
First, it could handle up to 640K of program - not the maximum 128K at which Apple had plateaued at the time …
The IBM PC made PCs available to the masses, such that the masses could enjoy them for many purposes …
And what may be the most sublime part of the irony is that the IBM PC was not expected to be a signficant success by IBM at the beginning … it came out of a limited special program (whose exact title I no longer have on the tip of my tongue) and still managed to succeed way beyond anyone’s reasonable expectations …
November 16th, 2006 at 3:49:10 pm
One of the reasons Friedman will be missed.
November 16th, 2006 at 4:06:42 pm
[…] Michelle Malkin Jackie Passey,Tim Lynch@Cato, Andrew Coulson@Cato, The Volokh Conspiracy, Jay Johnson, and Outside The Beltway […]
November 16th, 2006 at 4:13:01 pm
I agree that he was influenetial, wheather or not his influence was beneficial i think is up to debate.
November 16th, 2006 at 4:44:50 pm
. . . only if the benefits of free trade and free-market capitalism are up for debate.
November 16th, 2006 at 5:11:50 pm
I’ve always failed to see how anyone could reasonably argue that official intervention in people acting in their own self-interest does anything but hamstring the growth of an economy.
The concepts of tinkering with free market decision making by taxation/regulation policy to make the free market better or more “fair to all” simply doesn’t wash in the long haul.
The greatest things that have ever been accomplished by mankind (that includes the ladies, too) have not been done by governments, but by individuals. Friedman recognized this as the fundamental concept that drives lives, societies and economies.
November 16th, 2006 at 6:12:34 pm
Friedman would not agree that taxation/regulation to ensure economic fairness necessarily hampers growth. For example, he was an advocate of the negative income tax (applied to low wage earners), a form of taxation that would both ensure economic fairness and stimulate growth.
No trained economist would ever support the proposition that fully unregulated pursuit of self-interest is socially optimal. While Friedman railed against forms of government intervention that created social welfare losses, he also supported government intervention in the limited set of cases where markets fail (IE, externalities).
On a separate note, the Ayn Randian notion of superman individuals succeeding in spite of oppressive governments is silly in my view. Individual achievement, particularly technologically advanced achievement, takes place within an environment determined by government policy. The subsidy of higher education, for example, makes it easier to develop all the fancy technologies we have today.
Massive technological advancements (IE, the development of nuclear weapons or advanced space flight capabilities) require government funding and organization. Individuals make the accomplishments, but only because they are organized and financed by government policy.
November 16th, 2006 at 6:13:25 pm
The left can never agree that the ideas of Friedman are correct, because they invalidate nearly every tenet they espouse.
RIP Mr. Friedman.
November 16th, 2006 at 6:26:58 pm
Casey:
If you were right, we’d all be speaking Russian right now.
The only reason that government controls areas like spaceflight right now is because they carved out a monopoly for themselves.
The biggest advance of the last half of the 20th century, the PC, has nothing to do with government.
The subsidy of higher education by the government does nothing but make higher education more expensive.
November 16th, 2006 at 7:17:29 pm
If [Casey] were right, we’d all be speaking Russian right now.
C’mon, gahrie. I don’t think Casey’s characterization of Friedman’s philosophy or his (perhaps overstated) view that individuals owe their accomplishments to some degree to gov’t organization and subsidies is an embracement of Soviet Communism.
The only reason that government controls areas like spaceflight right now is because they carved out a monopoly for themselves.
When you’re the only game in town with the resources to pull off an endeavor like space flight (although this is changing), the monopoly pretty much carves out itself.
The biggest advance of the last half of the 20th century, the PC, has nothing to do with government.
Perhaps, but the same is not true for the Internet, which was the product of gov’t research (and not Al Gore’s doing ;-)
November 16th, 2006 at 7:18:57 pm
. . . only if the benefits of free trade and free-market capitalism are up for debate.
Which they, um, actually are…
The impact of the free trade system is very much up for debate, and the free market capitalism system has shown many times in the past that it devloves into monopolies. Like i said, its up for debate, unless you are some ideologue who can’t stomache disagreement.
November 16th, 2006 at 7:27:57 pm
If you were right, we’d all be speaking Russian right now.
I am so not surprised that you see the world in such stark black and white gahrie. There is an entire spectrum between a complete free-market economy and a complete communist system. Just because one doesn’t believe in NO government control does NOT mean they believe in COMPLETE government control.
The only reason that government controls areas like spaceflight right now is because they carved out a monopoly for themselves.
