Milton Friedman has died at the age of ninety four. Others will list the vast number of honours that he achieved in his life time and will speak of him as a husband, father and friend.
I remember Milton Friedman from my youth via the mainstream media, because he belonged to a time when it was still possible (although difficult) for a free market thinker to have large scale exposure in the mainstream media. I remember the interviews, I remember the television series (Free to Choose – and the book of the same name being in every bookshop and library in the land), and I remember the articles in Newsweek magazine.
Milton Friedman replaced Henry Hazlitt, but he was given an article only every two weeks (Hazlitt had a weekly spot), These days of course it would be almost unthinkable for a free market thinker to be given such space in a main stream magazine – and it is not really a question of modern free market folk being inferior writers to Professor Friedman (it is the message that is no longer tolerated, not a higher standard of writing that is demanded).
If ‘conservative’ voices are heard in the mainstream media it is more likely to be voices like that of President Bush who was speaking today (in Singapore) – the normal confusion of ‘freedom’ with ‘democracy’ and the normal promises of aid from the Western taxpayer to various governments in return for these governments ‘investing in people’ (“schools ‘n’ hospitals” and the rest of the standard speech).
Milton Friedman refused to meet President Bush, perhaps this was intolerant of him (for all I have written above President Bush is not a bad man and he means well), but Professor Friedman’s argument was that as he had tried for eight years (during the Reagan Administration) to explain the basic concepts of liberty to George Herbert Walker Bush, to no effect, he was not going to waste what little remained of his life talking to the son.
As for Milton Friedman’s message I (and many others) could argue over many matters. Were “right to work” statutes (i.e. bans on the closed shop) really bad things (as Professor Friedman believed) or were they a counter weight to pro-union laws (as some of us political folk believed)? Was the ‘negative income tax’ really a good way to save people from poverty, or would it lead to people not working if they could not find a good job? Were education vouchers a way of combining freedom in education with support for poor parents, or would they corrupt private schools?
The arguments were endless, but they (by all accounts) tended to be debates conducted in a good spirit – and Milton Friedman always at least held his own in debates (against anyone). Also one could trust Professor Friedman not to say something really stupid. Murry Rothbard may have been from the school of economics to which I am more sympathetic (the Austrian School), but he (and so many other of my fellow libertarians) could never be one hundred per cent trusted not to say that the IRA were “defenders of freedom”, or that the United States was conducting an imperialist war in Vietnam (the communists not really being communists or whatever) or some other really stupid thing (I am not saying that Ulster being in the United Kingdom is a good deal for the British taxpayer, or that Vietnam was a good place to fight communism – but this is not the sort of attack that one got from Murry Rothbard or many other radical libertarians, their position was much too close to that of the left “the West is evil, the enemies of the West are good”).
Milton Friedman might argue many things with which I might not agree, but there was never a fear of something moronic coming out of his mouth.
One can regret (I do regret) that Professor Friedman’s work often seemed to have so little political effect. For example, he exposed the scam of medical doctor licensing more than half a century ago (and so many other cost raising regulations that do not “protect the consumer”), but such scams continue stronger than ever (and the costs that such regulations produce is used as an excuse for demands for such things as government health care), but one could never fault Milton Friedman for not fighting the good fight – for example in trying to spread the truth that if an organization is really just concerned with standards of care it will not (as the American Medical Association always did) spend so much of its time on political activity designed to keep down competition (regardless of the real level of qualifications among potential medial practitioners).
Lastly there is the ‘big question’ – at least the big question to those interested in the debates between the Chicago School (of Milton Friedman and others) and the Austrian School (of Ludwig Von Mises and others).
Are busts caused by a decline in the money supply (as Milton Friedman taught) or is the previous credit money boom the bad thing that leads to the bust (as Ludwig Von Mises taught).
Or, to put it another way, is “inflation” a rise in the “price level” (as American economists have taught since at least the 1920’s) with a “stable price level” being the goal of policy, or is “inflation” a rise in the money supply that will cause damage even if there is no general rise in the price of goods in the shops (as Mises and the Austrian School taught and teach).
