Sunday, April 18, 2021

More on Milton Friedman: Good Guy or Bad Guy?

Milton Friedman

I see my post, Conservatives Discover Milton Friedman Not the Hero They Thought He Was, has gotten quite a bit if feedback which I want to discuss further.

Dominick writes in the comments:

Don't agree at all. Everything in context, RW. Withholding was proposed as a WW 2 "war time" emergency measure; the all "volunteer" army was to replace the most anti-libertarian of policies: military slavery/draft; school vouchers provided some choice in schooling (some choice is better than no choice) and is NOT necessarily (logically) connected to government-determined curriculum or teacher qualifications; and Friedman's monetary rule (no discretionary power for the Fed; simple automatic 3% increase) neuders the Fed looks positively benign compared to what progressives, conservatives (and even some libertarian/Austrians) propose. Friedman may not have been a radical libertarian (and he was no Austrian) but to call him a "very bad guy" because his policy proposals were not radical enough is a mistake and a variation of the Demsetz Nirvana fallacy. Even Mises--and especially Hayek--fail the absolute purity test on policy. And in the case of Mises and Hayek....they (unlike Friedman who was not an Austrian by training) had no excuse...

RW response:

Well, it was mentioned in the video I posted that it was a WW2 "war time" emergency measure.

Without trying to sound like a smart alec, World War 2 is over and the withholding tax still exists. This is the problem with technocrats like Friedman they devise "temporary" measures that go on and on. It was a very bad move by Friedman.

If everyone had to scramble up all the taxes they owed on one day, April 15, taxes would be a lot lower.

Friedman helped the state enormously here.

Further, why should Friedman get a pass even if it was only to help finance World War 2? Are we actually supposed to cheer methods created to expand a horrific war where hundreds of thousands of American soldiers were killed for no good reason?

Yes,  the all "volunteer" army was to replace the most anti-libertarian of policies: military slavery/draft but if Friedman would have kept his mouth shut about paying free-market wages for soldiers, the draft would have ended anyway and the military would have had to have shrunk dramatically in size. Friedman gave them the military the method by which it could maintain its vast outposts around the world.

As for "school vouchers provided some choice in schooling (some choice is better than no choice)," this is still about leaving the government in control of what is education. Why would any libertarian push this? This can get as much out of control as public school education. I don't see how it can be stated that it "is NOT necessarily (logically) connected to government-determined curriculum or teacher qualifications." 

Is the government really going to allow vouchers to be used by me to teach my views on climate change, political correctness, etc.? Where is this being allowed now?

Friedman is a monetary quack. There is no reason in the world for an automatic 3% money growth. Again, he does the technocratic thing to keep the government in the game.

As far as "Even Mises--and especially Hayek--fail the absolute purity test on policy. And in the case of Mises and Hayek....they (unlike Friedman who was not an Austrian by training) had no excuse..."

This is not about a purity test. I deal with Hayek below but I can't think of a policy Mises is responsible for in the United States that has resulted in helping take any of my liberty away. This can not be said of Friedman given the withholding tax and a massive military that exists.

Econophile writes:

Good call. It's like Jefferson owned slaves and that cancels him out? Ditto Friedman. The positives outweigh the negatives by far.

RW response: 

Again this is not a purity test. It is about the weight of actions in the context of the time. It is not about Jefferson owning slaves. What Friedman did would be comparable if Jefferson introduced the concept of owning slaves.

That is what Friedman did with withholding taxes, market-rate wages for the military and vouchers, he introduced and/or prompted the ideas.

evmazu writes:

On the other hand:

- opposed Iraq war when everyone else was giving into the hysteria

- called for abolition of the Fed https://www.youtube.com/watch?v=m6fkdagNrjI

not just this one clip, I've got stuff on him dating at least back to the 1970s saying this

- was one of the very few who could get through to the conservatives about the drug war without being labeled a kook. There's a reason for William F. Buckley came out against the drug war in National Review and that reason is Milton Friedman

And complain about vouchers if you want but if your kid was zoned in a horrible government school today and vouchers came along tomorrow to bring you some options for something a lot better (or at least not horrible) it would be one of the best things to actually improve your kid's quality of life now and in the future


I'd encourage everyone to listen to the Milton Friedman Speaks series of podcasts available below and on iTunes: https://blog.freetochoosenetwork.org/podcast/episode-1-milton-friedman-speaks-what-is-america-podcast/

RW response:

I have never said that Friedman did not have sone good things to say. He opposed the Iraq war but so did many others. BUT if it wasn't for Friedman's technocratic advice to switch to a free-market wage paid military, the US would never have the military to go to war with Iraq.

