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And What Was It that Milton Friedman Said about Business People and the Free Market?

Here’s a letter to the New York Times Book Review:

Reviewing Jeff Madrick’s Age of Greed, Sebastian Mallaby reports that “In Madrick’s telling, a cabal of conservatives [from the 1970s forward], driven first by greed and second by ‘extreme free-market ideology,’ gradually seized power” (“Why We Deregulated the Banks,” July 31).

Although Mr. Mallaby ably exposes problems with Madrick’s thesis, he misses its fundamental flaw – namely, the fact that adherence to free-market ideology undermines, rather than serves, the anti-social goals of greedy political insiders.  Businesspeople who successfully seek political influence nearly always demand protection from the free market.  They lobby for regulations and taxes (such as tariffs) that impose disproportionately heavy burdens upon their competitors and, hence, upon consumers.  In doing so, such greedy businesspeople follow a course unmistakably opposite the course they’d follow were they really free-market ideologues.

By failing to see that political power unleashes greed to be used to undermine rather than to protect free markets, Jeff Madrick is a useful, if unwitting, idiot for the ‘greedy’ interests that he fancies himself standing in opposition to.

Donald J. Boudreaux