I will certainly not attempt to give a solution to the “big question” here (even if I was crazy enough to think that my opinion mattered to the great thinkers involved in the debate). But I will point out one thing.
Milton Friedman, in the latter years of his life, moved towards a practical political solution of the great question. He did not move his position in economic theory, he still held that it would be nice if government expanded the money supply so that prices did not generally fall over time. However he came to the conclusion that government could not be trusted to expand the money supply in a regular and moderate way.
Once allowed to expand the money supply government, in practice, would act in a chaotic and expansive way – so it was better if government did not have this power.
Milton Friedman did not support the gold standard (or any other commodity money), but he did support the “freezing of the monetary base” – i.e. that government no longer be allowed to expand the fiat money supply.
Of course banks and other financial institutions might still play some dangerous games on top of the supply of fiat money – but that would take us into complex matters, and if it was clear that government would never back up the credit expansion of private financial insititutions perhaps even arch reactionaries who believe that all lending should be financed one hundred per cent by real savings (stone age folk like me) would be at least half satisfied.
Milton’s book Free to Choose was the item that coalesced my thoughts, and pointed me in the right direction. Before that i had been an oddball (probably still am if honest), I was no where near as nationalistic as one section of my friends and contempories, but repelled by the socialists et al.
Reading free to choose set me off on the trail of other freedom lovers, Rand, Hayek Mises, etc.
As for the big question and the gold standard, started as a monetarist so struggle to be 100% behind money even when it seems the best option
It is a disgrace that Milton didn’t even figure in the recent poll for the top living thinkers
The Guardian is running a poll.
The question is
Was Milton Friedman a benefit to humanity.
When I took it, 55% said he wasn’t.
We have a long way to go folks!
steves, your intellectual journey sounds remarkably similar to mine. I read Free To Choose in my mid-teens. Before that, I had not much interest in anything about public affairs – I was your typical kid, becoming interested in girls and in love with sports although with bookish leanings – but Friedman’s clear, intelligent take on the world made me sit up and take notice. From then on the floodgates opened as I went to university: Hayek, Mises, Rand, Rothbard, A. Smith, Hume, etc. Friedman gave me the keys.
For some reason, I was never attracted to JK Galbraith’s writings.He came across as a sneering smart-ass, while Friedman, the son of humble Jewish immigrants, had a mixture of humility, identification with the ordinary Joe, intellectual brio and sparkle that really appealed to me.
I agree with Johnathan Pearce, I had the same impression of J.K. Galbraith – a man uninterested in reason. Milton Friedman’s friendship with Galbraith was an odd thing to me. But then Professor Friedman tried to see the best in people, take the example of Richard Nixon.
President Nixon was a liar who promised a free market policy and then spent money like it was going out of style, he also created vast new executive agencies that imposed a great web of regulations on many aspects of American life (and, of course, he ended up imposing wage and price controls on top of this).
But Milton Friedman endlessly tried to reason with him and said that he was nice to talk to and had a good mind………
Perhaps this was part of why Professor Friedman was such a good teacher – he hated to give up on people. Although (of course) in the end politicians even wore out Milton Friedman’s tolerance.
On the “gold standard” I have always thought it an unfortunate term as it implies that the commodity (in this case gold) is the “base” or “foundation” of the money, rather than (as should be the case) the money itself – but this would lead us into various matters.
As for the Guardian folk. No doubt they will be chatting about the speech Milton Friedman made to a private association in Chile about the control of inflation – as this speech was made at the time of the military dictatorship all the sins of the dicatorship where somehow (according to the leftists) Professor Friedman’s fault.
Milton Friedman pointed out that he made the same speech on a trip to the People’s Republic of China (and was a guest of the government – there being no private assocations in China at the time) at the time when the Chinese Communists were murdering millions of people.
