Happy 99th Birthday, Milton Friedman

by Don Boudreaux on July 31, 2011

in Civil Society, Dinner Table Economics, Economics

During the second semester of my freshman year of college (Spring 1977) – the semester in which I was first exposed to economics – Bill Field (then a professor of economics at my alma mater, Nicholls State University in Thibodaux, LA) recommended that I read the writings of Milton Friedman.  Of course, as an 18-year old who’d read very little of anything beyond the sports pages of the Times-Picayune (and, back then, also the sports pages of the States-Item), I’d never heard of Milton Friedman.

“Dr. Field” – as I’d called Bill for many years – let me borrow his copy of Friedman’s collection of Newsweek columns, An Economist’s Protest.  I was blown away by the logic, the sensibleness, and the passion channeled toward the goal of maximum human dignity.

That summer, I subscribed to Newsweek simply to get Friedman’s columns (which, if I recall correctly, appeared in every third issue).  (I read Paul Samuelson’s Newsweek columns, too, of course; they left me cold.)  I believe that the first column of Friedman’s that I read from an actual issue of Newsweek was the one in the July 4, 1977 issue.  Its title is “Fair versus Free.”  (Here’s a reprint.)  It remains today just as I recall it from 34 years ago: powerful and compelling.  From it I extract today’s Quotation of the Day:

When “fairness” replaces “freedom,” all our liberties are in danger. In Walden, Thoreau says: “If I knew for a certainty that a man was coming to my house with the conscious design of doing me good, I should run for my life.” That is the way I feel when I hear my “servants” in Washington assuring me of the “fairness” of their edicts.

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{ 45 comments }

Peter P. July 31, 2011 at 1:11 pm

Friedman and his classic “Free To Choose” series from 1980 and the 1990 update.

http://www.freetochoose.tv/

Stone Glasgow July 31, 2011 at 1:13 pm

But free markets just let the evil corporations decide what is fair, and we all know they think polluting and sweatshops and monopoly and putting little guys out of business and underpaying workers and selling junk are their idea if fair. We need a man-god on earth to decide. Like Obama. Or maybe Paul Krigman.

ArrowSmith July 31, 2011 at 2:10 pm

Obersturmführer Krugman is perfect.

muirgeo July 31, 2011 at 3:41 pm

Stone,

So you think the rules are fair? No current advantage for corporations over small business? No significant amount of rent seeking? I never quite understand comments like the one you wrote above.They seem filled with logical inconsistencies and double standards.

Ken July 31, 2011 at 4:14 pm

muir,

Who writes and enforces those rules? Who is giving advantages to corporations over small businesses? Who is paying money to those rent seekers you hate so much?

Of course the answer to all three of those questions is the government. The government has the power to write unfair rules, provide special advantages to favored groups, and line the pockets of politically favored because people like you vote for the gov to have these powers.

Your comments are filled with logical inconsistencies and double standards.

Regards,
Ken

Greg Webb August 1, 2011 at 9:35 am

Nicely written!

LowcountryJoe July 31, 2011 at 5:26 pm

I never quite understand comments like the one you wrote above.

Nor any other other comments from a pro-liberty perspective, for that matter.

brotio August 1, 2011 at 12:20 am

Yasafi,

How many people at this Cafe can you cite, other than yourself, who think that ADM, Chrysler, GE, GM, or any other corporation should receive corporate welfare? You are the only corporatist at the Cafe. You are only angry that other corporatists manage to secure welfare for their favorite corporations, just like you do.

Nicky J July 31, 2011 at 1:22 pm

“The ‘social security’ program is one of those things on which the tyranny of the status quo is beginning to work its magic.” – Milton Friedman in “Capitalism and Freedom”

muirgeo July 31, 2011 at 3:48 pm

Yes … the horror… people retiring with a degree of dignity and security and no more poor farms. Just maybe this status quo is a little less tyrannical… but I guess you guys know what is best for the overwehlming majority who the support social security system.

Ken July 31, 2011 at 3:57 pm

muir,

“people retiring with a degree of dignity and security”

How dignified is it to have a group people take money from young people and redistribute it to a politically powerful group, like old people? And you’re talk about security is a sham. Obama for the past few months has been threatening to cancel those “secure” SS checks if he doesn’t get his way.

“but I guess you guys know what is best for the overwehlming majority ”

Absolutely not. I don’t claim to have the knowledge necessary do develop a plan for your retirement. In fact, I explicitly acknowledge to not have the knowledge necessary to plan your retirement.

