Milton Friedman at 100
From the Chicago Tribune:
On the 100th anniversary of his birth Tuesday, one may wonder what the Nobel laureate would say about the more controversial policies now unfolding across America. What would Friedman have thought about the recent advances in school choice, an idea he developed in 1955? How would he react to the government’s decision to tax Americans who do not purchase health insurance? Would Friedman take a position regarding the financial impact of soaring public union pensions on state economies? As an expert on monetary policy, certainly Friedman would have an opinion regarding the federal government’s bailout of the financial industry and its impact on our personal freedom.
I think the most important measure of a thinker’s influence are his once-controversial ideas that are now considered so obvious that no one seriously disputes them. I’ve recently been reading a collection of Friedman’s Newsweek columns from the late 1960s and early 1970s, a time when he was at the peak of his fame and influence. Among the proposals he wrote about most frequently were: severing the link to gold and letting the dollar float, fighting inflation by reducing the growth of the money supply, ending the draft, abolishing wage and price controls, and cutting taxes.
Friedman had a two-part counterattack. Part one was to argue—fairly persuasively—that monetary policy rather than fiscal policy was the key to recovery from the Great Depression.
Part two has a more complicated legacy. The straightforward reading of Friedman’s point about monetary policy and the Depression is that, yes, a propserous market economy does require active public sector management of the demand side of the economy. But Friedman wanted it to be read a different way, as an example of the damage done by the government doing bad things. These characterizations are basically equivalent, but Friedman’s way better suited his ideological proclivities regarding income redistribution. But faced with a new depression, Friedman’s way of putting this has created two problems. One is that on the right a lot of folks view calls for central banks to adopt appropriate monetary policy as just another form of government activism. Meanwhile on the left thanks to co-branding between a monetary focused view of macroeconomic policy and Friedman’s views on other matters, many view it as a kind of sellout to argue that business cycle problems can be cured with monetary policy.
From the Wall Street Journal:
He loved turning the intellectual tables on liberals by making the case that regulation often does more harm than good. His favorite example was the Food and Drug Administration, whose regulations routinely delay the introduction of lifesaving drugs. “When the FDA boasts a new drug will save 10,000 lives a year,” he would ask, “how many lives were lost because it didn’t let the drug on the market last year?”
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.'”
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.
From the internet meme “Milton Friedman quote or Toby Keith lyric?”:
1. Governments never learn, only people learn.
2. All the happiness in the world can’t buy you money.
3. There’s no such thing as a free lunch.
4. The glass won’t ever be half empty in my optimistic mind.
5. Hell hath no fury like a bureaucrat scorned.
6. Inflation is taxation without legislation.
7. I won’t break my back for a million bucks I can’t take to my grave.
8. The power to do good is also the power to do harm.
9. One man’s opportunism is another man’s statesmanship.
10. I’ll have a hot tub full of hotties icin’ down a 24-pack.
For more Milton Friedman, including Capitalism and Freedom, see a selection of his writings here. For information on centennial events, tributes, videos, and excerpts, visit the Becker Friedman Institute for Research in Economics at the University of Chicago.