To say he called for the abolition of the Fed is misleading. It is not the reasonlibertarians call for the abolition of the Fed. Libertarians want to abolish central banking. Friedman was not in favor of abolishing central banking, he just didn't like the way the Fed was conducting money printing policy. He wanted a central banking institution that created money according to his quack formula.

As far as drugs, as far as I know, he was fine on the subject.

As for:

And complain about vouchers if you want but if your kid was zoned in a horrible government school today and vouchers came along tomorrow to bring you some options for something a lot better (or at least not horrible) it would be one of the best things to actually improve your kid's quality of life now and in the future

Just where do you get the idea that the voucher system would be any better if it was the only method by which government-controlled education?

It seems that you have no idea of what is at the core of central planning. When central planning becomes a significant enough factor, in any form, in any sector, the bad guys will move into the sector to control it. Your support for government vouchers suggests you don't understand this very important fundamental about government control.

Dominick writes:

Was Adam Smith a "slick statist"? Or how about Hayek..(in The Constitution of Liberty) who had far more objections in policy to the free market than Milton? Or how about David Stockman whom you regularly publish? William Graham Sumner, the subject of my dissertation, was as close to a pure libertarian/free market economist as there was 150 years ago (he even anticipated and rejected antitrust law) BUT he supported public schools and some "public works" projects. Does that make Sumner a "slick statist?" Look, if we ever want to be taken seriously, we must stop putting people such as Friedman in with real slick statists like Galbraith and Krugman. As has been noted, Friedman (and Rand) probably turned more people on to free market ideas and policies than almost anyone in the last 50 years. And if my friend Walter Block chimes in that Friedman was really a "socialist" I will take him to the woodshed when I see him next!! Come on guys, get real.

RW response:

As to the question, "Was Adam Smith a 'slick statist'?," taking my lead from Murray Rothbard, I have made clear that Adam Smith was an economist of mixed value, more bad than good. See: Adam Smith's Role in Launching Marxism.

As for "Or how about Hayek..(in The Constitution of Liberty) who had far more objections in policy to the free market than Milton?," I posted this: 48 Non-Libertarian Positions Held By Friedrich Hayek.

On the other hand, Hayek's  The Counter-Revolution of Science is masterful as is his commentary on the problems with the concept of social justice. And there is his masterful observation in Chapter 10 of The Road to Freedom on why the worst get to the top, to name just some positives.

Hayek is a mixed bag. He sometimes went way off the track but at other times he was brilliant with very original observations. Friedman at best was a great presenter of free-market ideas but I can't think of much that was original and of great insight by him.

As for David Stockman, I would classify him as a very solid paleo-conservative. Again this is not about some kind of purity test. It is about a personality, Friedman, who always finds new creative ways to keep the government in the game on a massive scale. Ways where in many cases a part of government would have withered away if it wasn't for his advice.

Stockman doesn't come close to this. He is a solid small government man who as far as I know is against war, against big-spending, against the expanding state and anti-woke. He is in favor of some taxes that I am not but that is what you get from a paleo-conservative. I oppose him on that but given what we now have in Washington D.C., I wouldn't mind him as president. Nor would I mind Mises as president.

Hayek, I would be very nervous about and I would be extremely nervous about the technocrat Friedman. And Dom, I want to make clear, you pass the test, despite the fact we occasionally disagree on some point, if you decide to run for president, I would support you 100% and probably vote for the first time in my life.

Finally, I grant that Friedman has introduced a lot of people to free-market economics and that is good, however, he has done a lot of bad with the government technocrat side of his personality and we must warn about that.

 -RW

9 comments:

  1. Believe it or not I was first introduced to Friedman when I took ap history my sophomore year in high school. At the time I was a quasi-Georgist, but still considered myself a "capitalist." I found a lot to like about Friedman at the time, though it would really be Ron Paul that pushed me towards learning the Austrian school.

    Regardless he will always hold a place for me in regards to my evolution as a libertarian. However, while Friedman might be a decent and more palatable starting point than say Mises or Rothbard, there's always that but. He can be used as an introduction to free market ideas at best, but his flaws on macroeconomics should be pointed out immediately. In fact I wouldn't even recommend reading anything he wrote.

