TCS Daily

Milton Friedman's Gentle Persuasion

By Martin Fridson - November 19, 2006 12:00 AM

My direct contact with Milton Friedman was limited to an email exchange only a few months before his death. I had sent him a copy of my book, Unwarranted Intrusions: The Case Against Government Intervention in the Marketplace, as a way of acknowledging that Friedman's Capitalism and Freedom was the wellspring of all such works. The Nobel laureate graciously emailed me to say that he suspected I was on the correct side of the issues, but regrettably could not read the entire book as he was suffering from macular degeneration.

I was first exposed to Capitalism and Freedom in an introductory economics course at Harvard, an institution dismissed by some as a left-wing bastion. The book's free market propositions seemed eminently sensible to me, but as I have since discovered, a lot of well-educated individuals place Friedman's ideas on the lunatic fringe. Uttering the phrase "school vouchers," for example, is a reliable way of spoiling a dinner party.

Many people become unhinged at the mention of Milton Friedman's name because they consider it synonymous with "conservatism." If they were ever to read his actual opinions in Capitalism and Freedom, they would be surprised to discover how far he diverged from a host of dogmas commonly attributed to conservatives.

Writing in 1962, Friedman attacked the blacklisting of Hollywood screenwriters on the basis of their communist beliefs. He denounced the peacetime draft and defended contracts that required union membership as a condition of employment. Friedman did not wish to do away with the estate tax (lately renamed the "death tax") but merely to coordinate it with the income tax. Far from identifying with the conservative camp, Friedman called himself a liberal, albeit in the nineteenth century sense.

Libertarians claim Milton Friedman as one of their own, yet Capitalism and Freedom eschews the ideological purity of many present-day libertarians. Consider, for example, the question of transfer payments. A radio interviewer recently demanded that I name the clause in the Constitution that empowers Congress to transfer taxpayers' money to people utterly incapable of supporting themselves by virtue of physical incapacity. The talk show host underscored the point by playing the theme song of the 1950s television series Davy Crockett, King of the Wild Frontier. According to a possibly apocryphal story, Congressman Crockett voted on principle against an appropriation for a Navy widow.

Friedman, on the other hand, saw no objection to using the government's taxing power to help the poor. He wrote that everyone benefits from relieving poverty (how, in the case of the non-impoverished, he did not specify), but in a larger, impersonal society, not everyone will voluntarily shoulder a portion of the cost. It was a classic free rider argument. Friedman explicitly accepted "this line of reasoning as justifying governmental action to alleviate poverty."

A similarly non-strident tone runs throughout Capitalism and Freedom. For example, Friedman said he was inclined to believe that patent protection ought to be shortened from the prevailing seventeen-year term. "But this is a casual judgment on a subject on which there has been much detailed study and on which much more is needed," he wrote. "Hence, it is deserving of little confidence." This from a man already recognized as one of the world's preeminent economists!

The most fitting way to honor Milton Friedman's memory would be for his detractors to decry him, and for his admirers to extol him, for his actual beliefs, as opposed to their form-fitted notions of what he believed. There is no lack of controversy in Capitalism and Freedom's proposals, even without the baggage attached to them by supporters and opponents over the past 45 years.

At the moment, Congress is much closer to raising the minimum wage than abolishing it, as Friedman advocated. Any Senator or Representative bold enough to introduce a bill to privatize America's national parks would have difficulty finding a co-sponsor. Politicians, journalists, and voters continue to ascribe far more efficacy to the administration's "management the economy" through fiscal policy than the empirical evidence justifies.

Although Milton Friedman's eyesight began to fail him in his last days, his vision never waned.


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