Paul Samuelson Vs. Milton Friedman (A Debate)

Forbes ^ | Feb 20,2009 | Peter Robinson

[SeekAndFind]

Challenging Samuelson on Keynes, government intervention and market regulation.

"It is not enough that I should succeed," Gore Vidal once remarked. "Others must fail."

Economist Paul Samuelson evidently agrees.

A big government man from way back--in an edition of his best-selling college textbook Economics, he argued that "the remarkable fact is not how much government does to control economic activity, but how much it does not do"-- Samuelson, now 93, gave an interview not long ago. The current crisis, he claimed, validates his own economic views--and invalidates those of his longtime rival, the late free-market economist Milton Friedman.

"Today we see how utterly mistaken was the Milton Friedman notion that a market system can regulate itself," Samuelson said. " ... Everyone understands now, on the contrary, that there can be no solution without government. The Keynesian idea is once again accepted that fiscal policy and deficit spending has a major role to play in guiding a market economy. I wish Friedman were still alive so he could witness how his extremism led to the defeat of his own ideas."

An old man gloating that he has outlived an antagonist: If that were all there were to it, we could wish Samuelson well for the rest of his time here below and let the matter drop.

But Samuelson and Friedman represent two of the most influential economists in the history of the discipline. Samuelson won the Nobel Prize in Economics in 1970; Friedman in 1976. Samuelson achieved wide influence through Economics, still a popular textbook decades after he introduced it; Friedman through books such as Capitalism and Freedom, his column for Newsweek and his PBS television series, Free to Choose.

[misterrob]

Scanned it but I also added the RSS Feed to my collection

[driftless2]

If they’re honest, most big-government-loving Dems and libs would admit that their support for big government and their anti-free market ideas comes less from their purported hatred of an unfair system and more for their jealousy of people who have succeeded where they’ve failed. I’ve talked to too many Dems who have openly expressed their hatred for (in their minds) undeserving rich people. It doesn’t matter that they themselves are better off than most of the world’s denizens. They’re simply upset that someone has more than they do. And they wish to set things “right”. Now they have a president who is embarking on a socialist mission to do just that.

[driftless2]

"course in economics"

Were Adam Smith, Friedman, Hayek, or any other free-marketeers ever discussed in your econ class? They were never mentioned in the econ class I took in college...except negatively. I wonder if they're discussed in any college classes and how many econ profs are hard-core libs? It seems a very large percentage are.

[snarkpup]

Were Adam Smith, Friedman, Hayek, or any other free-marketeers ever discussed in your econ class?

Adam Smith was mentioned, but not any modern economists who knew what they were talking about. Instead, Samuelson's text was supplemented with a book by Galbraith. I had to discover Mises, Hayek and Friedman on my own years later.

The concept of supply/demand price-setting was mentioned; but I don't recall anything being said about prices being used as signals to regulate resource allocation in a system too complex for central planning.

I took the course during the Nixon-Ford malaise. This was a time when Keynesian economics was falling flat on its face. The professor suspected that, since Keynesianism couldn't explain what was going on, there might be something wrong with it; but he didn't know what it was. My impression was not that he opposed people like Hayek; rather, I don't think he was familiar with them. It didn't occur to him to question the Keynesian dogma that seeking the worst products and services at the highest price (i.e., government spending) was economically equivalent to seeking the best products and services at the lowest price (i.e., private spending).