Actually its because the expense involved and the resources necessary were so vast that the private sector was incapable and unwilling to take on the risks involved.
The biggest advance of the last half of the 20th century, the PC, has nothing to do with government.
And that, right there, shows that you don’t have a clue. The first computers were built for the military, advances in the technology was funded by the government, and although private companies were involved they were pretty much all government contractors. I had the chance to meet the inventor of the PC about a month ago, his name is Steve Wozniak (co-founded Apple computer). As a child and young man he had access to early computer chips becaue his father worked for a government contractor. Much of his later experience was working with computers at Universities funded again, by the government. The Personal Computer has nothing to do with the government? HA, thats just wrong gahrie, verifiably WRONG. Oh yeah, and that little thing called the internet? Government created that too.
The subsidy of higher education by the government does nothing but make higher education more expensive.
This isn’t even a rational statement. How does government funding of higher education make it MORE expensive???
November 16th, 2006 at 7:29:05 pm
OK David K..you’ve made your snarky comments, now present your arguement.
I will even begin.
Free market economies have produced the highest standards of living ever to exist. For instance in the US, the biggest problem facing our poor today is obesity. Every example of command economy has produced mass starvation.
The one critic you have made about the free market is that it tends to produce monopolies. Well government control of the market produces the biggest monopoly of all.
November 16th, 2006 at 8:03:58 pm
This isn’t even a rational statement. How does government funding of higher education make it MORE expensive???
1) Anytime the government buys something, it becomes more expensive.
2) For a good discussion of this issue:
http://www.cato.org/pub_display.php?pub_id=3344
November 16th, 2006 at 8:08:43 pm
One problem with your argument gahrie (and nice to see you completely ignore the areas that i proved you wrong on), we don’t HAVE a free market economy. We have a regulated economy. When we did have less regulation we had, in fact, very low standards of living for all but those at the top. Things like, child labor, no health care, 7 day a week, 10+ hour days, no concept of things like vacation time, etc. All of those came about because of organized labor and government regulation and trust-busting. An unregulated economy demonstratably fails to do anything but make a very small class of very wealthy people.
And, yet again, you fail to realize that there is such a thing as DEGREE of regulation. I have no problem having a discussion with someone over how much regulation there should be and which produces the best system. Yes over-regulation leads to problems, but so does under-regulation. This is, and i can’t believe i have to point this out again, not a one or the other type of discussion. The question isn’t “Is regulation bad?”. Thats like saying “Is sugar bad?”. Not enough sugar, you die. Too much sugar, you die. The same is true of government regulation.
November 16th, 2006 at 8:11:56 pm
This isn’t even a rational statement. How does government funding of higher education make it MORE expensive???
1) Anytime the government buys something, it becomes more expensive.
2) For a good discussion of this issue:
http://www.cato.org/pub_display.php?pub_id=3344
Umm, well 1 isn’t true. Medicare and medicaid are actually much more efficient systems than private health insurance.
And student loans are allready part of the private sector. The government facilitates the aid system, but most student loans are actually held by private organizations. So there goes THAT argument too.
Now how about responding to the other points i countered, like the one about the PC?
November 16th, 2006 at 8:45:52 pm
1) At the time the PC was invented (not by Woz by the way..he and Jobs were merely the first to sell assembled PCs.) government computers literally filled rooms. They were mainframes, not PCs. None of the early PC companies had government contracts or subsidies. It took private industry to turn computers from huge, inefficent, costly monsters into what PCs are today.
2) Your comments about spaceflight are simply wrong. Prior to Kennedy’s introduction of the space race, and the co-opting of space by the government, there were many individuals working in rocketry independent of the government. The government made private space exploration illegal for all intents and purposes. It was a relaxation of governmental intervention and regulation that has lead to the recent advances in spaceflight. The companies making the most advancements are doing so without government money also. I contend that there would have been a Rutan and a Branson in the 1960’s except for the actions of the government.
3) Produce a scholarly work that argues that government grants loans and subsidies have not increased university tuition. I’m betting you can’t, because you are the first and only one I’ve ever seen trying to make that arguement.
4) The government has four methods of regulating commerce: regulations, tarrifs, taxation and subsidy. All four create inefficency and raise the cost for comsumers. I suggest you look at the sugar industry as just one example.
5) You have changed the terms of your arguement. Your first comment was:
I agree that he was influenetial, wheather or not his influence was beneficial i think is up to debate.
This is an attack on Friedman, and his theories.
