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The Public Policy
Milton Friedman’s Centenary
A former Marxist student of the great economist and professor recalls a true liberal.
If Milton Friedman were alive today — and there was never a time when he was more needed — he would be one hundred years old. He was born on July 31, 1912. But Professor Friedman’s death at age 94 deprived the nation of one of those rare thinkers who had both genius and common sense.
Most people would not be able to understand the complex economic analysis that won him a Nobel Prize, but people with no knowledge of economics had no trouble understanding his popular books like Free to Choose or the TV series of the same name.
In being able to express himself at both the highest level of his profession and also at a level that the average person could readily understand, Milton Friedman was like the economist whose theories and persona were most different from his own — John Maynard Keynes.
Like many, if not most, people who became prominent as opponents of the left, Professor Friedman began on the left. Decades later, looking back at a statement of his own from his early years, he said: “The most striking feature of this statement is how thoroughly Keynesian it is.”
No one converted Milton Friedman, either in economics or in his views on social policy. His own research, analysis, and experience converted him.
As a professor, he did not attempt to convert students to his political views. I made no secret of the fact that I was a Marxist when I was a student in Professor Friedman’s course, but he made no effort to change my views. He once said that anybody who was easily converted was not worth converting.
I was still a Marxist after taking Professor Friedman’s class. Working as an economist in the government converted me.
What Milton Friedman is best known for as an economist was his opposition to Keynesian economics, which had largely swept the economics profession on both sides of the Atlantic, with the notable exception of the University of Chicago, where Friedman was both trained as a student and later taught.
In the heyday of Keynesian economics, many economists believed that inflationary government policies could reduce unemployment, and early empirical data seemed to support that view. The inference was that the government could make careful trade-offs between inflation and unemployment, and thus “fine tune” the economy.
Milton Friedman challenged this view with both facts and analysis. He showed that the relationship between inflation and unemployment held only in the short run, when the inflation was unexpected. But, after everyone got used to inflation, unemployment could be just as high with high inflation as it had been with low inflation.
When both unemployment and inflation rose at the same time in the 1970s — “stagflation,” as it was called — the idea of the government “fine tuning” the economy faded away. There are still some die-hard Keynesians today who keep insisting that the government’s “stimulus” spending would have worked, if only it was bigger and lasted longer.
This is one of those heads-I-win-and-tails-you-lose arguments. Even if the government spends itself into bankruptcy and the economy still does not recover, Keynesians can always say that it would have worked if only the government had spent more.
Although Milton Friedman became someone regarded as a conservative icon, he considered himself a liberal in the original sense of the word — someone who believes in the liberty of the individual, free of government intrusions. Far from trying to conserve things as they are, he wrote a book titled Tyranny of the Status Quo.
Milton Friedman proposed radical changes in policies and institutions ranging from the public schools to the Federal Reserve. It is liberals who want to conserve and expand the welfare state.
As a student of Professor Friedman back in 1960, I was struck by two things — his tough grading standards and the fact that he had a black secretary. This was years before affirmative action. People on the left exhibit blacks as mascots. But I never heard Milton Friedman say that he had a black secretary, though she was with him for decades. Both his grading standards and his refusal to try to be politically correct increased my respect for him.
COPYRIGHT 2012 CREATORS.COM
About the Author
Thomas Sowell is a senior fellow at the Hoover Institution, Stanford University, Stanford, CA 94305. His website is www.tsowell.com. To find out more about Thomas Sowell and read features by other Creators Syndicate columnists and cartoonists, visit the Creators Syndicate Web page at www.creators.com.
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aware| 8.1.12 @ 6:34AM
While Friedman got some things right he got much wrong. He blames the Great Depression on the Fed not printing like crazy(but they did). This is what Bernacke meant when he said that Friedman was "right" and why the "money dropped from helicopters" monetary expansion that will lead to hyperinflation and collapse.
Also, he never directly confronted Keynes in any of his books. In fact, he is the one who said "We're all Keynesians now" in 1965. He proudly claimed to be "one of the architects" of the withholding aspect of the progressive income tax system. This is "free market"?
His mentor was Irving Fisher, an "economist" who claimed the Stock Market "a permanently high plateau" in the summer of 1929. What happened a month or 2 later? He lost everything he had in the crash.
Friedman and his progeny of the neoclassical school of economics are monetarists who fully support a central bank and inflation through monetary expansion . This is not free market economics, though it contains elements. Central banks are fundamental in the modern State. Therefor, complicit in the greatest fraud and theft in the history of the world.
Friedman is no Hayek nor Mises by a long shot.
Jack in Wi| 8.1.12 @ 7:43AM
Excellent comments as usual aware. Friedman was a great read and got you thinking as a good teacher should, but he had his faults. He does seem to have been a fine man in his personal life as well.
DTOM| 8.1.12 @ 9:16AM
Jack,
Your compliments to the history-, reality-rewriting aware cements two things - the factfree nature of your world and of aware's world.
We're all Keynesians now was not a celebration of the fact - it was decrying a broad acceptance among Western governments that Keynes was correct, when he was oh, so horribly, wrong.
And Milton Friedman was excruciatingly clear on the fact that money is just one more commodity and that running the presses on overtime does nothing but increase its supply and the Law of Supply directs that its value will therefore decrease. Which rather nicely explains inflation to even the simplest dolt.
I learned economics where Mr. Friedman did, where did you?