Additionally, I recognize no gov bureaucrat hasthis knowledge either. This is why the gov shouldn’t take your money and replace it with IOUs and a couple winks and nods. You are in the best position to know what to do for your retirement and you are in the best position to plan for it. The idea that a one size fits model that is a gigantic Ponzi scheme is dignified or secure only marks you as an unserious thinker.

Regards,
Ken

LowcountryJoe July 31, 2011 at 5:29 pm

…but I guess you guys know what is best for the overwehlming majority who the support social security system.

Ask your daughters if they enjoy contributing to Social Security. If they do, remind them that the promises that were made by politicians are going to radically change or be totally broken in the future. Come back to us once you’ve had this conversation and let us know what they said.

Gil August 1, 2011 at 12:36 am

I thought you would agree with the statment “but I guess you guys know what is best for the overwehlming majority who the support social security system”, i.e.: let the private markets sort the problems out.

Ken August 1, 2011 at 1:00 am

Gil,

Apparently, you failed to read my comment above or understand what it means. Something I’m not really surprised at, though.

Regards,
Ken

Gil August 1, 2011 at 7:26 am

Eh? Do you believe that “the S.S. system shouldn’t exist at all and the problems that it is supposed to solve should be provided by the free market” is an opinion or fact?

LowcountryJoe August 1, 2011 at 8:54 am

I thought you would agree with the statment “but I guess you guys know what is best for the overwehlming majority who the support social security system”, i.e.: let the private markets sort the problems out.

What separates many libertarians from you so-called ‘progressives’ is that we generally do not profess to know what’s best for others. That’s why many of our default positions are to return liberty and decision-making back to the individual so that they could handle their own affairs. There are no reasons I can think of why progressives cannot voluntarily enter an economic alliance where they contribute to social safety-net programs for themselves in the group. But that’s not how your side rolls! And it does not roll that way because you’ve convinced yourselves that you know what’s best for others.

Ken August 1, 2011 at 9:53 am

Gil,

“Do you believe that “the S.S. system shouldn’t exist at all and the problems that it is supposed to solve should be provided by the free market” is an opinion or fact?”

“Should” or “should not” questions are by definition opinions. Of course my opinion is that SS should not exist.

However, it is a fact that the market would handle people’s retirement planning MUCH better than the gov, especially SS, since it yields a negative return.

Regards,
Ken

Methinks1776 July 31, 2011 at 6:12 pm

Only a fool and a thug like you can think for one second that there’s dignity in robbing others.

Ken July 31, 2011 at 6:39 pm

Methinks,

It’s also not very dignified to be dependent on the government in old age.

Regards,
Ken

Dan J August 1, 2011 at 12:35 am

Is there dignity for anyone to be dependent on others for sustenance, aside from children?
The only reason for most politicians to support more entitlements is the power that it yields. The very reason for govt attempts at putting more people under the thumb of federal govt is to wield more power.

Gil August 1, 2011 at 7:28 am

Yeah, to the dumpsters with them.

Ken August 1, 2011 at 9:55 am

Gil,

SS does NOT keep anyone out of the dumpsters. If you break down society by age brackets, you’ll find the most wealthy age bracket to be the older segments. The poorest will be the younger segments. Flaking for SS is nothing but flaking for taking from the poor to give to the rich.

Regards,
Ken

Gil August 1, 2011 at 7:27 am

Why oh why then did you come to the land of thieves?

Ken August 1, 2011 at 11:03 am

Gil,

Have you ever tried to do business in Russia? While the US country has it’s fair share of thieves in government and business, they are pikers compared to Russians.

It’s like you think things exist in a vacuum without any context or comparisons.

Regards,
Ken

Gil August 1, 2011 at 11:07 am

Russia and the U.S.(S.)A. aren’t the only nation in the world.

Ken August 1, 2011 at 11:25 am

Gil,

Methinks came from Russia, which is why I mentioned Russia. But to answer your question, the US has fewer thieves than most countries. The US also has more opportunities for immigrants than any other country on earth.

Despite how wonderful it is in the US compared to the rest of the world, the US has its fair share of problems. The biggest problem is the growing amount of mercantilism.

Regards,
Ken

Gil August 2, 2011 at 2:45 am

The U.S. sure isn’t the “least worse” nation in the world. Maybe Methinks feels trapped with the emigrations costs.

indianajim July 31, 2011 at 5:22 pm

Alternative QUOTE OF THE DAY (from Friedman’s linked op ed.):

“If we applied the present doctrine of “fairness” to a football game, the referee would be required after each play to move the ball backward or forward enough to make sure that the game ended in a draw!”

