This has been a week in which the world lost two giants, even if their fields were so different–Milton Friedman and Bo Schembechler. As I continue to honor these two legends here, tonight I am featuring a portion of an article by Brad DeLong from Salon:
His worldview began with a bedrock belief in people and their ability to make judgments for themselves, and thus an imperative to maximize individual freedom. On top of that was layered a trust in free markets as almost always the best and most magical way of coordinating every conceivable task. On top of that was layered a powerful conviction that a look at the empirical facts — a comparison, or a “marking to market,” of one’s beliefs with reality — would generate the right conclusions. And crowning that was a fear and suspicion of government as an easily captured tool for the enrichment of cynical and selfish interests. Suffusing all was a faith in the power of argument and the primacy of reason. Friedman was an optimist. He was convinced people could be taught the truths of economics, and if people were properly taught, then institutions could be built to protect society as a whole against the corruption and overreach of the government.
And he did fear the government. He was a conservative of the old, libertarian school, from the days before the scolds had captured the levers of power in the conservative movement. He hated any government intrusion into people’s private business. And he interpreted “people’s private business” extremely widely. He detested the war on drugs, which he saw as a cruel and destructive breeder of crime and violence. He scorned government licensing of professionals — especially doctors, who heard over and over again about how their incomes were boosted by restrictions on the number of doctors that made Americans sicker. He abhorred deficit spending — again, he was a conservative from another era. He feared that cynical politicians could pretend that the costs of government were less than they were by pushing the raising of taxes to pay for spending off into the future. He sought to inoculate citizens against such political games of three-card monte. “Remember,” he would say, “to spend is to tax.”
This did not mean that government had no role to play. He endorsed the enforcement of property rights, adjudication of contract disputes — the standard and powerful rule-of-law underpinnings of the market — plus a host of other government interventions when empirical circumstances made them appropriate. Sometime empirical circumstances could win Friedman some unexpected allies. Left-wing Mayor Ken Livingstone’s congestion tax on cars in central London is an idea straight out of Milton Friedman. Friedman’s negative income tax is one of the parents of what is now America’s largest anti-poverty program: the earned-income tax credit, which was greatly expanded by Bill Clinton. And, most important, government had a very powerful and necessary role to play in keeping the monetary system working smoothly through proper control of the money stock. If there was always sufficient liquidity in the economy — enough but not too much — then you could trust the market system to do its job. If not, you got the Great Depression, or hyperinflation…
Friedman’s thought is, I believe, best seen as the fusion of two strong and very American currents: libertarianism and pragmatism. Friedman was a pragmatic libertarian. He believed that — as an empirical matter — giving individuals freedom and letting them coordinate their actions by buying and selling on markets would produce the best results. It was not that he thought this was a natural law. He didn’t believe that markets always worked best. It was, rather, that he believed that places where markets failed were atypical; that where markets failed there were almost always enormous profit opportunities from entrepreneurial redesign of institutions; and that the market system would create new opportunities for trade that would route around market failures. Most important, his distrust of government told him that government failure was pervasive, and that any expansion of government beyond the classical liberal state would be highly likely to cause more trouble than it could solve.
For right-of-center American libertarians, Milton Friedman was a powerful leader. For left-of-center American liberals, Milton Friedman was an enlightened adversary, and one whose view is now ascendant. We are all the stronger for his work. We will miss him.
