The economist Milton Friedman, who did his best to destroy Social Security, public schools, labor unions and all protections that common people have against predatory corporations, died Nov. 16. President Bush said, "His work demonstrated that free markets are the great engines of economic development." Federal Reserve Chairman Ben Bernanke said, "Among economic scholars, Milton Friedman had no peer. In his humane and engaging way, Milton conveyed to millions an understanding of the economic benefits of free competitive markets, as well as the close connection that economic freedoms bear to other types of liberty." Comments from Chileans who lost their savings when their social security was privatized, from Bolivians who revolted when their public water supply was taken over by Bechtel, and from Russians whose public resources have been looted by gangsters have not been recorded by the capitalist press.
Friedman was a product of the institutions he tried to destroy. Raised in New Jersey by parents who failed to achieve more than a bare living from their entrepreneurial efforts, he was a product of the public schools and attended Rutgers University (the state university of New Jersey) on a public scholarship provided by taxpayers. His favorite teacher there, Arthur Burns, later became head of the Federal Reserve. A geometry teacher at Rahway High School turned young Friedman on to mathematical beauty by showing him the connection between Keats' "Ode on a Grecian Urn" and the Pythagorean theorem. He worked on wartime tax policy at the Treasury Department, facilitating the forced savings that made the postwar economic boom possible. He achieved tenure in the expanding economics department of the University of Chicago when enrollment was swollen by World War II veterans benefiting from the GI Bill of Rights, the largest piece of socialist legislation in terms of dollar volume ever enacted up to that time. His book, Free to Choose, became a 1980 series on the Public Broadcasting System, subsidized by the taxpayers at that time, and was lauded by such public figures as Ronald Reagan and Margaret Thatcher. Some of the stations that aired it refused to show a rival series featuring Friedman's great Keynesian rival, John Kenneth Galbraith. "There is no such thing as a free lunch," Friedman famously said, but he seems to have seldom turned one down.
Not all of Friedman's ideas were popular with the neo-conservative establishment. He deplored the American Medical Association's monopoly on the licensing of doctors and the state's monopoly on licensing car drivers. Once he was asked if he favored dispensing heroin and other hard drugs from street vending machines. "Only if the machines are privately owned," he replied. He argued that prohibiting, regulating, or licensing human behavior either does not work or creates inefficient bureaucracies.
Friedman's A Monetary History of the United States, 1867-1960, written with Anna Schultz, argued that the Great Depression of the 1930s was the result of a contraction in the quantity of money between 1929 and 1933. He later revised his views to state that the boom of the 1920s was more due to technological change than to monetary policy. He considered monetary policy the only legitimate way for governments to influence economics, but most central bankers today, even those who greatly admire Friedman, consider his prescriptions for implementing these monetary policies to be impractical. His view that governments should not try to reduce unemployment by permitting inflation now holds complete sway among central bankers. He believed that there is a natural rate of unemployment that cannot be reduced except by wage inflation, something to be avoided despite unwise political pressure from the unemployed and organized labor.
Friedman saw economic and political freedom as inextricably linked but believed that freedom was only possible under capitalism. In 1962 he wrote, "A society which is socialist cannot be democratic, in the sense of guaranteeing individual freedom." James Galbraith, son of John Kenneth Galbraith, comments, "Milton Friedman didn't make a distinction between the big government of the Peoples Republic of China and the big government of the United States." Friedman offered no relief for those suffering under monopoly or oligopoly capitalism which seems to be the inevitable result of so-called free competition and who can get temporary or permanent relief only with the intervention of the state. Large corporations must be given unlimited freedom in his view, and all attempts to gain countervailing power through labor unions or legislative regulation are wrong. He rejected the idea that education, health, water and other public utility resources, highways and other infrastructure components are of such value that they must be controlled by the people at large. Recent revolts in several parts of the world and election results in this country show that most politically empowered citizens do not agree.
Friedman won the Nobel Prize for Economics in 1976 and a dozen of his disciples have won it since. His "permanent income" contention that won him the prize, that people regulate their long-term spending according to what they expect their income to be over the decades rather than because of sudden windfalls or unexpected tax breaks, seems a sound conclusion based on rigorous mathematical analysis. The Nobel is based on a narrowly mathematical sort of economics that seldom has much to do with public policy in the real world. It is doubtful if Galbraith, Keynes, Veblen or Marx would qualify as economists by today's Nobel standards. Socialists like Jan Myrdal have won the Nobel as well, but seldom for work of much public impact. The field of economics has been so narrowed that it seems to many to be irrelevant academic trivia, but in the dream world of romantic capitalism, prophets like Friedman are still greatly honored. Unfortunately, their crackpot ideas lead to terrible human suffering.
J. Quinn Brisben is a retired high school social studies teacher from Chicago who was the Socialist Party USA candidate for president in 1992.
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