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Milton Friedman: Entrepreneurial Economist
Great economist by day and crusading public intellectual by night, Milton Friedman was my hero. Friedman's contributions to economics are profound, the permanent income hypothesis, the resurrection of the quantity theory of money, and his magnum opus with Anna Schwartz, A Monetary History of the United States, 1867-1960, all stand as great achievements.
But Friedman did not restrict his genius to the academy, he used economics to forcefully argue for a better world. Friedman was a key player in ending the draft, he championed school choice and drug legalization. He not only wrote about floating exchange rates he helped to bring them into being. The end of welfare as we know it? Friedman's negative income tax was an inspiration.
Milton Friedman loved liberty. Even today, chills run down my spine whenever I read the slashing opening to Capitalism and Freedom.
President Kennedy said, "Ask not what your country can do for you - ask what you can do for your country."... Neither half of that statement expresses a relation between the citizen and his government that is worthy of the ideals of free men in a free society.
Damn right.
On a personal note, Friedman inspired my book, Entrepreneurial Economics: Bright Ideas from the Dismal Science, in which I said Milton Friedman was the greatest entrepreneurial economist of the twentieth century. It was thus a real thrill for me and a bringing around of the circle when I sent him a draft and he wrote back praising the book (see the back cover!).
He will be missed.
Posted by Alex Tabarrok on November 16, 2006 at 03:31 PM in Economics | Permalink
Comments
Great entry, Alex. I would be interested in stories about his warmth as a person. He had so many friends of different political persuasions, and I am regularly told that he was very generous with his time.
Posted by: Jason Voorhees at Nov 16, 2006 3:49:44 PM
Friedman quote seems kind of circular. If by freedom he meant lack of concern for other citizens, then its conclusion follows. But so what? It is just semantics.
I find it ironic that you would raise this ideal while applauding his support for an all-volunteer army. I wonder if Friedman would describe our soldiers as mercenaries. Or would he join Kerry and say they are stupid? Clearly, he would not applaud their patriotism.
Posted by: Gerard MacDonelll at Nov 16, 2006 3:52:51 PM
Gerard, what exactly are you talking about? He called for an all-volunteer army and that's precisely what we have. Insofar as said army is concerned, he did not believe that those troops were serving some amorphous greater good but rather enlightened self-interest, and that anybody who couldn't see such enlightened self-interest shouldn't serve. In this, BTW, his views matched Robert Heinlein's.
Posted by: Bernard Guerrero at Nov 16, 2006 4:00:17 PM
The intellectual impact of such a great thinker has been such a distinct part of me that his death today stirred so many strong memories of the intelectual awaking that was reading his materials. An admirable hero indeed.
Posted by: Neil Cowley at Nov 16, 2006 4:20:57 PM
Gerard, the meaning of the quote depends on the definition of the word country. Milton did not mean it to refer to his fellow citizens, but to the state.
Posted by: josh at Nov 16, 2006 5:00:27 PM
It seems Friedman and Alex make the same mistake.
Namely, confusing "your country" with "your government".
Posted by: Davebo at Nov 16, 2006 5:37:41 PM
The first story I saw on this on Google News was from NPR. They included a short interview with Friedman from several years ago. The key point:
STAMBERG: Professor Friedman, let's talk some, though, about the human cost of the free market, because we all know that everything free comes with a price, and very often the price has been tremendous hardships and insecurities. I wonder what it would take to make the free-market system work and not take too heavy a toll on the extremely poor, the people at the very bottom rungs?
FRIEDMAN: Well, I can't agree with the assertions you're making. You have to compare one system with another. There's no point in comparing an actual, operating system with an ideal system that doesn't exist. I would say that, in contrary to your generalization, the free market has involved less hardship, has imposed far less of a cost than almost any alternative system. Can you compare any of the costs of the free market with the costs that were imposed by, let's say, either the Soviet Union or China?
Posted by: Sean at Nov 16, 2006 5:40:01 PM
Davebo, I don't think he was necessarily talking about the government, but the idea that a "country" was some kind of entity that we should all be loyal and patriotic toward. I think this is exactly how, Kennedy meant it, and exactly why Friedman was right.
Posted by: josh at Nov 16, 2006 6:26:19 PM
Actually Sean, I liked the end of that interview even better.
Guy: Russian Taxi Drivers say it's better there than here
MF: Why don't they go back?
Guy: ummmmm
MF: Thought so
Posted by: BillWallace at Nov 16, 2006 6:33:06 PM
Josh, That's exactly why its contradictory. An all-volunteer military requires either that members of our military are simple mercenaries, or there exists "some kind of entity that we should all be loyal and patriotic toward." JFK was asking his fellow citizens to be interested not only in their own wellbeing but also that of their fellow countrymen - and the world:
In the long history of the world, only a few generations have been granted the role of defending freedom in its hour of maximum danger. I do not shank from this responsibility - I welcome it. I do not believe that any of us would exchange places with any other people or any other generation. The energy, the faith, the devotion which we bring to this endeavour will light our country and all who serve it -- and the glow from that fire can truly light the world.And so, my fellow Americans: ask not what your country can do for you - ask what you can do for your country.