    Watching a few videos where he defended free markets, that's fine. But when it comes down to really getting into the weeds on free market ideas read Human Action or Man, Economy, and State, not A Monetary History of the United States. I mean it's a red flag when people like Donald Rumsfeld (a Warhawk if there ever was one) are lauding Friedman's economic contributions.

    I remember reading a story of Friedman and a bunch of other economists in a room talking about policy. I forgot what they were proposing, but Mises stood up in disgust and decried everyone in the room as socialists before leaving.

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    1. https://mises.org/wire/radicalism-and-calling-spade-spade

      "INTERVIEWER: Some of those debates became very, very heated. I think [Ludwig] von Mises once stormed out.

      MILTON FRIEDMAN: Oh, yes, he did. Yes, in the middle of a debate on the subject of distribution of income, in which you had people who you would hardly call socialist or egalitarian — people like Lionel Robbins, like George Stigler, like Frank Knight, like myself — Mises got up and said, "You're all a bunch of socialists," and walked right out of the room. (laughs) But Mises was a person of very strong views and rather intolerant about any differences of opinion."

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  2. Is there another alternative in Classification here? Friedman was an Advocate for the "Demand Side" of Conservative Economic Theory. He was...ummm...not a Fan of the Gold Standard since, with "Learned Opinion", controlling the Money Supply would be easy. You could not Micro-Manage the Money Supply but if it expanded at a slow constant rate, it would roughly match the increase the Production of Goods and Services and would provide Stable Prices through long periods of time.

    Alas, such Philosopher-King ideas run up against the "Mobile Logic for Mobile Minds" thinking of today.

    Jude Wanniski (Why do you not mention him, RW?) gave an Explanation of the Supply Side answer to Friedman and Anna Schwartz. If Goods and Services pile up on docks around the world, it could only occur if an artificial barrier were placed in the way of Free Trade. That artificial barrier could only put in place by a national government, enacting, for example, the Smoot-Hawley Tariffs.

    You have been, RW, a tireless advocate for ABCT and you are to be commended.

    As long as there is a Central Government, there will be a Demand Side. As long as there Restrictions on Trade placed by the Government, there will Supply Side Advocates. If Friedman were to realize his Monetarist Goal, he would put himself out of business. If we opened our Trade Borders, we would all benefit but the most rabid Lefty in Congress will never acquiesce in losing the Military Manufacturing Businesses in his or her District.

    In Robert Novak's book, Prince of Darkness, Novak tells of interviewing Ronald Reagan. As Reagan, who amazed both Novak and Rowland Evans with his command of Conservative Economic Thought, brought up the Gold Standard, his Handler told the participants that it was time to go.

    Reagan knew, as did Evans and Novak, that Gold Standard talk was upsetting to the Movers and Shakers in the Market. Novak knew that Reagan's Protestations were for show. Reagan an advocate for Gold? Yes. Just not then at that moment.

    There is a Consistent Conservative Economic Thought. Perhaps it is ABCT. It would include the Supply Side and the Demand Side.

    Friedman was not Evil. He was, however, more trusting of the Central Government than his Monetarism demanded. Today, the FED has 2 Mandates, Stable Prices and Full Employment. Now, that's Evil.

    How far we have fallen from the Coin Act of 1792, which demanded death for anyone debasing the Currency. Now, Debasement is seen as a Virtue.

    Until there are firm advocates who could sway the thinking around the nation and in the Halls of Congress, we will muddle through or worse. We will then find our version of Smoot-Hawley again, at our Peril.

    CW

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    1. “...with "Learned Opinion", controlling the Money Supply would be easy. You could not Micro-Manage the Money Supply but if it expanded at a slow constant rate, it would roughly match the increase the Production of Goods and Services and would provide Stable Prices through long periods of time.”

      Uh, yeah how exactly has that worked out? I contest not very well. As Stockman wrote in his book The Great Deformation Friedman created a giant flying monetary contraption (I cannot pull the exact quote out of my butt right now) and frankly Stockman was and is right. It is one of the reasons that we have this insane casino financial system that we do.
      That is without even mentioning the.fact that without the monetary system as was created back in 1913 and the subsequent mechanisms added to that monster crated on Jeckel Island, some things like WWI WWII and the current imperial empire of the United States would have in some cases been rather different or NOT TAKEN PLACE.
      Friedman might have well been the best intentioned, smartest, man on earth but the problem with that is the what good intentions get you -that old road to hell thing- and the other overriding truth of life no one man can know all that needs to be known to control such an entity as money supply. Simply not possible.