Methinks1776 July 31, 2011 at 6:16 pm

Yes, but the way it’s actually applied is to makes sure the winner is the team which bought the referee.

indianajim August 1, 2011 at 12:27 am

And there is less wealth at the end of the “game.” The politicians are end up with much greater relative wealth. If humans crave status (depending on relative wealth) as well as absolute wealth, the behavior of politicians becomes explicable.

Krishnan July 31, 2011 at 7:28 pm

The mystery (to me) is why everyone is not captivated by what Milton Friedman wrote and spoke about … I cannot understand why everyone does not understand the simple notion of free markets and free peoples – That what passes for “capitalism” is not companies/corporations getting special deals and special tariffs and so on … that when people are indeed free to make choices, life gets better for all … time and time again we have seen that in history – and yet, people cling to some ideal that they have in their mind about “redistributing” because “life is unfair” …

“Free to Choose” is a classic – the TV show, the Book. It should be must reading (and watching) for everyone – simple examples to illustrate complex concepts – enough information to allow us to think about problems we have not seen before – the impact of Government, of regulations, of currency manipulations – of choice for people …

Don Boudreaux July 31, 2011 at 7:45 pm

I agree. But let me propose an admittedly simplistic hypothesis: many people are hard-wired to be unable to grasp the fact that wealth is not fixed-in-size – and, hence, hard-wired to be unable to grasp the fact that voluntary exchanges are mutually beneficial.

I don’t propose this hypothesis in any serious scientific spirit to explain what you and I both find so difficult to comprehend. (The world is way too complex for any such simplicity.) But, just for fun, I do wonder how robust this hypothesis is if put to explaining the fact that so many people cannot grasp the lessons offered to the general public by Milton Friedman.

Krishnan July 31, 2011 at 8:45 pm

I wonder if a questionaire can be designed to test what people DO understand about what “wealth” is (and how it grows …) – I imagine there are many who think that all it takes for the poor to get rich is to give them money that can come off printing presses … As to why they can exchange what they have for “things” escapes them …

Francisco D’Anconia’s speech on money as the tool in Atlas Shrugged is another good tutorial on “money” and indirectly about “wealth” (and human effort)
http://theautonomist.com/autonomist/moneyspeech.html

RC July 31, 2011 at 10:03 pm

Don,

I think you are confusing two issues here. One can admire free-market capitalism for the huge overall wealth it generates while simultaneously be troubled by the inequalities it generates, troubled that one hard-working human being may have 100 times less than another hard-working human being (or, in some cases, a human being that does not necessarily even work hard, like a heir).

The real problem is that things could be far worse: you can have neither wealth or fairness. And that, sadly, is often the result of government intervention, no problem with conceding that.

Regards,
RC

Krishnan July 31, 2011 at 10:36 pm

There is much written about the issue of “fairness” and “inequality” – the short summary is that by almost any measure, the free market system has simultaneously reduced inequality and increased wealth for all … Yes, I am aware of many “statistics” that show that the “gap between the rich and poor is increasing” and so on … they use selected pieces of information to amplify something that causes class and wealth envy, in my opinion. Class warriors often use “jets” for example to try and remind the “poor” that while they have to travel in “commercial” aircraft, the “rich” can travel in “their own aircraft” and so on …

The really rich in this world do have many things that ordinary people do not – but what is incredible and amazing is that there is so much that the rich have/enjoy that the ordinary/poor can afford to purchase and enjoy – THAT was not true just a few decades ago – Today, just about anyone has access to medicines that can save lives – a few years ago, even the “rich” used to die of diseases we would consider “ordinary” and easy to deal with … Today, the “rich” may have many, many computers and iPods and whatnot – just about any electronic gizmo you can think about, most people of reasonable means can afford them

Flying in an airplane used to be the domain of the “rich” – I mean, the BIG LARGE commercial planes – The cost of flying has come down dramatically (inflation adjusted) so that today, almost anyone can imagine taking a plane ride for a vacation (TSA allowing) …

it is NOT just the ratio of the wealth by the “rich” to that of the “poor” that is relevant – but what is it that can be purchased by the money we have that is critical – today, the purchasing power available to everyone is incredible – We (all, poor and rich) enjoy access to an amazing number of goods and services that were simply out of reach to all but a select few till recently …

So, oh yes, capitalism and free enterprise has REDUCED the disparity in “purchase power” between the rich and the poor … It has been an incredible ride in upward mobility …

RC August 1, 2011 at 1:08 am

Krishnan,

Fair point.

I’ll just point out that purchasing power is not everything. Having plenty of money in a bank account also dramatically increases the well being of humans. It makes one more influential, it increases one’s social status and – most importantly – it drastically decreases uncertainty. Also, when one has a significant amount of savings, he/she may choose to decrease working hours in favor of leisure time, the most precious source of well being for many.

