Friday, January 14, 2011

Paul Krugman Exposes Milton Friedman (Thanks to Ron Paul)

Wow, Paul Krugman is so desperate to get at Ron Paul and the Austrian School that he has just exposed Milton Friedman as a lefty. Krugman writes:
What did I mean here when I said that Milton Friedman was on the same side of the divide as Keynes, and the other side from people like Ron Paul? I meant that Friedman-type monetarism was technocratic, not moralistic; he advocated a constant growth rate of the money supply on the basis that it works better than activist policy, not on the grounds that printing money is confiscation.

In fact, Friedman was in favor of printing money. He wanted to stabilize broad monetary aggregates like M2, not the monetary base (which is the stuff the Fed actually prints). His criticism of the Fed during the Depression was that it didn’t do enough to prevent a fall in M2 — that is, that it didn’t print enough money. He was all for devaluation as a way to get prices and wages in line. And he pretty clearly favored quantitative easing.

It says something about the times we’re in that Milton Friedman now looks left-of-center, at least on monetary issues.
Of course, the point of this article is to try and slam Austrian Economics as a religion, that's why Krugman differentiates Ron Paul as being "moralistic". I discussed what Krugman is up to with that, here. But Krugman is correct in calling Friedman a lefty for his views on Fed money printing. By calling for the printing of money, Friedman is simply calling for a type of central planning at the monetary level.

In the old days, this was understood as a lefty view [and it shows Krugman's ignorance of economic history, since it appears he isn't aware of this]. Murray Rothbard explained:
Mention "free-market economics" to a member of the lay public and chances are that if he has heard the term at all, he identifies it completely with the name Milton Friedman. For several years, Professor Friedman has won continuing honors from the press and the profession alike, and a school of Friedmanites and "monetarists" has arisen in seeming challenge to the Keynesian orthodoxy.

However, instead of the common response of reverence and awe for "one of our own who has made it," libertarians should greet the whole affair with deep suspicion: "If he’s so devoted a libertarian, how come he’s a favorite of the Establishment?" An advisor of Richard Nixon and a friend and associate of most Administration economists, Friedman has, in fact, made his mark in current policy, and indeed reciprocates as a sort of leading unofficial apologist for Nixonite policy.

In fact, in this as in other such cases, suspicion is precisely the right response for the libertarian, for Professor Friedman’s particular brand of "free-market economics" is hardly calculated to ruffle the feathers of the powers-that-be. Milton Friedman is the Establishment’s Court Libertarian, and it is high time that libertarians awaken to this fact of life.

Friedmanism can be fully understood only in the context of its historical roots, and these roots are the so-called "Chicago School" of economics of the 1920s and 1930s. Friedman, a professor at the University of Chicago, is now the undisputed head of the modern, or second-generation, Chicago School, which has adherents throughout the profession, with major centers at Chicago, UCLA, and the University of Virginia.

The members of the original, or first-generation, Chicago School were considered "leftish" in their day, as indeed they were by any sort of genuine free-market criterion. And while Friedman has modified some of their approaches, he remains a Chicago man of the thirties.
It goes beyond monetary theory, as Rothbard discusses here. But bottom line, Krugman is correct that Friedman looks like a lefty next to Ron Paul. In many ways, Friedman is a plain old lefty. What's interesting, but not surprising, is that Krugman is not aware of the intellectual left roots that explain a lot about Friedman's true views that Krugman is just backing into now.

Ron Paul is opening a lot of eyes., but I never thought it would get this far.


  1. I'm so confused. Krugman's column is called "Conscience of a Liberal". Just to make sure I wasn't going loony, I ran a quick Google search on the definition of "conscience":

    # motivation deriving logically from ethical or moral principles that govern a person's thoughts and actions
    # conformity to one's own sense of right conduct; "a person of unflagging conscience"
    # a feeling of shame when you do something immoral; "he has no conscience about his cruelty"

    So, in other words, Krugman is attacking other people for their moral concerns when his column is motivated by moral concerns, albeit those belonging to a "liberal".

    Doesn't that mean that morality is the very debate worth having for Krugman versus his opponents, and that everything else should play second-fiddle to that?

  2. Oh and one more thing. Where does Paul Krugman draw the line on morality? Certainly he wouldn't advocate genocide or war simply because he thought it might lead to greater total economic prosperity or more economic equality (or whatever it is, economically, that he claims he is concerned with), would he?

