Skip to comments.101 Years Later, Milton Friedman is Still Wrong
Posted on 08/06/2013 10:21:57 AM PDT by DannyTN
Wednesday was the 101st anniversary of Milton Friedmans birth, and it will be widely celebrated among the vast number of Americans who march in Tea Parties and wear tricorner hats in public. He will be hailed by the vast number of libertarian populists now burgeoning within the Republican ranks. But the new libertarian populism is increasingly at odds with the possibility of a shared future.
Libertarian populists love markets. One of their favorite proposals is privatization: If there is a problem, they look to markets to solve it. Milton Friedman wrote, The most important single central fact about a free market is that no exchange takes place unless both parties benefit. The statement fails to take into account that parties can only perceive potential benefits and, in the case of poor workers, may be unable to find the optimal market exchange. But there is a deeper problem.
The problem is that markets, being amoral, are necessarily immoral. Markets are essentially utilitarian, they maximize happiness, and each individual is free to choose what makes him or her happy. But what happens when one mans pleasure harms another? As E.F. Schumacher writes, Call a thing immoral or ugly, soul-destroying or a degradation to man, a peril to the peace of the world or to the well-being of future generations: as long as you have not shown it to be uneconomic you have not really questioned its right to exist, grow, and prosper. That is, as long as companies can make money drilling into Canadas tar sands, who are we to question them?
Schumacher notes the core libertarian dilemma: The market is the institutionalization of individualism and non-responsibility. Neither buyer nor seller is responsible for anything but himself. But as a society, we want people to be free from slavish impulses and appetites and we want them to be responsible. We raise our children to love their country, to protect their environment, to aid their community. We tell them not to steal, never to hurt another human being, and to generally live in such a way that if everyone else also lived in that way, the world would be a better place. But, as G.A. Cohen notes, the immediate motive to productive activity in a market society is (not always but) typically some mixture of greed and fear. That is, upon taking on their first job, we tell our children, Throw away all that stuff we taught you; now all that matters is profit and loss."
This creates one of the contradictions of capitalism: How long can a liberal democratic society (which relies upon cooperation, mutual interdependence, and shared sacrifice) exist alongside a purely capitalistic system (which relies purely upon self-interest)? How long can markets crowd out all instances of social virtue before we descend entirely into chaos?
The libertarian reliance on pure self-interest is nowhere more clear than in the ideas of Ludwig von Mises, who developed Praxeology, the idea that all human action can be explained by self-interest. Milton Friedman accepts this proposition, stating in Free to Choose, The problem of social organization is how to set up an arrangement under which greed will do the least harm, capitalism is that kind of a system. The problem is that greed and self-interest are not the exclusive, or even primary, human motivation. We know that soldiers jump on grenades to protect other soldiers. We know that John McCain chose to spend four years in the Hanoi Hilton rather than violate the Code of Conduct for Prisoners of War. We know that Mohamed Bouazizi set himself on fire rather than face the harassment of police.
Of course, weve all heard the inevitable response: Theyre upholding some other value, they hope for gain in a future life, etc. The problem with this response is that eventually, once you keep pressing, libertarians provide a tautology: Self-interest is whatever motivates us to act. Well, then, we are clearly really bad at defining our own self-interest. Libertarians face a double bind: Either their definition of self-interest is wrong (because people act for things other than self) or its tautological (because every action is self-interested). Either way, they severely confine human motivation for action.
The only way to solve these problems is to understand the individual within his or her society and that societys mores. But libertarians have to reject the most important forms of community because these organizations familial, local, national, religious are not voluntary organizations, but are considered coercive. In a day and age when the rich live a life separate from the rest of us and when our use of fossil fuels endangers the lives of poor people across the globe, such an individualistic mode of thinking is not only wrong, but dangerous.
Its important to recognize that some libertarian populists also engage in a core hypocrisy: capitalism for the poor, socialism for the rich. They want to block-grant Medicaid and cut taxes for the wealthy. They want to cut food stamps but not necessarily farm subsidies. Theyll cut the minimum wage but extend the carried-interest deduction. And they say things like, Keep the governments hands off of my Medicare.