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  3. So, to sum up: did Friedman's entire body of work, his influence, and his legacy bring us closer to liberty or not?

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    1. I would say "Yes" for the following:

      The reasons for the Great Depression were laid-off on "Speculators" and such, as if Sellers had no choice in their Decisions. Friedman and Schwartz showed that the Money Supply fell by a full 1/3 - Not the "Rate of Increase/Decrease but the Quantity itself.

      This was Empirical/Scientific Work, not speculative work or Agit-Prop.

      Another example: Friedman believed that the "Giant Corporations" arose, not because of an Inherent Evil in Unregulated Capitalism, but because the Laws were changed: Profits that otherwise would have been returned to Shareholders could be diverted into Plant Expansion instead (With Tax Breaks for said diversions). Corporations then began to focus on pleasing the Satraps in Congress. Boards became isolated from Shareholders and, as seen today, even isolated from inferior Board Members. "Why please the Shareholders?"

      This was empirical study as well.

      Thus, Friedman's Work has laid bare many of the Unpleasantries of those who live for the Pursuit of Power.

      That's Good.

      CW

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  4. Friedman's support of Central Banking necessarily relies upon an unsubstantiated claim that the market fails and naturally produces mass unemployment and other problems. Talk about handing the statists a 4 by 4 with which to beat us over the head. Where's the evidence from the Friedmanites that the market fails?

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  5. Setting aside the question of Friedman, the greater question is: Why did the Liberal Revolutions of the Eighteenth and Nineteenth centuries fail? They failed because the liberals lost the battles of the banks and the schools.
    We've got to be radicals on the banks and the schools, people!

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  6. I will make just two points on Friedman's policy proposals with respect to vouchers and the "monetary rule."

    !. RW says: "As for 'school vouchers provided some choice in schooling (some choice is better than no choice),' this is still about leaving the government in control of what is education. Why would any libertarian push this?"

    But no one HERE has ever called Friedman a "libertarian" and I don't believe that he ever called himself a libertarian. So that's a straw man argument. Friedman like Tomas Sowell (who, btw, has far, far worse positions on some issues--military/foreign policy--than Friedman, yet no one here I hope thinks Sowell is a "slick statist") probably thought of himself as a "classical liberal" and most of his policy positions more or less reflect that ideology. And he has a positivist/utilitarian methodology, again fairly common among classical liberals but NOT Libertarians, and that leads to different conclusions on strategy and policy "toward liberty."

    And if the standard in policy positions is not "purity but, as you say, does it "take my liberty away" (relative to the existing institutional arrangement), THEN choice and vouchers per se don't take your liberty away. Indeed, choice in schooling moves you toward more liberty...although not completely, of course. Now, different question, is it (vouchers) a good strategy for a libertarian who wants to abolish public schooling all together? Probably not, but Friedman was not a libertarian and does not want to end public schooling completely. But he does want individuals in the existing system to have more liberty and vouchers provide that. This point seems non-debatable to me.

    2. RW says: "Friedman is a monetary quack. There is no reason in the world for an automatic 3% money growth. Again, he does the technocratic thing to keep the government in the game".

    Wrong, RW, on several counts. You say that there is "no reason in the world" but, of course, there a "reason" in the world (of reality) although you may not acknowledge it or agree with it. Nonetheless it exists. A 3% money rule severely limits Fed discretionary power (good, right?) and everything else equal, reduces private economic uncertainty in the marketplace (good, right?). So it is not, per se, a quack idea or policy. In addition, in some sense, it doesn't keep the "government in the game" at all but puts them sulking in the dugout. As Friedman once said, a computer algorithm could be programed for a fixed money growth rate which led him ultimately to say that his "rule" does, de facto, eliminate the Fed. (Has Tom Sowell ever gone this radical toward limiting the power of the Fed? Don't think so. Is Sowell a crank? Hardly.)

    To conclude, neither Friedman (nor Sowell) are slick statists and the cause of liberty (apart from disagreements over methodology or strategy) is not advanced by careless verbal smears, especially smears from fellow travelers. Let's reserve the term "statist" for the real enemies out there who want to end liberty as we know it.

    Thanks, RW, for your thoughtful criticisms and the time you allow here for different opinions.

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