One of the most absurd claims in George Akerlof’s and Robert Shiller’s book Phishing for Phools is this one, which appears on page 150:
Just let everyone be “free to choose,” says the mantra, and we will have an earthly paradise, as close to the Garden of Eden as our existing technology, our human capabilities, and the distribution of income will allow.
While it’s true that Milton and Rose Friedman, along with other libertarians and free-market conservatives who often use “free to choose” as a shorthand descriptor for a free society, believe that such a society results over time in better outcomes than are likely to be generated by less-free economic arrangements, it is emphatically untrue that the Friedmans – or any other respected libertarian writers – ever argued or even implied that free markets lead to something close to an earthly “Garden of Eden.” The Friedmans understood, and all other respected free-market advocates understand, that our world is one of trade-offs and not “solutions.” And so, indeed, as the options among which we are free to choose become both more numerous and more attractive, the costs that each of us incurs when exercising our freedom to choose rise. If for no other reason, such a world cannot possibly ever be an “earthly paradise.”
Moreover, the case for a free society is very much a case for minimizing the prospect of large-scale harm that is always at risk of being unleashed when societies are directed from the top. It is not a case that promises paradisiacal outcomes. Free-market advocates recognize that people differ in their tastes, their risk preferences, their judgments, their self-discipline, their talents, and their opportunities. And, therefore, free-market advocates recognize and accept the reality that many people will make not only choices that others judge to be ‘wrong,’ but also make choices that those who make such choices themselves later judge to be wrong.
Free-market advocates prefer to let even unwise adults remain free to choose than to use the state to oblige adults to choose as elites would have them choose. There is nothing utopian about such a vision of society. And by falsely accusing free-market advocates of being utopian, it’s as if Akerlof and Shiller are phishing their readers for phools into buying a faulty case for greater government intervention.