The next version of your arguement was:
The impact of the free trade system is very much up for debate,
I attempted to enter into a debate on this statement, but then your arguement changed into:
I have no problem having a discussion with someone over how much regulation there should be and which produces the best system
It’s hard to hit a moving target. So we can discuss:
A) Were the theories of Milton Friedman beneficial?
B)Has the impact of free market policies been beneficial?
c) How much governmental regulation should there be?
I am willing to debate any of these three propositions, but first you have to decide which one you are trying to debate.
November 16th, 2006 at 9:20:26 pm
The impact of the free trade system is very much up for debate, and the free market capitalism system has shown many times in the past that it devloves into monopolies.
The impact , perhaps; the benefits not so much. And if you mean to say that entire capitalist systems have devolved into monopolies, I’m afraid I need an example. Sure, free-market capitalism has a higher propensity for monopolies than socialized economies; but to borrow a phrase: Free-market capitalism is the worst type of economy, except for all the others . . .
November 16th, 2006 at 9:27:14 pm
One of the best thing about ‘ole Milt is his loyalty to sports. I’ve never seen a man throw a hot dog so far until ‘ole Milt heaved one nearly 30 yards through Wrigley field. Poor old bastard. RIP. PS. Thanks for conquering Chile. They’re definitely better off now.
November 16th, 2006 at 9:39:39 pm
1) No gahrie, the first actual PC was invented by Wozniak. There were other devices around at the time that were also computers of some type but they were in no way like PC’s we have today. The Apple I was the first device that took input from a keyboard and provided output to a screen. Before that there was nothing like it, since, they have all followed that model. If you are going to claim that the PC as we know it is such a watershed event then you need to acknowledge that absolutely the government played a key part in helping develop the technology that got us there. To try and say the government had nothing to do with it is just plain intellectually dishonest.
2) Ok then,w here are all the private companies sending people into space and to the moon. Here we are 40 years later and the best that has happened so far is a low orbit plane. Yeah private comapnies are doing AWESOME.
3) Sorry but it doesn’t work that way. If you are going to argue that government grants and loans have caused university tution to increase more than it would have without them then it is YOU who have to provide evidence supporting that theory.
4) If you are going to say that all government involvment increases costs you need to give exmples, and the minute somone points out a counter example (which i did) your argument falls flat. But even if that is true that they pay more at the time of purchase, you completely ignore the indirect costs involved.
5) No, my argument has NOT changed. He was influential, whether or not his influence was positive is up for debate. Its not an attack on Friedman as a person, it is a question of whether his theories work to improve things or not. So far you have given zero substantive supporting evidence that his policies were beneficial. None.
November 16th, 2006 at 10:13:28 pm
Has anyone noticed that WVa QB Pat White has 181 RUSHING in three quarters. That’s five yards less than the best game Darius Walker has had in his career.
He’s also thrown for 192 yards and has 4 total TDs (2 passing, 2 rushing).
November 16th, 2006 at 10:29:04 pm
This is a hard argument, because far too often people use the term “free market” for things that are entirely unfree, like any time government and big business collude. Henceforth, assume I use the term in its proper libertarian sense. You know, like Adam Smith and John Stuart Mill used it.
For example, the beginning of the industrial revolution and the rise of the “robber barons” and their monopolies did not come in a time of free trade. Government colluded heavily, making it illegal to form unions or strike and even killing strikers by government force. How exactly is the abridgement of free association an example of free trade? They even went so far as to make the late 1800’s the time when we started compulsory schooling so they could have obedient workers. Before that, you decided if you were going to go to school at all, how often, and where. Or if you were going to apprentice, etc. It took the legalization of unions and a lot of hard work on the part of organized private individuals to make things anywhere near fair again.
As for health care, look at the single payer system. In Canada, the death rate is higher on the waiting list for some operations than on the operating table. There are also cases of refusal to treat on grounds of political belief. In America, if some hospital were cruel enough to do that, at least the person would have an honest chance at another hospital. But when the government runs all the hospitals, you have no other recourse.
And that’s what I really don’t understand; and really, the reason I stopped calling myself a liberal and started calling myself a libertarian: liberals fear the government’s hand in everything… except the economy. The State is an evil octopus that only cares for the interests of power, except when it comes to the economy, when it becomes a loving mother who only wants what’s best for all of us. Your classical forebearers wouldn’t understand. They rebelled against the government-controlled economies of the time: mercantilism and feudalism before that. Both of those centralized economies existed to enrich the rich and impoverish the poor. Classical liberals knew that if you let people better themselves, they would.