    So what's the deal, Paulie, when is it okay and when is it not okay to be concerned with morality, and how does one properly weigh moral values versus economic values?

  3. Funny, but in my (luckily) long life, I've come to the conclusion that what is moral is also "technocratically" advantageous.

    Instant Kharma, if you will...
    (and yea, I prefer the older spelling thank you very much)

  4. Once again, we see proof that Krugman is not an economist, but rather a political operative. He won the Nobel precisely because of his political commentary, as the Swedes and Norwegians were on a "We're against all things Bush" campaign, which culminated in Obama getting the "Peace Prize."

    You notice that he does not address the issue at all. Instead he is saying this: Everyone knows that Milton Friedman was a free market guy, and he favored printing money. Therefore, the Austrians must really be out in right field because they disagree with Friedman.

    Once again, we see Krugman resorting to logical fallacies in order to press his views, this time the "appeal to authority." (The "ad hominem" is another favorite of his.) What the guy really cannot do is to argue. He doesn't know how to do it, which is more of a statement about modern academic economics than anything else.

  5. Little Paulie Krugman is just a bratty parasite who holds government violence as a high ideal. This filthy maggot has the character of a 12 year old brat combined with the mind of Joey Stalin.

  6. The original "Progressives" were generally in favor of rule by experts. They were in short advocates of technocracy. They generally opposed popularism, democratic rough and tumble and any 'non expert' deference to "irrational authorities", like religion, custom, tradition or 'common sense'.

    So Krugman's criticism of "morality" is part of this tradition too.

    He correctly defines Friedman as a fellow technocrat. Friedman is perhaps best thought of as "right Progressive". Friedman came out of the Chicago School and is generally thought of as a free marketeer. But not so the Chicago School. It's founders were Simon and Knight. Although not outright socialists their program was generally Progressive. Simon's "A Positive Program for Laisser Faire" lists a shopping list for government interventions that would wear out the most busybody E.U. social democrat. Friedman's technocratic impulse shares the same Progressive roots as Krugman.

    Friedman's "free market" program may make him a black sheep in the Progressive / technocrat community, but is he really that far from their mainstream?

    Friedman and his later day "free market" Chicagoites have really focused on their "second best solutions", vouchers, money targets, negative income taxes, etc. This parade of gimmicks has inspired even less "free market" imitations like Pigou Taxes (taxes on 'negative externalities'), cap and trade and "nudging".

    So Krugman is right to see Friedman as a kind of long lost cousin.

    What is of course interesting in this debate is the touching faith Progressives (of all stripes) have in experts. No failure by the experts to deliver weakens the faith. If experts fail, the problem isn't the unstated technocratic assumptions (so thoroughly exposed by Hayek in his very Austrian critiques of central planning and "constructivist rationalism") just in the current bunch of experts.

    1. Great analysis!

      A "if I'm wrong it's because people don't act the way that I think they should" exposure of the intellectual mindset of these technocratic bastards.


  7. Just remember...Every time you pay a tax you are supporting criminal-minded parasites like Paul Krugman.

  8. "we see proof that Krugman is not an economist, but rather a political operative"

    Agreed! I figured this out years ago...Before the violent little boy won a Nobel.

    Can you imagine the typical "character" of the Nobel committee?

  9. So...How's that Democracy thing working out for you? The majority in any area are feeble-mined and slave-owner-wannabes like Krugman, Pelosi, Reid, and Obama can easily get them to be their slaves. Voting morons along with Parasites like Krugman is the reason why Dumbocrazy always fails...The parasites overwhelm the producers...Always.

  10. What a great Krugman article. For too long, we've heard things like "we tried free markets, we listened to Milton Friedman, and look what we got." Thanks to Krugman for showing this to be a lie.

  11. Didn't the Nobel committee present Obama a piece prize just days before he ordered mass-murder in the mideast? The Nobel psychopaths are even more stupid and violent that the UN parasites.

  12. @ earth that was

    Would it be fair to call Milton Friedman a "neoliberal"?

