Wednesday, April 23, 2014

A Century of Milton Friedman

Milton Friedman

Today marks the 100th anniversary of the birth of Nobel Prize-winning economist Milton Friedman, who played an indispensable role in making the case for market freedom and individual liberty in the latter half of the twentieth century. It is no exaggeration to say that his efforts positively affected the lives of tens or even hundreds of millions of people, and that if governments had listened to him and others like him, even more people would have benefited and many economic and social disasters averted.

Writing in today’s Wall Street Journal, economist Stephen Moore summarizes the achievements of this intellectual giant. It is well worth reading in its entirety. One of the most important observations Moore makes is  that Friedman—like all principled advocates of truly free markets—stands up for the individual and in particular the politically powerless, as opposed to the caricature of pro-market economists as favoring big money (a canard cast with great abandon by statist forces in recent years):

Friedman stood unfailingly and heroically with the little guy against the state. He used to marvel that the intellectual left, which claims to espouse “power to the people,” so often cheers as states suppress individual rights.

This is an important and indeed essential observation. Readers of Friedman’s influential book Free to Choose or the PBS TV series based on it (both most highly recommended!) will note how often he refers to government policies’ deleterious effects on the poor, small business owners, and the working classes. Friedman exemplified the generous spirit behind the desire for free markets: they benefit the less-wealthy by leveling the playing field, allowing people to succeed on their merits instead of through political power bought with big money. Friedman had nothing but contempt for crony capitalism and the use of government to suppress market competition, although he was too polite and good-natured to express that feeling in any way but through sound economic arguments.

Moore describes this aspect of Friedman’s character well:

By the way, he rarely got angry and even when he was intellectually slicing and dicing his sparring partners he almost always did it with a smile. It used to be said that over the decades at the University of Chicago and across the globe, the only one who ever defeated him in a debate was his beloved wife and co-author Rose Friedman.

Friedman’s demeanor in the debate segments of each of the PBS Free to Choose episodes demonstrates the man’s equanimity and his confidence in his arguments and observations, as well as his faith that people who are allowed to make voluntary agreements in a free market will prosper better than those directed by the heavy hand of government.

This generous spirit was also evident in his social values, which were correctly characterized as libertarian. Moore notes Friedman’s ability to see right to the heart of things in this regard:

He supported drug legalization (much to the dismay of supporters on the right) and was particularly proud to be an influential voice in ending the military draft in the 1970s. When his critics argued that he favored a military of mercenaries, he would retort: “If you insist on calling our volunteer soldiers ‘mercenaries,’ I will call those who you want drafted into service involuntarily ‘slaves.’”

Also flowing from that generous spirit was Friedman’s idea for school choice, which has finally begun to gain real traction after more than a half-century of advocacy begun by Friedman and taken up by followers on both the left and right in recent years. Realizing that government almost never does anything better than freely choosing individuals can do, Friedman advocated an elegantly simple solution: that schools be required to compete for students. As my Heartland Institute colleague Joy Pullmann notes in The American Thinker, school choice became a passion for Friedman:

Friedman frequently compared public schools to monopolies like Ma Bell and the U.S. Post Office.  Monopolies vaporize freedom and opportunity. . . .

Monopolies rely on force to control customers; if they didn’t have that option, they’d lose those customers. In a competitive environment, by contrast, a school would survive only by offering something good people want, attracting rather than forcing them through the doors. . . .

Kids attending the rotten schools, or stuck with a rotten teacher, are just out of luck.  They usually have no opportunity to choose something better, which several economists have recently demonstrated leads to hundreds of thousands of dollars in lost income for these students and trillions in lost economic output for the nation.

These strangled students are disproportionately poor and minority.  No wonder huge majorities of these groups love school choice.

Friedman’s vision of school choice for all is the most liberating, equitable education policy available.  His 1955 flash of voucher inspiration might be best described with a 1970s slogan: “Power to the people.”

The foundation that bears Friedman’s name, in fact, is devoted to school choice. Friedman’s advocacy of school choice is emblematic of his understanding that free markets do the most good for those who have the least.

Of course, those who advocate ever-bigger government and the centralization of all political, economic, and social power into a small elite (what Jonah Goldberg calls Liberal Fascism) under the false flag of compassion continually attempted to mischaracterize Friedman, trying to blame him for the wrongs businesses do in collusion with government, the very thing of which he was most critical. Moore cites a recent example:

No doubt because of his continued popularity, the left has tried to tie Friedman and his principles of free trade, low tax rates and deregulation to the global financial meltdown in 2008. Economist Joseph Stiglitz charged that Friedman’s “Chicago School bears the blame for providing a seeming intellectual foundation” for the “idea that markets are self-adjusting and the best role for government is to do nothing.” Occupy Wall Street protesters were often seen wearing T-shirts which read: “Milton Friedman: Proud Father of Global Misery.”
The opposite is true: Friedman opposed the government spending spree in the 2000s. He hated the government-sponsored enterprises like housing lenders Fannie Mae and Freddie Mac.

Moore summarizes the great effect of the work of Friedman and others who brought free market principles back into favor toward the end of the twentieth century:

In a recent tribute to Friedman in the Journal of Economic Literature, Harvard’s Andrei Shleifer describes 1980-2005 as “The Age of Milton Friedman,” an era that “witnessed remarkable progress of mankind. As the world embraced free-market policies, living standards rose sharply while life expectancy, educational attainment, and democracy improved and absolute poverty declined.”

Well over 200 million were liberated from poverty thanks to the rediscovery of the free market. And now as the world teeters close to another recession, leaders need to urgently rediscover Friedman’s ideas.

Those of us who share Friedman’s generous spirit celebrate his long and productive life today, and we hope that this century will truly be a century of Milton Friedman.

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