Maybe that’s the biggest assumption in the entire debate that gets to me. The liberal side suggests that people are too stupid to run their own lives. (Yet somehow, even though humanity is inherently idiotic, our leaders - also people - aren’t.) By the same standards, our personal lives must also be regulated for our own good; but I know most liberals don’t subscribe to that idea.
The argument is further hampered because we often very simply don’t have examples wherein the government butted out and let people do things on their own. Governments tend to dislike individual initiative. In the issue of space flight, it’s hard because NASA gets all the funding for decades (stolen from the rest of us whether we like it or not) and you expect privatized space flight to catch up in the space of a few years, when they’ve only just now had some ability to do right. If NASA were somehow privatized, for example, with the same engineers and astronauts and other experts, would things really fall apart? Would roads really disappear if they were turnpikes (again, in the original sense of the word)? Construction on I-84 suggests it can’t get much worse. I will give you this: the light bulb, recorded music, the airplane, the automobile, the telephone, the telegram… all without government approval. Authority can’t inspire innovation. In fact, it prefers to stifle it.
Moreover, free capitalism may sometimes create monopoly, but government guarantees it. (You want to educate your kid and send some mail. Options? And at least the post office is in the Constitution.) It’s also hard to show that prices rise when you can hide the cost in taxes. There’s a common liberal argument that governments should have to approve and charter corporations before they can do anything, as in the times of their first founding. Do they honestly not know that they’re talking about the system under absolute monarchy? The kind of corporation founded only at behest of the king includes entities like the British East India Company, largely just a tool of imperialism.
Sorry. I may not be a complete expert in economics, but I know my ignorance enough to know I don’t have the answers for everyone. Do as thou wilt, an it harm none.
November 16th, 2006 at 10:48:23 pm
Uh, gahrie, have you ever read Friedman? I mean, I know a lot of people think he was a genius based on vague, anecdotal understanding of his work — but I would go farther than Casey and suggest that his theories almost *hung* on the negative income tax. And Friedman wasn’t a pure laissez-faire theorist; he understood as well as anyone that all things are never equal and that a totally unfettered market would eventually oppress the vulnerable.
Friedman was certainly a great mind and his ideas were extremely important; but they’ve been misunderstood, misused, and abused to the point where it seems like they’ve done more damage than good.
November 16th, 2006 at 11:19:35 pm
1) I have never suggested that Friedman believed in absolutely no government intervention in the economy.
2) If not Friedman who? Keynes? Marx?
November 17th, 2006 at 12:23:56 am
This is a hard argument, because far too often people use the term “free market� for things that are entirely unfree, like any time government and big business collude.
Friedman explains free markets rather simply, and brilliantly.
November 17th, 2006 at 2:13:06 am
I think we should be willing to recognize, and to salute for its Own sake, massive intellectual Candlepower even when we deny the pragmatic beneficence of its particular (well-intentioned) ideological Prescriptions for the world.
Accordingly let us say, a Kaddish for Milton Friedman: in memory of a great life lived with a rare brilliance, in the long generations whose Fame will go down; and now at last may he Converse bone to bone, with his Equal-and-Opposite number from the Previous era, Karl Marx, every bit as much the Genius and similarly just as Wrong.
November 17th, 2006 at 9:14:49 am
Milton Friedman was “just as wrong” as Karl Marx? Is there really no empirical data from history that sheds any light on whether one of these gents was more correct in his philosophy than the other?
November 17th, 2006 at 11:26:31 am
Joe Mama:
Not to those on the left.
November 17th, 2006 at 1:25:05 pm
Well since we have never seen Karl Marx theories actually put in practice no, i’d say we are missing evidence there. That said I don’t think Marxist communism would work, humans are too
A) lazy
B) greedy
November 17th, 2006 at 1:44:56 pm
To argue that the USSR, Red China, Cambodia (under Pol Pot) and North Korea are not representative of Marx’s theories is nonsensical.
Why does the left continue to drag out this canard in an attempt to defend Marx and communism?
The only basis for such a statement would also mean that no economic or political theory has ever been implimented.
The theories of Marx have directly led to the impoverishment, oppression and death of hundreds of millions of people.
November 17th, 2006 at 1:48:48 pm
[W]e have never seen Karl Marx theories actually put in practice . . .
If you’re going to be pedantic about it, then we haven’t seen Milton Friedman’s theories actually put in practice, either.