My fellow citizens of the world: ask not what America will do for you, but what together we can do for the freedom of man.
Finally, whether you are citizens of America or citizens of the world, ask of us the same high standards of strength and sacrifice which we ask of you. With a good conscience our only sure reward, with history the final judge of our deeds, let us go forth to lead the land we love, asking His blessing and His help, but knowing that here on earth God's work must truly be our own.
Milton Friedman dedicated large portions of his life not simply to academia and theory, but in attempting to enact applications of those ideas. It seems unlikely he did so simply for his own good. He was attempting to do good for his countrymen and fellow man the best way he knew how.
Posted by: Jake at Nov 16, 2006 6:35:01 PM
'I wonder if Friedman would describe our soldiers as mercenaries.'
That was what General Westmoreland called them to Friedman's face, saying he wouldn't want to command an army of mercenaries. Friedman responded with: 'General, would you rather command an army of slaves?'
Westmoreland: 'I don't like to hear our patriotic draftees referred to as slaves.'
Friedman: 'And I don't like to hear our patriotic volunteers referred to as mercenaries'
Posted by: Patrick R. Sullivan at Nov 16, 2006 6:41:15 PM
"An all-volunteer military requires either that members of our military are simple mercenaries, or there exists "some kind of entity that we should all be loyal and patriotic toward."
Jake, one might join the military to defend the life and freedom of your family from agression. That would certainly be my motive.
Posted by: David Andersen at Nov 16, 2006 7:01:52 PM
Jason Voorhees,
Walter Block has a very endearing and personal article detailing his remembrances of Dr. Friedman:
http://www.mises.org/story/2393
Posted by: James at Nov 16, 2006 7:02:16 PM
To David Andersen,
Would the aggression you have in mind be that committed by the U.S. Tax
State against the taxpayers?
Posted by: Bill Stepp at Nov 16, 2006 8:52:53 PM
Alex,
"Damn right"?
What about "damn left"?
Posted by: jim at Nov 16, 2006 8:59:11 PM
In his memory, let’s make sure that we don’t sell out to conservatives or liberals merely for the sake of political gain.
Posted by: Chairman Mao at Nov 16, 2006 9:07:26 PM
FRIEDMAN: Well, I can't agree with the assertions you're making. You have to compare one system with another. There's no point in comparing an actual, operating system with an ideal system that doesn't exist. I would say that, in contrary to your generalization, the free market has involved less hardship, has imposed far less of a cost than almost any alternative system. Can you compare any of the costs of the free market with the costs that were imposed by, let's say, either the Soviet Union or China?
I have a problem with this, because this argument is often used to justify changes that would make the market more laissez-faire than it is *now* -- to get rid of bits of social democratic compromise that exist in nearly all the richest and most free countries.
If you're being asked "Why don't you support thus and so extra regulation to end this problem we're seeing now", then "look at what happened when the chinese tried that" is a pretty reasonable answer.
When you're asked about a putative laissez-faire program that doesn't actually exist anywhere in practice, it's an entirely different matter. Many freer market reform suggestions are justified primarily by theory.
I don't get the sense that Friedman espoused ripping up the welfare state and eliminating progressive income tax before dismantling trade barriers and the nanny state, but there are many who use his arguments to justify starting with reforms which are on the dicey side for long-run effects on the population as a whole, while very obviously good for the rich.
It's not clear from the piece ripped from context, just what he was asked about there, thus whether that was actually a fair response.
Posted by: Michael Sullivan at Nov 16, 2006 11:55:18 PM
"Many freer market reform suggestions are justified primarily by theory."
As are many social-political experiments going the other way.
Posted by: David Andersen at Nov 17, 2006 12:02:49 AM
Bill Stepp - I was actually referring to defending myself, family (and property) from military aggression. I can envision a day, however, when the state crosses a line such that taking up arms against it is required. Hopefully it won't come to that in the US.
Posted by: David Andersen at Nov 17, 2006 12:05:09 AM
David Anderson:
Jake, one might join the military to defend the life and freedom of your family from agression. That would certainly be my motive.
Is that not "some kind of entity that we should all be loyal and patriotic toward"? Furthermore, as the US military has not been asked to directly defend the United States in at least 60 years (at least, not conventional forces) which predated the all-volunteer military by about two generations (the grandchildren of WWII vets) this reasoning rings a bit hollow as a justification of a national military.
In fact, a similar argument could be put forth for any governmental program: I pay my Social Security/income/property/whatever tax because it will fund programs that help/support/improve the lives of my family - if only by helping to provide a stable, safe and prosperous society in which they can live.