  13. Does Friedman recant here:

  14. Anonymous is right. The Nobel peace prize was awarded to Obama. The Socialist Party dominated Norweigian parliament awarded it to Obama, essentially for just getting elected. It was interesting to note Obama's acceptance speech. He couldn't not accept it, a refusal would essentially eliminate all chance of ever getting it again. But he basically acknowledged he didn't deserve it in his speech. He then went on to talk about Martin Luther King and predator drones. It was interesting to look at the Norweigian audience. Many of them plainly looked embarassed as if they realised they had made a mistake. Don't believe me? Check out the video on Youtube. None of this was mentioned by any of the press. They were too blinded by the new emperor to see and too conformist to say. But it is quite obvious.

  15. Democracy is war between the producers and the parasites...Krugman is a high-ranking officer (Parasitical Elite) of Team Parasite and is therefore not fit to live civil society. Paul Krugman is the equivalent of a Rapist, Tapework, or Smallpox virus.

  16. Why did the violent socialist parasites on the Nobel Committee give a prize to Krugman? Oh, I think I answered that.

  17. On one issue, however, Ron Paul and Friedman agree: the Fed should be abolished.

    See this video, in Friedman's own words:
    "My first preference would be to abolish the Federal Reserve."

  18. Cannon asks if MF can be labelled a "neoliberal". Canon is of course right. I called MF a "Right Progressive" because I wanted to illustrate the whole Progressive Era technocrat angle.

    I suppose we do get into the never ending argument about what 'liberal' means here, and generally speaking the social democrats Americans call 'liberals' ain't liberals.

    What's interesting is that MF has been labelled a "neo-liberal" by leftist critics who regard all us free market types a 'neoliberals'. Those leftist critics definition of 'neoliberalism' includes many features, essentially the whole "Washington Consensus", the use of "free trade" treaties, global IP treaties etc which many libertarians and free marketeers are opposed to. An example of this leftist usage is Naomi Klein in 'The Shock Doctrine" (See this debunked here).

    But before this recent use (misuse?) of the term "neoliberal" became common (overly common?) - Mises used it, in a different sense - to define the new post-WW2 wave of defenders of the free society many of whom rallied around the Mount Pelerin Society.

    At first Mises allied himself with this group and presumably agreed with their goals. However Mises fell out with the MPS and labelled them all "neoliberals" (including his student Hayek) and thought they had gone too far in their compromises with socialism (or more exactly social democratic socialism.) To Mises the label "neoliberal" was one delivered with a sting, it was like calling someone a traitor. Hans Hermann Hoppe has written about this. (See here).

    If anything the MPS has grown and got fused with the whole Beltway think tank industry so if anything MPS "neoliberalism" is even further removed from Mises'viewpoint today than it was when he walked out.

    MF was of closely associated with the post-Mises MPS "neoliberal" era however I get the feeling even he may have been having doubts in his final years. In particular MF came out quite clearly against the Iraq war. In previous decades, although he played a major role in Nixon's abolition of conscription, MF basically left all foreign policy matters to the GOP but allied himself with Goldwater, Nixon and Reagan, all of whom were full blooded foreign interventionists. When Iraq came around MF was at least starting to talk openly in ways similar to paleos but never made the full jump.(See here.)

  19. I think most Americans understand that Nobel and the UN are flled with stupid and corrupt parasites (aka, Infantile Terrorists aka, Socialists) and what they do is all about feeling not like the losers that they are but feeling powerful by using political violence to enslaving everyone on Earth.

  20. Paul Krugman is a childish little loser who demands that everyone else live for him (What else is a Liberal?). This psychopath supports government violence in order to make everyone do as he wants and give up everything that they work for. Paul Krugam is a violent little mugger yet he is to cowardly to mug other people himself. He is like the weak little loser on the playground who befriends the biggest bully in order to push everyone else around.

  21. I think the more pressing issue is not that Friedman looks "left-wing" compared to Ron Paul or Murray Rothbard, but that he looks "right-wing" compared to the Krugmanites that perpetually control US monetary policy.

  22. Friedman knew Keynes and said that during Keyenes last days he was very worried that people were starting to distort his theories on defecit spending. In other words, he was worried a moron like Krugman would win a Nobel Prize.

  23. Actually, Keynes said that to Hayek, not Friedman. I doubt Friedman knew Keynes personally.

  24. This article (and the many people attacking Krugman in the comments section) seem quite hypocritical to me. I have not seen any numbers nor any proper refutations of Krugman's policies. No one has disproven that Friedman favoured quantitative easing.
    Somehow, despite all of the above, people are saying Krugman is a political elitist with no facts on his side. Strange, isn't it?