While Friedman was at least consistent enough to despise all government programs, the Tea Party wants to protect a few: the ones they benefit from. They excitedly adopt his starve the beast approach to government spending, but also gobble up government resources. Libertarian populism is the old supply-side garbage, as John Kenneth Galbraith noted, that the work habits of the American people are tied irrevocably to their income, though in a curiously perverse way. The poor do not work because they have too much income; the rich do not work because they do not have enough income. You expand and revitalize the economy by giving the poor less, the rich more. The Tea Party is selfishness embodied: Government should help me, but not you! Im a maker, you are a taker! Some of us still envision a society where compassion and cooperation are valued, rather than callous competition alas, that seems as far away as ever.
No it's not - it's not just wrong, it's wildly, crazily wrong. The only criticism that's valid is of what the writer calls "libertarian populists" (which is something of an oxymoron); he seems to be describing what is more frequently called crony capitalism, which deserves to be loathed but has little in common with libertarianism.
Friedman was right. About pretty much everything.
Boy, there sure is a lot of Alinskyite squawking going on about libertarians/libertarianism lately. Sounds like some establishment-types are getting scared.
Yeah, I stopped taking this op-ed seriously after reading the headline.
This author also lumps together Conservatives & Libertarians. They aren’t the same.
Friedmann(sp) is more right than Liberal economists who have a record of failure. Capitalism works all the time.
Huh? This guy is full of beans. I don’t consider myself to be a libertarian in many respects, but they are correct about people acting in their own self-interest. Everyone does, from Donald Trump to Mother Teresa. People do what moves them. Libertarians are all in favor of family and community groups and activities.
He is right, though, about some Tea Party people who still want their own government programs funded. That is why government spending will never decrease until we are in a real crisis. Just ask “conservative” farm state Republicans how they fell about farm subsidies.
I suppose this guy thinks that nobody ever does anything good unless government forces him to do it. As Mencken said, “The urge to save humanity is almost always a false front for the urge to rule.”
I spent a week with Milton and Rose Friedman in the early 90’s. Nothing in the screed above has anything to do with the man. Oh, and Milton Friedman was right about nearly everything. Between he and his lovely wife Rose, together they pretty much had all the bases of a wonderful life covered.
"markets" really mean NO gov't regulation/interference with individual choices.
That article is a good example of attacking a strawman. It misrepresents libertarians in general and Friedman and Mises in particular.
But I suspect that these misrepresentations are not deliberate but come from the author’s own ignorance.
Praxealogy is not “the idea that all human action can be explained by self interest.” Nor did Mises even believe that.
Anyone who’d made even a cursory reading of Mises’s work would not have made that mistake.
The author gives away his socialist POV early in the article.
I don't want the "shared future" desired by socialists in which we are all nameless, faceless drones whose only motivation is to slavishly serve the state. Screw this idiot.
God bless Milton Friedman. May he rest in peace.
Sounds like statist tripe, “we know what’s best for you”
The writer has no idea of libertarian views...............
Shovels, being amoral, are necessarily immoral. If your brain accepts that logic... you might be a leftist.
Actually the whole problem with free markets comes when some of the players figure out it is easier to just bribe the government to tilt the table in their direction than to continue with the competition.
The author is wrong is saying capitalism is immoral. Individuals take immoral actions, the system, he correct stately, is amoral.
While he points out ages old hypocrisy of demanding change for others, and not one self, it really has nothing to do with Milton Friedman.
Face it, human nature is motivated by self-interest. It can’t be replaced by government, but only restrained by religion and morality.
The whole problem with free markets is commies can’t navigate them.
"Shared future"? Right, they mean "shared misery", typical Commie gobbledygook.
So let's pick our masters who can dictate the use of resources more wisely. Riiiiight.
Friedman makes more sense than anyone. Detroit is a great example of a liberal laboratory gone crazy.
I think they are afraid the NSA and IRS scandals are such that there is a real chance they could be shut down. Imagine the blow the loss of the surveillance-state would be to the statist; imagine how the push for real tax-reform would obliterate the current power-structure.
Yes, I think they are getting scared.
I got that from reading the article that the writer was confusing economic freedom and free markets with crony capitalism.
In the writers vast confusion,he also believes that supporters of economic freedom believe you have the right to harm others as long as it means profit, which is simply not true.
Where's the barf alert?
Markets are amoral. People are immoral. Only a Libtard would intentionally obfuscate the difference to fit their agenda.
Liberals still stupid.