Regards,
RC

Gil August 1, 2011 at 7:31 am

If “poor” people can access said good and services then they’re not poor.

Ken August 1, 2011 at 9:56 am

Gil,

Exactly. There are no “poor” people in the US, merely people with less than other Americans.

Regards,
Ken

Tom August 1, 2011 at 10:28 am

Should taking some part of the essential burden that comes with being a human being living on planet Earth from one person and placing it on the back as an added burden to another person be considered more fair than it would be if each of those two people bore just their own essential burden?

Existence in the Garden of Eden as described in The Book of Genesis may have been free from worry and free from feelings of insecurity but it was not an effortless existence.
There was no totally free lunch even in the Garden of Eden and there certainly isn’t anyplace else on the planet.

We are human beings.
We live on planet Earth.
We will obey the laws of physics–And so will our governments whether you or they think that is fair or not. The fundamental natural forces that shape, drive and govern the planet that we live on and the Universe that we live in are the ultimate arbitrars of what is and what can be and, sorry, our concept of fairness is not a consideration to that panel of judges.

For government socialism to work as envisioned and as intended regardless of how well designed would require that the laws of physics thus the fundamental natural forces of electromagnetism and gravity be different from what they are. Get used to it. It will be the way that it will be. None of us gets a vote–not even Congress.

Ken August 1, 2011 at 1:11 am

RC,

“One can admire free-market capitalism for the huge overall wealth it generates while simultaneously be troubled by the inequalities it generates”

What troubles me is that you think envy is a virtue. What business is it of yours to worry about OTHER people’s voluntary trades done in a free market, aside from you being a busy-body? If people aren’t using force or defrauding others, what business is it of yours? You being “troubled” by inequality seems like you have a bad case of “keeping up with the Joneses”. Worry about yourself and mind your business.

Regards,
Ken

RC August 1, 2011 at 2:20 am

Ken,

Envy is not a virtue but justice is. And pardon me, but I see no justice whatsoever in a situation when one human has to work all his/her life to have what another earned in a month. Or worse yet, to have what one received for the mere fact of being born. Human effort is very precious for me and I haven’t seen an argument to convince me otherwise.

And too bad you didn’t pay attention to the last part of my post. I clearly indicated that state interference often makes things worse. I also praised capitalism for what it does: generate wealth systematically for all. I never rejected the idea that laissez-faire might be the best option for humanity.

Regards,
RC

Ken August 1, 2011 at 10:05 am

“I see no justice whatsoever in a situation when one human has to work all his/her life to have what another earned in a month.”

No one’s income should be limited by YOUR understanding of where income comes from. I am very well off, however, Bill Gates has 100,000 times more than I have. This is to be expected, since he has built one of the most successful companies in the world. Not only has his work been responsible for the job creation done at Microsoft, but he is also responsible for much of the job creation done in the software industry that built up in Seattle because of Microsoft.

People get paid according to the value they create in free markets. There is not doubt Bill Gates is responsible for trillions of dollars of productivity in the global markets, making his tens of billions in wealth completely reasonable.

“Or worse yet, to have what one received for the mere fact of being born. ”

Do you hate yourself or Americans simply for being born? Those who live in the US have inherited wealth beyond belief just a century ago and for the low low price of simply being born to another US citizen or born within the borders of the US.

“Human effort is very precious for me and I haven’t seen an argument to convince me otherwise.”

Human effort is precious. Ignoring or dismissing that effort because you don’t like or understand how much more valuable one persons efforts are over another is a fault of yours, not the markets.

I didn’t ignore the rest of your post, I just had no comments for it. Acknowledging that gov intervention does more harm than good doesn’t alleviate the obvious ignorance you have for wealth creation and earnings associated with that wealth creation.

Regards,
Ken

Daniel Shapiro July 31, 2011 at 11:10 pm

Interesting that you said this, Don, cause I once suggested the same point in my social and political philosophy class re the zero-sum view.

Rachel August 1, 2011 at 1:48 am

I agree with Friedman’s comment, “When “fairness” replaces “freedom,” all our liberties are in danger.” If we lived in a “fair” world, no one would be able to express themselves as you are all doing right now. It is because we live in a “free” world that we are able to express our beliefs without fear of being legally persecuted.

Greg Webb August 1, 2011 at 9:54 am

Milton Friedman was a marvelous speaker, writer, and thinker. He was a truly great economist who made complex ideas easy and fun to understand. His books and videos like Free to Choose still excite many people to study and understand economics. Happy, though belated, birthday wishes, Dr. Friedman!

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