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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

Milton Friedman « Previous | |Next »
November 19, 2006

A belated post on Milton Friedman who passed away a couple of days. Many in the economics profession will laud him as a giant, indicate his contribution to the profession; or highlight his influence on their life.

Don Arthur at Clubb Troppo has interesting post on the reception of Friedman's ideas in Australia in the 1970s. Based on his texts, such as Capitalism and Freedom and Free To Choose, I understand him as a liberal political economist; one who understood that there is an intimate connection between economics and politics.

My memory of Friedman is that he was a naive positivist, a champion of the virtues of unfettered markets; an advocate for monetarism, the idea, that the inflation can be regulated by the Federal Reserve's control of the money supply, and a defender of negative freedom. I've always interpreted Friedman as a classical (19th century one) who argued that economic freedom is both a necessary freedom in itself and also as a vital means for political freedom; advocated limited government in a liberal society a liberal society (should enforce law and order and property rights, as well as take action on certain technical monopolies and diminish negative effects); had little time for the idea of social responsibility of corporations and the welfare state.

Friedman basically reckons that as markets do things better than governments, so the government should get out of the way. Thus we have the privatization of state assets.The fundamental difference between liberalism and social democracy is disagreement over the role of the state in the economy, and that difference is premised on the priority or weight given to individual freedom and equality.

Friedman's criticism of social democracy are well known and pretty standard: interventionist government policies have a big cost in personal freedom and economic efficiency. Such interventions would include government taxation on gas and tobacco, government regulation of the public school systems, and social welfare since welfare practices create wards of the state as opposed to self-reliant individuals. The main argument was that government involvement in the economy was a slippery slope, that any would lead to more, and that more was difficult to remove.

Friedman's dualist thinking around economics and politics meant that he did not understand is that the governing through the market is just that --a mode of governance by the liberal state designed to shap the conduct of liberal subjects for certain ends. Todays' classical liberals (now called libertarians) are still entrapped in, and repeat, that heritage.

| Posted by Gary Sauer-Thompson at 7:50 AM | | Comments (0)