DTOM
THKrupp| 8.1.12 @ 10:54AM
Plus Keynsians seem to forget that Keynes (at least to my understanding) didnt say we should just keep spending ever increasing amounts of money but that Government spending increases during economic downturns were to be temporary and after the economy improved the debt would be paid back off. They seem to forget this part.
Von Mises Jr| 8.1.12 @ 11:55AM
THKrupp, you are absolutely correct. Hayek spoke highly of Keynes although he disagreed with him on many points.
The left lies about Keynes just as they lie about everything else. Keynes believed in pump priming, but he never recommended tax hikes during a slowdown. So ObaMao and the progressives (read regressives) just lie about his work.
aware| 8.1.12 @ 12:57PM
Keynesianism as we have is not even an economic model at all. It is a political system that underpins and makes possible the massive State. That's why it is popular worldwide. Economically it is a mirage but politically it is the key to power and control.
aware| 8.1.12 @ 12:48PM
DTOM, then please explain why Bernacke is doing what he is doing if it is not in adherence to Friedman. Seen the M2 and M3 lately? He promised to inflate wildly right to Friedman, remember? Now it's a tiger by the tail, either continue to expand credit and the money supply in the futile hope that a "recovery" happens while risking a hyper inflationary destruction of the monetary unit(dollar), or stop and get a deflationary event that dwarfs the Great Depression. Bernacke is a devoted Friedmanite and his policy reflects it.
Friedman was a fine man but acceptance of the Federal Reserve and the central planners of the State is a deal breaker for me. Monetarists are NOT free market believers and never have been, Bud. This includes the Art Laffers and the whole "supply side" bunch, too. They are perfectly happy with the State controlling, not only the money supply, but the entire economy. As long as it does the "right" thing. This is a fatal flaw.
This is why they are forever arguing tax RATES as opposed to arguing for the end of the income tax, which anyone who understands liberty, and how it is lost, would.
Where did I "rewrite history"? It matters not where you learned economics, it is plain to see the job was not completed.
Brookschwarzenegro | 8.1.12 @ 9:51AM
Ravi Batra is the best, but he isn't white- so he is dised.
Von Mises Jr| 8.1.12 @ 8:41AM
Please watch this to pay tribute to Milton Friedman: http://www.youtube.com/watch?v=RWsx1X8PV_A
I have read a few Friedman books and he was remarkable since he could twist your mind with the theories of bimetallism and international trade balances, but then talk to average, non-economist with the clarity of a bell.
tminus1| 8.1.12 @ 9:27AM
Thanks for the link above, VMjr. I had forgotten about that interview. Here's another featuring a skinny kid who never quite grasped Friedman's point:
http://tinyurl.com/28vw4mz
Nick| 8.1.12 @ 11:56AM
Meanwhile.....in other news:
Boehner & Co. sell the American people down the river, yet again.
http://dailycaller.com/2012/07.....ppointees/
http://clerk.house.gov/evs/2012/roll537.xml
Remember, back in the spring of '11, when the first budget battle was winding up? And, Boehner/Cantor/McCarthy/Ryan were lying to conservatives about cutting $100 billion in the budget deal?
Remember when Boehner & Co. were telling us to wait until Sept., '11, when they could really cut the budget?
Remember when Boehner & Co. promised that if the GOP took back control of the House, they would publish ALL BILLS 3 days before a vote?
Remember, a year ago, when Boehner & Co. sold-out to O'Bama on the debt-ceiling increase, and didn't give us 3 days to read the bill?
AHHHHHHHHHHHHHH!!!!!!!!!!!!!
Boehner has got to go!
aware| 8.1.12 @ 12:52PM
You didn't really believe Republicans are the friend of sanity and fiscal "restraint", did you? Sooner or later you'll find out you have no friends among the political class.
Libertyinfinite| 8.1.12 @ 2:28PM
What the republicans need is more power & money. & a real leader who can sign in government take over of the health care industry, & gay marriage. Good thing their nominee has already done those things. Woo-hoo Mitt Romney.
The right went all out liberal in 2012. No, it doesn't make allot of sense to me either. But the American People really aren't informed enough about anything to do anything right today, & the republicans know this.
No one is going to put the breaks on government. The American People simply can not control anything anymore. Our cultural marxism has left us helpless completely. Sorry, we know, but no one really cares about it anymore enough to fight for it. Our "leader" is romney, we fold.
Libertyinfinite| 8.1.12 @ 2:20PM
I can't think of too many in the right with a spine right now. I wonder how long it's been since someone on the right had one. Sounds like this Freidman had one. I saw a clip of William F Buckley Jr. on this site today, he had one. Our problem today is that we are meek. We fallow our "leaders" who really fallow liberal media, who fallow political correctness. The ideology, that if we all just be nice, everything will be fine.
Well it's not fine. The American People are a society of marxism fallowers. Freedom is assumed to be an effortless gift, that spring forth without our knowledge.
That is why today we live happily uninformed, uninvolved, & do whatever marxist left & right leaders want us to do. Yes, he & other conservatives past (Like Andrew Breitbart) are missed. But society has taken a turn for the worst since his hayday for sure. & it won't get better, ever.
We the people will continue to be uninformed, & uninvolved until the last glimmer of freedom is gone. Because we look to our governments to "save us". If we the people don't do the work, America will die like Rome, or any other collectively despotic state.
Pinkie Ann LeBrainne| 8.2.12 @ 1:49PM
"Free to Choose" videos can be found on YouTube here: http://www.youtube.com/watch?v=D3N2sNnGwa4