“The problem is, that STATIST POWER being amoral, is essentially immoral.” There, fixed it.
Why Communism Kills: The Legacy of Karl Marx.
"A simple, direct answer to the question, "Why does communism kill?" is-because the founder of Communism, Karl Marx, told them it was necessary to kill a large segment of the population in order to attain the basic objective of Communism."
Free markets, free enterprise, free trade, all involve voluntary transactions. Things people do because they choose to do so.
Everything else - everything that is not a voluntary transaction - is, by definition, something that people do because they are forced to do so. Leftists, like tyrants throughout history, try their damnedest to hide the truth in flowery language, but that what they advocating is using violence to force people to do what they would not choose to do is the underlying truth that cannot be hidden.
The free market are the only moral economic system. The basis of free enterprise is providing to others that which they would like to have. That is why those who pretend to have the understanding to know better what they should want hate it so much.
Okay, now I'm totally jealous.
Oh, and by the way, the article is full of garbage. The free market is the moral market. It is the market where the two involved in the exchange do so freely. Compulsion in the market is the moral equivalent of theft.
Yea, Sean is an intellectual heavyweight who could certainly spar with Friedman.... /s
I’m not a libertarian, but I never heard of one who supported farm subsidies.
Mostly this is just lies.
Typical liberal screed...words with no substance, truth, nor facts.
You do not love, nor hate markets. They are forces of nature, human nature. To deny them is to deny nature. Nature always wins.
Lets take health care as an example. I don’t feel well, I call the Dr. I visit his office down the street, he has me go get some pills at the end of my street and rest.
At no time during this entire event did I leave the state so there is no requirement of the federal government being involved.
Does that make me a libertarian?
The author misses the point. Most Americans/capitalists/conservatives, Christians, etc. want to help the needy. But we fight to prevent a.monarchy or other government from forcing us all to be treated as needy. And needy should be for the vast majority a short term co edition.
A market is simply associations free men spontaneously to trade their products. It works best when the men trading are moral. Falls appart when the traders are immoral.
The trading itself is neither moral or immoral.
“The government’s solution to a problem is usually worse than the problem itself.” — Milton Friedman
With that said, the founding fathers started this great experiment called the United States to protect the rights of individuals so they could freely trade with one another in a Capitalist society and enjoy individual freedom. The experiment was working well until the socialists joined starting running the government.
Always instructive when those who have no use for Christianity nor The Bible, selectively pull verses to support their mendacities.
This guy sounds like a typical goose-stepping statist.
Your comment describes reality. Instead of coping with the true nature of things idealists always seek perfection and it just plain isn't possible! The horrific irony is that in their quest for a perfect society they're almost always willing to accept "end justifies the means" illogic. That always leads to tragedies like the French Revolution's Terror, the Holocaust and Soviet gulags.
What a moron of contrived intellect and paucity of reason.
No, unless you get you get your drugs from some guy named Fred in a 88 Oldsmobile................
The guy is a pinhead because he assigns some higher moral character to “society” and that’s the whole point of being free, not having someone else’s idea of right and wrong forced on us.
We came into being as a nation as a distinctly Christian society where people freely choose a moral life style. That is what made us a great nation.
The writer doesn’t get that at all.
Headline and article are nonsense.
EG when our use of fossil fuels endangers the lives of poor people across the globe
Libertarians believe the free market can solve most problems. But statists in both the Rat and Repub parties believe that government is the solution to everything.
Yes, freedom is the opposite of liberalism and even many RINOs.
Technically, the headline does make sense. Assuming, of course, that Mr. F. came up with his theories moments out of the womb....
Capitalism is profitable..
Socialism drives bankruptcy..
This article is a pantload.
Friedman was a genius. Not perfect, but an amazing intellect.
Tea Party? What tea party?
“our use of fossil fuels endangers the lives of poor people across the globe, such an individualistic mode of thinking is not only wrong, but dangerous.”
Without fossil fuels, we’d be living in caves keeping warm sitting next to a wood fire, scrounging for roots and berries, and reading by candlelight.
“In a day and age when the rich live a life separate from the rest of us and when our use of fossil fuels endangers the lives of poor people across the globe, such an individualistic mode of thinking is not only wrong, but dangerous.”
DannyTN you’re a freeper and you agree with this crap?
He was a bright guy...not perfect.