November 17th, 2006 at 2:01:27 pm
The WSJ’s take:
Capitalism and Friedman
The man who made free markets popular again.
Friday, November 17, 2006
There are some public figures whose obituaries can be written years in advance. Milton Friedman was not one of them.
Arguably the greatest economist of the 20th century, he won his Nobel Prize 30 years ago. His classic “Capitalism and Freedom� was published 44 years ago. He died yesterday at the age of 94, but as the op-ed running nearby attests, he was active in writing about, thinking about and explaining how economics affects our world until the end.
In today’s feature, he updates and re-examines conclusions he reached about the Great Depression in “A Monetary History of the United States, 1867-1960,� a book published with Anna Schwartz 43 years ago. His thesis was that the Great Depression was not, as was once commonly presumed, a “market failure,� but a failure of government policy. Contraction of the money supply in the wake of the stock-market crash of 1929 was what turned a financial event into an economic catastrophe.
This insight flowed from Professor Friedman’s conviction that “money matters.� As the Royal Academy of Sweden noted in announcing his 1976 Nobel, Friedman’s was a lonely voice in arguing for the importance of the money supply in economics when he began writing about it in the 1950s.
By the late 1970s, stagflation�the combination of high inflation and high unemployment�had made it obvious that the then-dominant Keynesian model had some large holes. These included the effect of the money supply on inflation and the fact that inflation and employment did not move in lockstep as some of Keynes’s disciples asserted. It was a seminal insight, creating what became known at the University of Chicago and elsewhere as the “monetarist school� and laying the intellectual basis for central bankers to break the great inflation of the 1970s.
In awarding its Nobel in 1976, the Royal Swedish Academy of Sciences cited his “achievements in the fields of consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy.� The citation covers a huge swath of economic thinking, and suggests both the range and the consistency of Professor Friedman’s thought. In layman’s terms, the Swedish Academy credited him with nothing less than shredding the Keynesian consensus.
First, he had shown that men are no fools. People spend money in accordance with their income expectations over the long-term, not in response to one-time “stimuli� from the government. This is known as the “permanent income� hypothesis, and it called into question Keynesian notions of how short-term stimulus affects the economy. In addition to his monetary insights, Mr. Friedman questioned the degree to which fiscal policy could be used to “fine-tune� the economy by adjusting spending, tax or monetary policy. Today we take for granted that all of these operate with a lag, but it was Milton Friedman who first highlighted the problem.
For all of his academic accomplishments, Professor Friedman’s role as a popularizer of free-market principles was arguably more important. He wrote a column in Newsweek for 18 years starting in 1966, preaching the importance of economic freedom to a generation that had never heard such things in school. His 1980 book, “Free to Choose,� was a best seller, and the videos that accompanied it were smuggled behind the Iron Curtain like seeds of revolution.
He was among the first to point to Hong Kong as a model of free-market success, a lesson that even today is remaking Communist China. And he first suggested educational vouchers to rescue failing public schools as long ago as 1955; in recent years, he established a foundation to support this idea that continues to advance despite ferocious opposition from unions and other entrenched interests.
This newspaper had the privilege of publishing Milton Friedman’s articles on numerous occasions over the years. We’ve also disagreed with him from time to time, notably on exchange rates and drug legalization. These disputes always gave us cause to reflect, and 20 years ago amid one debate on the benefits of fixed exchange rates we noted that “being spanked by Milton Friedman is one of life’s most humiliating experiences.�
In truth, Professor Friedman always argued with civility and a bracing wit. One of his best barbs on the size of government: “Given our monstrous, overgrown government structure, any three letters chosen at random would probably designate an agency or part of a department that could be profitably abolished.� And he popularized “There is no such thing as a free lunch.�
In “Two Lucky People,� written with his wife, Rose Friedman, who survives him as a distinguished economist in her own right, Mr. Friedman well described the role of a public intellectual: “We do not influence the course of events by persuading people that we are right when we make what they regard as radical proposals. Rather, we exert influence by keeping options available when something has to be done at a time of crisis.�
On the death of Ronald Reagan, whom he advised, Mr. Friedman wrote on these pages that “few people in human history have contributed more to the achievement of human freedom.� The same can and long will be said of Milton Friedman.
Copyright © 2006 Dow Jones & Company, Inc. All Rights Reserved.
November 17th, 2006 at 2:22:48 pm
Some great videos of Friedman here.
November 17th, 2006 at 2:33:29 pm
My three cents.