In other words, if you do something for some portion of the population that aids the entire population it is indistinguishable from doing so for the entire population. The only difference is the level of altruism.
Posted by: Jake at Nov 17, 2006 1:13:40 AM
Actually jake you pay your taxes because if you don't then thugs with badges and guns show up at your door, shoot your dog, and lock you up. It is not altruism that motivates people to pay their taxes.
There is a world of difference between seeing a problem and donating your own money to alleviate it, or using your money to give someone a positive sum job, and having government legally steal your money and give it to someone on the condition that they don't work.
Posted by: happyjuggler0 at Nov 17, 2006 3:42:13 AM
Jake, I guess it is the difference between doing something for the population living in your country and doing something for the glory of your "country." I think many people join the military with both motives in mind. I think the second one is not so good.
Also, why did JFK not say "your fellow man"? There is a reason he said country.
Posted by: josh at Nov 17, 2006 8:50:29 AM
Josh:
Jake, I guess it is the difference between doing something for the population living in your country and doing something for the glory of your "country." I think many people join the military with both motives in mind. I think the second one is not so good.Also, why did JFK not say "your fellow man"? There is a reason he said country.
He essentially did:
In your hands, my fellow citizens, more than mine, will rest the final success or failure of our course. Since this country was founded, each generation of Americans has been summoned to give testimony to its national loyalty. The graves of young Americans who answered the call to service surround the globe.Now the trumpet summons us again--not as a call to bear arms, though arms we need--not as a call to battle, though embattled we are-- but a call to bear the burden of a long twilight struggle, year in and year out, "rejoicing in hope, patient in tribulation"--a struggle against the common enemies of man: tyranny, poverty, disease and war itself.
Can we forge against these enemies a grand and global alliance, North and South, East and West, that can assure a more fruitful life for all mankind? Will you join in that historic effort?
JFK called people to serve their fellow man.
----
Actually jake you pay your taxes because if you don't then thugs with badges and guns show up at your door, shoot your dog, and lock you up. It is not altruism that motivates people to pay their taxes.There is a world of difference between seeing a problem and donating your own money to alleviate it, or using your money to give someone a positive sum job, and having government legally steal your money and give it to someone on the condition that they don't work.
How decidedly un-American. Here I thought that the Founding Fathers constructed a democratic republic involving specific rights so that thugs with guns don't show up at your door and shoot you and your dog.
The unmitigated gall to ask each citizen to contribute proportionately to their prosperity or even, as Adam Smith endorsed, in greater proportions proportionate to their prosperity. To think such a system requires that laws passed by representatives of the people, restricted by a recognized human rights, be adhered to! And just imagine, this system is so flawed that it actually requires people to pay their taxes in order to live in and benefit from the society this government makes possible through its efforts to "establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty".
...
Anarchy is the natural conclusion of the blind - and frankly petulant - claims of libertarianism that rejects all government, including taxation, at some how tyrannical. Its an empty and fruitless philosophy.
Posted by: Jake at Nov 17, 2006 10:15:05 AM
Jake,
Nice try at mislabeling, but I am not an anarchist, and I concede a small amount of taxes of some sort are necessary to fund police, fire, and genuine national defense.
It is another thing entirely to claim that the bulk of what government taxation is for is actually earmarked for the things spelled out in the preamble to teh constitution that you listed. On the contrary, they are antithetical to such liberty, justice and tranquility. I am disturbed that an otherwise intelligent person could somehow read those lines you wuoted and conclude they mean the opposite of what they say and that they are a justification for coercive government redistribution from the unpowerful to those with connections, bribes, and general anti-liberty characteristics that do nothing to further the common welfare, merely the welfare of the annointed few at the expense of the common "man in the street".
Google for minarchist if you want to find out where I stand, you'll find my views squarely in line with the constitution you so aptly quoted from which actually defend my point of view.
Posted by: happyjuggler0 at Nov 17, 2006 1:17:17 PM
Milton Friedman's contribution should be seen in the light of his contribution to Chile under a military dictatorship. How did the economy in that country fare? Were people better off when the Government adopted his policies?
When Kennedy said '..but what you can do for your country'. Well what did Kennedy do for the US? He set up a form CIA assassination squad. It was already in the process of evolution under Eisenhower but Kennedy managed to kick it into proper shape with the help of the Chicago mafia mob and thug Giancana. Then there was the Cuban Missile Crisis. This is not entirely irrelevant to the assassination team because the Kennedy's were obsessed with killing Castro. Castro turns to the Soviet Union for help when America invades Cuba at the Bay of Pigs and learns of the undying obsession of the mafia-manned CIA to kill him.
Friedman and Kennedy had a lot in common. They were intelligent and able to spin as much bullshit as was required to serve their purposes. They had powerful thuggish friends in key positions of national power.
Long live free man. Friedman is dead.
Posted by: Contribution at Nov 18, 2006 8:12:16 PM
