On Milton Friedman’s Passing

It’s rather fitting that economist Milton Friedman died today of heart failure. The man didn’t have much of a heart to begin with, unless you count an almost total concern with keeping money in the hands of the rich as a bona-fide conviction.

Friedman was quite adamant on this point, so staunch that he insisted that the government should keep its hands out of private industry. Wage control? Price control? Not for Friedman. The economy was a buckling bronco that could stay in its own turf without so much as a guardrail, thank you very much. It wasn’t a surprise when he fawned over the Gipper (one of his many employers) when the Grand Old Man kicked the bucket, writing:

To Reagan, of course, holding down government spending was a means to an end, not an end in itself. That end was freedom, human freedom, the right of every individual to pursue his own objectives and values so long as he does not interfere with the corresponding right of others.

For a guy who railed against the evils of socialism (even referring to Nixon’s 1971 90 day wage and price freeze as “socialist“), this libertarian notion seems just as naive in its inability to account for the devilish impulses of human nature. What was human freedom for Friedman? In a lecture Friedman delivered in 1991, he compared human freedom’s essence to that of a free private market, calling it “the freedom of people to make their own decisions so long as they do not prevent anybody else from doing the same thing.” This would all be very nice if we assume that human freedom is always benevolent. But who sets the standard for these freedoms? What one person may consider non-preventive freedom is likely to be very harmful to another. Particularly when we consider export processing zones, sweatshops, Wal-Mart overtime, and our current unchecked spending spree in Iraq. Of course, if you subscribe to the Friedman philosophy, I suppose you can look the other way. I suppose you can look to the Jack Welches of the world as great captains of industry who fulfill their own objectives and values. Perhaps 100,000 layoffs in four years, the economic equivalent of the Great Purges, doesn’t interfere with another businessman’s “objectives and values.” But it certainly harms a lot of individuals and families in the name of profit. The Friedmanite will argue that the worker deliberately entered into an arrangement with his employer and should have seen what was coming. But what of the worker’s right to pursue her objectives and values?

For Friedman, inflation was the great Beelzebub. When things started to go batty during the 1970s stagflation, Friedman challenged the Phillips curve, that delicate elliptical sliver which correlated the unemployment rate with inflation. He argued that there is only a short-term relationship between employment and inflation and that unemployment shoots up the minute that workers become cognizant of their true wages, the amount of money they can actually spend, in relation to the economy. But this position assumes that all workers have bargaining power and that all workers are in the position of being selective about their vocations. The real world, not so easily plotted on an Excel spreadsheet or tracked with the slide of abacus beads, doesn’t always work this way.

Nevertheless, in all fairness, while Friedman was firmly against wage and price control, he did support the New Deal relief and recovery programs, in large part because the Great Depression was, in his words, “a very exceptional circumstance.” Perhaps this was because, in part, Roosevelt’s policies allowed him to get a job when he was unable to find an academic position. Or perhaps even Friedman had to confess that the free market economy wasn’t always perfect.

Friedman authored the 1970 essay, “The Social Responsibility of Business is to Increase its Profits,” in which he wrote:

The shortsightedness is also exemplified in speeches by businessmen on social responsibility. This may gain them kudos in the short run. But it helps to strengthen the already too prevalent view that the pursuit of profits is wicked and immoral and must be curbed and controlled by external forces. Once this view is adopted, the external forces that curb the market will not be the social consciences, however highly developed, of the pontificating executives; it will be the iron fist of Government bureaucrats. Here, as with price and wage controls, businessmen seem to me to reveal a suicidal impulse.

When considering Friedman, one does not often consider such “suicidal” values as empathy, a concern for humanity, or even a sense of wonder (save perhaps that all-seeing eye on the dollar bill). One does not consider duty, except as it pertains to earning the maximum profits possible for the employer. One does not consider an economic system that provides safeguards against greed, corruption, and providing welfare for the vanquished. One considers the free market and only the free market.

Only a nation so inexorably concerned with the accumulation of capital could have produced a figure like Friedman. Certainly, there will be many obituaries who will laud his genius. But I’m wondering if any of them will remark upon Friedman’s lack of empathy for those who weren’t free market acolytes. I’m not entirely against capitalism, but it feels unjust to praise a man who believed so whole-heartedly in an unfettered free market, but who couldn’t even come close to a plausible correlation between the economy and humanism.

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2 Comments

  1. “this libertarian notion seems just as naive in its inability to account for the devilish impulses of human nature.”

    I think you’re missing the libertarian point here: it is precisely because of the devilish impulses of human nature that State is to be rejected. For what is State but the main tool of people who crave for power. The Bush administration is a case in point here…
    The “control” means do exist in a libertarian dreamworld, but this is a little bit too complicated to get into here -and it’s definitely not limited to market tools, and I doubt you’d be interested in that naive utopia.
    What you are also forgetting is that Friedman was not only ranting about economical freedom, see also his opposition to drugs control – because he thought that the State had no business sending people to jail or searching houses for things like marijuana.
    Not willing to start a polemic here, just giving a little more info.

  2. He may have erred on the side of too little regulation, but at least Friedman admitted that the market was not always the best solution– he didn’t have the near-religious faith in the free market that a lot of other folks do.

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