I kind of like the way Christopher Hitchens describes his ex-Socialism. That whatever fondness one might maintain for the abstract philosophy, no Socialist critique of Capitalism currently exists. The matter has been decided… empirically. This from a guy who says he feels his abandoned Socialism “like a missing limb.”
On the other hand, socialism (with a lower-case “s”) will be around as long as democracy is. A democraticaly defined and elected government will always have elements of socialism in it.
There’s a great Reason interview with Hitchens from a few years ago available here:
http://www.reason.com/news/show/28208.html
wherein he discusses the tension between libertarianism and socialism. At one point the interviewer asks “Many socialists have a radically anti-authoritarian disposition, even though the policies they would enact end up being authoritarian. What causes this divide?” Hitch’s answer is almost perfect.
———————–
I’m glad Casey brought Rand into the discussion, because even though I have a strongly libertarian disposition, I’m always ready for a little Rand bashing. That’s not necessarily a contradiction. Not all libertarians are Randians, as proven by Julian Sanchez, who calls her work “sophomoric crap.” I think libertarians who admire Rand above all tend to pick out the good parts about individualism and personal responsibility, and skip over the silliness and creepy cult of personality. When I first read Atlas Shrugged in high school, I thought it felt vaguely sinister, but didn’t really know how to put that feeling into words. It wasn’t until years later that I read the famous review by Whittaker Chambers and came to the line: ‘From almost any page of Atlas Shrugged, a voice can be heard, from painful necessity, commanding: “To a gas chamber â€â€? go!”‘ Yep, I thought, that’s it.
November 17th, 2006 at 2:41:40 pm
I’d say we’ve seen neither Marxian nor Friedmaniac :) theories ever put into practice in their Pure forms as Theorized by their respective Theoreticians.
However, we DO have empirical historical evidence regarding the real-world effects of “communism” as implemented (whose State somehow never Did get around to Withering Away :), and also of unfettered ~ OKOK, of very-Lightly-fettered :> ~ “capitalism” when Let to Do that which it Does (laissez faire) in said Unmitigated conditions. / Such data suggests to me ~ being of the very Soft Left meself, Joe Mama :> ~ that neither neomarxist Statism, nor paleofriedmanish Freedom, produced anything remotely resembling the greatest Good for the Greatest number.
Thus (hi Brendan :) did I say ~ in the context of admiring the Both of ‘em (which I tend always to Do, re Geniuses) (hi Dr. Mike :) ~ that ol’ Milt was “just as wrong” as ol’ Karl.
That Said, as They Say, I grant you that if forced to choose between Alternate Timelines of (a) living as a Proletarian wage-slave during the Industrial Revolution, or (b) dying in Country Joe Stalin’s Gulag or Chairman Mousey Dung’s ;> pogroms, I’d take me chances on the free-enterprise Factory floor, where a Union agitator like me would have at least a marginally better chance of getting Fired, than Shot.
:>
November 17th, 2006 at 3:01:16 pm
Good stuff, Aaron.
This video is a great explanation and defense of libertarianism from Friedman.
November 17th, 2006 at 4:50:18 pm
David - us computer geeks from the way-back-then when the PC was invented realise that the PC was invented in spite of Apple, rather than because of it … if Apple had been as positively formative as you would suggest, then why did the IBM PC take off as suddenly and spectacularly as it did ?
It was the success of the PC which forced Apple out of its complacency to where they again started developing their computers - and that, after Apple II and Apple IIe, led to the Macs in all their various incarnations - as responses to IBM snatching market share away from them …
I have one of the original IBM PCs … max 64K on the motherboard, couldn’t have a Hard Drive cuz the BIOS wouldn’t support it, cassette port and all … and it had two very significant improvements over the Apples of the time …
First, it could handle up to 640K of program - not the maximum 128K at which Apple had plateaued at the time …
Second, it was designed with a publicly-available Tech Ref manual and by then-standards comapratively cheap and easily available parts … not for elegance or efficiency or the élite, but for availability to Everygeek …
The IBM PC made PCs available to the masses, such that the masses could enjoy them for many purposes …
And what may be the most sublime part of the irony is that the IBM PC was not expected to be a signficant success by IBM at the beginning … it came out of a limited special program (whose exact title I no longer have on the tip of my tongue) and still managed to succeed way beyond anyone’s reasonable expectations …
November 17th, 2006 at 4:54:27 pm
Uh-oh. This is going to get ugly.
In other news, I wonder why the comment counter reset at 31? Weird.