Today would have been Milton Friedman’s 100th birthday. Friedman, of course, is probably the most influential free-market economist of the past 100 years, and a personal hero of mine. In the 1960s, when Keynesian economics had ruled the economic roost for more than three decades, it was Friedman who stood up and proclaimed its failures. Although virtually a lone voice in the wilderness in those dark days of unquestioned Keynesian dominance, through the sheer force of his intellect and personality, he held his ground and gradually began to win over converts to the free-market cause. It was Friedman, and his increasing band of followers, who spearheaded the resurgence of classical, free-market economic principles in the late ’60s and ’70s which ultimately culminated in the election of Ronald Reagan in 1980 and the ensuing Reagan economic boom.
Friedman had a unique ability to distill complex economic theory into simple concepts that anyone could understand. On the eve of the Reagan Revolution, Friedman brought free-market economics into people’s living rooms with his ground-breaking “Free to Choose” television series on PBS. These videos, as well as countless other videos, are just as applicable today as they were when produced decades ago (I continue to use them in the classroom on a regular basis). The fundamental conflict between free-market capitalism and socialism is still with us, and despite all the evidence that socialism doesn’t work, there are still plenty of those who ignore the historical record and believe that socialism can work if only we try it one more time. The nightmare we’re all living through known as the Obama Administration is only the latest example of socialism’s false promise.
To illustrate just how timeless Friedman’s theories were, let’s take a couple “issues” which Obama has put forward as a reason to re-elect him and his fellow travelers. First, Obama’s class-warfare argument that society will be better off if only we raise taxes on Obama’s evil “millionaires and billionaires”. In other words, that imposing punitive, confiscatory taxes on the nation’s most productive will somehow benefit the nation’s least productive. In 1979, during a famous appearance on the Phil Donahue show, Friedman addressed this very topic in response to a question from the audience:
Friedman’s point is as valid today as it was 33 years ago. Too bad the Republican candidate, Mitt Romney, chooses to run away from capitalism rather than explain its virtues, as Friedman does.
The second issue Obama continuously harps on is this notion that free market economics is evil. Obama continuously derides free-markets as “you’re on your own economics”, preferring instead that we transition to some kind of European collective system which is just a nice way of saying … socialism. Of course we can’t point this out because, to call Obama a socialist is unnecessarily provocative — racist even — and may alienate some of those cherished “moderates” with which we’re so obsessed. I digress.
Implicit in Obama’s argument is the standard socialist line that a free system is inherently “unfair”, and that the vast majority of people would be forced to live at the whim of a small cabal of evil, heartless capitalists who would exploit us (be selling us products we want at prices we’re willing to pay, presumably). The alternative, according to this line of thought, is that we’d be much better off if we lived at the whim of an all-powerful, yet beneficent government who’d protect us from the aforementioned greedy capitalists and create a utopian land of plenty. In response to a question by Donahue, Friedman discussed the folly of this fallacious socialist doctrine:
I always find it amusing when I hear that Obama is the voice of a new generation or our first “modern” president. There’s nothing new or modern about Obama — or his ideas. The redistributionist dogma with which Obama was indoctrinated on Ivy League campuses and the streets of Chicago has remained the same since long before Che Guevara donned his first black beret. Whether we call this ideology socialism, Marxism, or progressivism, nothing has changed other than the names of its advocates and practitioners. And it still doesn’t work. Fortunately, the counter arguments haven’t changed either. Now if only we had a candidate who was fluent in those counter arguments.
I’ll leave you with a couple excerpts from two prominent economists, Thomas Sowell and Stephen Moore. Both have written pieces commemorating Friedman’s birthday, and lamenting the fact that he’s no longer with us to help lead the charge against Obamanonomics. First I’ll excerpt Sowell, one of Friedman’s most famous protégés:
If Milton Friedman were alive today — and there was never a time when he was more needed — he would be one hundred years old. He was born on July 31, 1912. But Professor Friedman’s death at age 94 deprived the nation of one of those rare thinkers who had both genius and common sense.Most people would not be able to understand the complex economic analysis that won him a Nobel Prize, but people with no knowledge of economics had no trouble understanding his popular books like “Free to Choose” or the TV series of the same name.
In being able to express himself at both the highest level of his profession and also at a level that the average person could readily understand, Milton Friedman was like the economist whose theories and persona were most different from his own — John Maynard Keynes.
Like many, if not most, people who became prominent as opponents of the left, Professor Friedman began on the left. Decades later, looking back at a statement of his own from his early years, he said: “The most striking feature of this statement is how thoroughly Keynesian it is.”
No one converted Milton Friedman, either in economics or in his views on social policy. His own research, analysis and experience converted him.
As a professor, he did not attempt to convert students to his political views. I made no secret of the fact that I was a Marxist when I was a student in Professor Friedman’s course, but he made no effort to change my views. He once said that anybody who was easily converted was not worth converting.
I was still a Marxist after taking Professor Friedman’s class. Working as an economist in the government converted me.
It’s a tragedy that Milton Friedman—born 100 years ago on July 31—did not live long enough to combat the big-government ideas that have formed the core of Obamanomics. It’s perhaps more tragic that our current president, who attended the University of Chicago where Friedman taught for decades, never fell under the influence of the world’s greatest champion of the free market. Imagine how much better things would have turned out, for Mr. Obama and the country.
Friedman was a constant presence on these pages until his death in 2006 at age 94. If he could, he would surely be skewering today’s $5 trillion expansion of spending and debt to create growth—and exposing the confederacy of economic dunces urging more of it.
In the 1960s, Friedman famously explained that “there’s no such thing as a free lunch.” If the government spends a dollar, that dollar has to come from producers and workers in the private economy. There is no magical “multiplier effect” by taking from productive Peter and giving to unproductive Paul. As obvious as that insight seems, it keeps being put to the test. Obamanomics may be the most expensive failed experiment in free-lunch economics in American history.
Equally illogical is the superstition that government can create prosperity by having Federal Reserve Chairman Ben Bernanke print more dollars. In the very short term, Friedman proved, excess money fools people with an illusion of prosperity. But the market quickly catches on, and there is no boost in output, just higher prices.
Next to Ronald Reagan, in the second half of the 20th century there was no more influential voice for economic freedom world-wide than Milton Friedman. Small in stature but a giant intellect, he was the economist who saved capitalism by dismembering the ideas of central planning when most of academia was mesmerized by the creed of government as savior.
Friedman was awarded the Nobel Prize in economics for 1976—at a time when almost all the previous prizes had gone to socialists. This marked the first sign of the intellectual comeback of free-market economics since the 1930s, when John Maynard Keynes hijacked the profession. Friedman’s 1971 book “A Monetary History of the United States,” written with Anna Schwartz (who died on June 21), was a masterpiece and changed the way we think about the role of money.
More influential than Friedman’s scholarly writings was his singular talent for communicating the virtues of the free market to a mass audience. His two best-selling books, “Capitalism and Freedom” (1962) and “Free to Choose” (1980), are still wildly popular. His videos on YouTube on issues like the morality of capitalism are brilliant and timeless.