If you or your children have not been forced into the armed services in the past three decades—which you haven’t—thank Friedman. He was the intellectual sparkplug for the Nixon-era Gates Commission that convinced Nixon a volunteer army is both workable and the right thing to do.
If the dollars in your pocket are worth somewhere close to what they were a year ago, not 8 percent or more less, thank Dr. Friedman. His work as an economist convinced Federal Reserve chiefs, after the grim late 1970s dominated by stagflation (high inflation combined with recession), that we should strive to keep money supply growth low to restrain both inflation and unemployment. While the world’s central banks haven’t followed every technical detail of his plan, the old and destructive belief that government can tax and spend and inflate our way to prosperity is gone, and Friedman is why.
Friedman’s image may have been square—economics professor, PBS TV show host, advisor to Republican politicians from Goldwater to Nixon to Reagan. But what he stood for is as groovy as can be: Power to the people, man.
At the heart of all of Friedman’s scholarship
and activism was the idea in the title of his famous book and TV series: that
all of us should be free to choose. From who should have to serve in the
military to who should decide what a dollar is worth, Friedman has been 100
percent for taking power out of the hands of elites and government and handing
it to the decentralized decisionmaking of everyone, everywhere.
Who should
decide where our kids go to school, and who should control the money used to
pay for it? We should. Thus, Friedman’s advocacy for decades on
behalf of school choice and education vouchers, which became his main policy
focus during his later years through the efforts of the Milton and Rose Friedman Foundation.
Who should
decide what we can eat and how we enjoy ourselves? We should. Thus Friedman’s
controversial arguments for ending the war on
drugs.
Who should
decide how we get to spend our money? We should. Thus, Friedman’s writing and
speaking on behalf of tax and spending cuts anywhere and everywhere. The day he
won the Nobel in 1976, he was schlepping himself around to a talk in
Who should
decide the value of currencies in relation to other currencies—national
governments, or the decentralized decisionmaking of all economic players?
Friedman of course believed the latter, even when the idea was considered
outrageous, writing scholarly defenses of it from the 1950s until 1973 when floating exchange rates,
to a large degree thanks to his explaining their benefits, became a reality.
This is yet another constitutive part of the world we live in that Friedman can
be credited with. (“Floating exchange rates” means applying the basic free-market
logic about price controls to international currencies—that governments should
not attempt to dictate what their currencies sell for in terms of other currencies,
but allow the price to be set freely by market forces.)
When it came to how government
should best try to help citizens in need, Friedman made some concessions that
upset the more hardcore doctrinaire among his libertarian comrades, from Henry
Hazlitt to Murray Rothbard. He called, not for a complete end to any
government income floor, but for a “negative income tax,” an idea that helped
influence the earned
income tax credit. But even here, Friedman was, within the limits of
political reality as he saw it, fighting for individual autonomy, saying “no”
to countless social services and targeted, managed giveaways that treated the
poor as if other people knew what was best for them. The negative income tax just
gave the needy money and let them decide for themselves what was best for them
and how to craft their lives.
Friedman
won vital policy victories on the draft and the money supply. He was less
successful (though no less right) on his other efforts to empower the
individual. This is to be expected—he was a radical, and radicals aren’t going
to win all their fights. (He once referred to one of his heroes, Adam Smith, as
“a radical and a revolutionary in his time—just as those of us who preach
laissez-faire are in our times.”) But through a combination of his piercing
intelligence, his academic successes, and his unparalleled ability to explain
complicated ideas in understandable terms (honed during his nearly two decades
writing a column on economics for
Newsweek, from 1966-84, and coming to fruition with Free to Choose), he was the most successful purely intellectual
radical of the 20th century.
We live in Friedman’s World, to a
delightful degree—though of course not entirely. Even beyond his specific
policy victories, on the meta-level we have seen in his lifetime communism, the
antithesis of Friedman’s economic and social beliefs, die (and smuggled,
clandestine copies of his writings helped inspire
and educate dissidents in the former Soviet bloc).
But the whole point of his
intellectual and polemical project is that this world belongs to all of us. And
it should thus be shaped by our free choices, in economics and our private
lives. Even the highly technical economics work of which he was most proud—his
work on the consumption function and his “permanent
income hypothesis”--had important implications about why we should be free
from government economic management. His theorizing on that topic, which has
held up well in the field, implied that government fiscal manipulations for
short-term macroeconomic benefit aren’t apt to work, since people make their
consumption and saving decisions not based on their immediate income but on a
conception of a long-term “permanent income.”
It is for
Friedman’s insistence that we should be able to run our own lives free of
busybody manipulations in the economic and personal realms that he was so well
loved (and, alas, in some circles so
passionately hated)--the love manifest in the many personal tributes from
his comrades in the free-market fight. He tended to be personally respectful
and mindful of them all, great and small. We recognized that everything
Friedman did was based on belief in us—all of us—and an urgently felt desire
that we should be as free as it is possible for us to be. As the old song goes,
Milton Friedman truly lived
to make men free.
I have had,
luckily for me, my own Friedman Encounters, thought I don’t have any
particularly colorful tales to tell of them. He was a helpful, generous, and
methodical interview subject, unfailingly gracious and helpful for the three
hours over two winter afternoons we spent together in his elegant San Francisco
home way back in 1995 for my forthcoming book Radicals
for Capitalism (portions
of that interview were printed in Reason
in our June 1995 issue), all the way to the hour on the phone he gave me on Reason’s behalf late this August on the
Federal Reserve, which was used in our November issue interview
roundtable. He was unfailingly willing to give his time and his sharp
intellect in the furtherance of spreading his ideas, from start to finish, to Reason or in any forum.
He was an
economist of the
Milton Friedman was never a
politician. He could never make things
happen. He could only explain why they should, and let us decide. But still, to
a large degree because of him, the world is a different, and better, place.
When his first major work on politics,
Capitalism
and Freedom, came out in 1962, many of the best and brightest among us
still believed that the controlled economies of the Soviet bloc might indeed
someday bury us, and that government fiscal manipulations a la Keynes were the
key to a lasting and unmarred prosperity—mostly by fooling people into
misunderstanding what was really going on in the economy by the fake bursts of
prosperity that inflation can create in the short term (but never, as Friedman
helped prove, in the long term). Friedman foresaw the 70s stagflation crisis,
and his monetarist ideas helped guide the Federal Reserve policy that have
mostly curbed inflation since the early 1980s. With nothing but persuasion on
his side, he’s steered the ship of the world in a better direction.
To the extent that we choose to
heed Friedman in the future, we’ll have more even choices we can make for ourselves--and
be richer for it.
Senior
editor Brian Doherty (Bdoherty@reason.com)
is author of This
is Burning Man and the forthcoming Radicals
for Capitalism.