Oddly enough none of the leftists ever complained about Professor Friedman speaking in the People’s Republic of China.
Do you ever wonder why British train fares are the highest in the world? Or why gas and electricity bills now take up such a large part of ur incomes? Or why the gap between rich and poor just keeps getting wider and wider? Or why British manufacturing industry no longer exists?
Might it have something to do with us being stupid enough to vote for politicians who admired Milton Friedman?
Many people scream about this but what does it really mean? If the poor can sustain themselves, why does it matter if there is a wide gap?
Never having read any of the great man’s works before (always assumed they’d be incomprehensible), I have just honoured him in death by buying ‘Free to choose’.
I was converted by other factors – people, the Alternative Bookshop, the experience of working for the Inland Revenue, ‘The welfare state we’re in’.
Put the red rag away Neil.
Like bulls, we’re all colourblind round here.
Do you ever wonder why British train fares are the highest in the world? Or why gas and electricity bills now take up such a large part of ur incomes?
I always find it strange when people try to highlight the faults of a free market by highlighting faults with markets which are most definitely not free. Normally this is a clear misunderstanding of assuming private companies = free market.
RAB: I have just voted “yes” in the guardian poll, but it has already slipped to 38% yes, 62% no. Our work never ends!
Free to Choose will be going on my Amazon Wish list. I must admit that I am grateful to Samizdata for the number of interesting and enjoyable books and articles it has pointed me towards. Thanks guys.
“Oddly enough none of the leftists ever complained about Professor Friedman speaking in the People’s Republic of China.”
Oddly enough? No. Naturally.
By the way:
Chile was the country that adopted almost to the letter Friedman’s theories and policy recommendations.
Chile carried out the most radical, deep and far reaching free market reforms. It was done by Friedman’s students, Chilean economists, alumni of the U. of Chicago.
It was a stunning, fantastic success.
Is this the same Neil Clark who has championed the likes of Slobbo of Serbia? Is this the man still in mourning for the demise of the Soviet Union, the same man whom Stephen Pollard has relentlessly rubbished on his blog?
Neil, you are an idiot. Commuter usage of trains actually rose after the system was privatised, although it was not privatised in a way that got the most competitive pressures working. As for the gap between rich and poor, the gap may have expanded, but if opportunities to rise up the ladder have also risen, then that will ameliorate such concerns. In a static economy of the sort Neil Clark favours, inequality is a problem. It is not a problem if the economic pie keeps expanding.
Here endeth today’s economic lesson. Neil, see me after class for additional homework.
With respect, Jonathan, you are the idiot. Spend some time living in continental Europe and travelling on their state-run public transport and then come back to Britain, where we pay far more for far less.
Perhaps you could also explain what model of railway privatisation you would have preferred? The model we got was the one recommended by the Adam Smith Institute, whose ideas I thought you would have approved of.
This is the story that Friedmanites tell and retell. It’s a shame it isn’t true. From 1973 through 1990, the years when the Chicago gang ruled Chile’s economy with a free hand, real growth per capita in Chile averaged 2.16%. In the rest of the region, it was 3.15%. Growth in Chile between 1960 and 1972 averaged 4.16%–in other words, the “fantastic success” of the Chicago schoolers consisted in growth a full two percentage points less than in the previous 12 years. That may count as “fantastic success” for the faith-based economics of the Friedman school, but here on planet reality, where people have to put food on the table and a roof over their heads, it’s considered something less than a miracle. Friedman himself, in later years, claimed that his references to the “Chilean miracle” had to do with political, rather than economic developments.
Mr. Sherman,
You have not the slightest idea of what you are talking about. You probably read some leftie nonesense in some paper and just repeat it.
I have lived for a while in Chile. Chile is now the most succesful country (economically) in Latin America.
Go and read more about it.
No Neil, the idiocy is all yours. If rail fares in Europe are “cheap”, that is usually because the train services are massively subsidised by the state, as is the case with those sleek TGV trains in France. That subsidy comes out of the pockets of heavily-taxed French workers. France, remember, is the country that has operated tolls on its sleek autoroutes for years — straight out of the Milton Friedman handbook on road pricing.
