Friday, November 17, 2006

Milton Friedman

The Hill wishes to pay its respects to Milton Friedman, free-market guru who passed away Thursday at age 94.

I still have on my bookshelf a copy of Friedman's Free To Choose, written with his wife Rose and based on their popular PBS series of the same name. Both the book and the TV series did an excellent job of explaining free-market theory in simple, non-academic terms, and I recommend them to anyone who wishes to understand laissez-faire capitalism but doesn't have a lot of time for study. Deeper, and also rewarding, is his A Monetary History of the US, 1867-1960, co-written with Anna Schwartz. This study of the function of the US monetary supply over the years is surprisingly accessible, and has been praised by liberals and conservatives alike as one of the best books about US economic history ever written.

Having said that, I've never been a big fan of Friedman's capitalist utopianism. Specifically, I never had had much trust in the idea that if we remove nearly all regulation from the economy, we will be awash in so much prosperity that all our other problems will be diminished. The problem is that the constant economic churning necessary for the wealth creation process to work (what economist Joseph Schumpeter described as "creative destruction") leads to periodic social upheavals which free-marketeers like Friedman, Friedrich Hayek, and their followers tend to gloss over, when not writing them off completely as "externalities". They tend to downplay the importance of social stability to the profitability of business and individuals. This includes such things as having a well-maintained infrastructure, and an educated workforce paid decently enough to satisfy at least its basic needs. This stability has been the key to the growth of the post-World War II economy, and Friedman's ideas, if put into widespread practice, would destroy much of it. In Milton Friedman's ideal world, General Motors would not survive, Microsoft probably wouldn't either, and you and I would find our own personal survival to be a lot harsher.

Nevertheless, Milton Friedman was a powerful intellect and an equally gracious human being, and that combination is seen all too rarely in today's world.

Financial Times offers an excellent obituary of Friedman.

The Guardian's Richard Adams suggests that some of Friedman's ideas may have led to the big government that he so despised.

A couple of blogfriends, Corrente's Chicago Dyke and our house conservative IrishWalsh (scroll down) pay their respects.