Neil, perhaps you should also reconsider about your statement that water, gas and other utilily bills have got more expensive since these sectors were privatised. Again, have you adjusted those costs for inflation? Have you taken account of the long period of shocking under-investment in these services for many years until recent years?
As for your line about the wipeout of British manufacturing industry, several points: in the rich industrialised world, manufacturing has declined relatively speaking as a share of national output, as activity has moved from low-value, mass production to higher-value, bespoke production activities and services such as finance, software, and so forth.
British manufacturing suffered terribly in the early 80s, and much of the blame has to be pinned onto the disastrous mix of high regulation, high taxes, crippling union privileges, incontinent monetary policy and a disdain for business that are all features of your socialist economic beliefs, Neil. When Mrs. T. turned the monetary screws on to kill double-digit inflation, it was inevitable that parts of the UK economy got hammered. But the fault was not hers or Friedmans: it was the fault of the idiotic economic policy mix we had imposed upon ourselves since the War.
Here endeth today’s economic lesson. More homework Neil, more!
Neil, for some reading, here is what the ASI has to say about what actually happened(Link) when the UK rail network was sold off. Hardly a model of laissez faire.
Neil Clark claims that British railways are private, this is not true. Network rail is not privately owned (although Mr Brown does try and keep its spending off the government’s books – as one of his Enron style accounting tricks).
British railways were built by private enterprise and only started going into decline when regulation became terrible (after 1906) it was not the new technology of cars than led to decline of the railways (although the policy of “free” roads did not exactly help – and has proved to be an environmental mess) it was the regs – not just the pro union act of 1906 (which built on that of 1875) but specific railway regulations that might have been designed (and knowing something the “New Liberalism” may well have been so designed) to undermine the private companies.
As for “privitization” Mr Major (of all people) seems to have wanted to really do this – but sadly (partly thanks to an E.U. directive) we got division of track and train, “you only get to run services for a few years” and lots of other nonsense.
And then, of course, Railtrack was private for a very brief period anyway – before it was renationalized (something Neil Clark seems to be unaware of).
I repeat that private ownership can not be at the root of the problems of the railways in Britian – because they are not privately owned.
As for British manufacturing industry. Milton Friedman warned for decades against the taxes and regulations that were destroying this.
James Prior (and the other trash who Mrs Thatcher choose to put into key positions after 1979) choose NOT to reform the labour market, nor to reduce taxes or government spending.
The “free market” government that came in 1979 is the greatest myth of recent British history.
Look at what happened in terms of tax increases, government spending increases and (yes) money supply increases after 1979 and what did not happen in terms of deregulation (oh yes exchange controls were got rid of – but the important stuff that was promised?) – all this shows the truth.
It was only after the 1983 elections that was any real move away from the mess of the first few years (especially when “free market” Howe left the Treasuary, and Norman Tebbit started to do some reform at the Department of Employment).
But then (after 1986) we got first the Single European Act (which allowed Euro regulations to pick off vast numbers of small British manufacturing enterprises in ways that Mr Booker has pointed in many books and articles simply do not happen to anything like the same level in the rest of the E.U.) and then the Lawson money supply boom.
This was where Mr Lawson decided that Milton Friedman was wrong and issing endless more credit money (in order to try and rig the exchange rate to the D. Mark) would do a lot of good. People are so misinformed that they blame “boom and bust” on the “Lawson tax cuts” (the tax rate cuts that one of the few good things that the Thatcher government did) rather than the money supply expansion.
Politicians that followed Milton Friedman, Neil?
There is a big gap between speeches saying what a nice man he was and following Milton Friedman’s line on POLICY.
And I write as a man who is not a Chicago school person anyway – I am Austrian school man. But I still understand that trying to blame Britian’s problems on Milton Friedman is false.