Notes on Friedmanism

...The debates also made great theater...

...It is difficult since t h e science of economics was itself born out of the utilitarianism and liberalism of the eighteenth and nineteenth centuries and still serves as a useful analytic device in studying the behavior of individual "satisfaction maximizing" units...

...The simple prose and straighffopward approach of the book and series are intended to bring the Friedman philosophy of economics and politics ~o the common Yank...

...He argues, and few economists would disagree, that tariffs end up hurting all Americans in the long run by raising prices and inciting foreign retaliation...

...The final chapter blames the public at large for encourag!ng the growth of government and asks us all to expect less from government and demand a limit on spending...

...Both the book and television series are divided into three parts...

...The largest portion of the book is devoted to an analysis of public policy issues ranging from free trade to welfare programs, from consumer protection to inflation...

...But fhe case of Britain is an example over which conservative and classical liberal conceptions of political economy would differ...

...One discussion found Piven, a white female political scientist, lecturing Thomas Sowell, the black conservative economist, on what black Americans rea]]~ wanted in the fifties and sixties...

...Swearing allegiance to the new order did not save them...

...But how is this to be done...

...economists and calculators has succeeded, and the glory of Europe is extinguished forever...

...What distinguishes Milton Friedman, in my mind, is that although his popular writing borders on preaching, he has always been willing to calmly face opponents in open debate on his positions...

...Unfortunately, only Marxists have the courage today 1o call themselves "political economists," and although t h e i r conclusions may he wrong Ihcir concern with the interaction of the poli~y and economy is something conservatives would do welt to acquire...

...in their selectivity the Friedmans are no different than Galbraith or other political writers...

...Government activity in the economy is prohibited or required on the basis of immutable rules which guarantee those rights...

...In any political argument, particularly one intended for general consumption, it is necessary to simplify and only discuss those topics you consider crucial to your position...

...Perhaps Friedman can be criticized for being a bit too PanglossJan about the structure and workings of the modern economy--his critics are probably right in maintaining that direct social services will always be needed for the handicapped and infirm, that vouchers might lead to the segregation of children with learning disabilities in the public schools, and that inflation has more than just monetary causes--but this is forgivable...

...But the issue of political control of the economy can no longer be ignored within conservative thought, both because that control is an important political reality and will probably grow, and because the liberal model of rational individuals and abstract justice is flawed...

...Not only the .Jews themselves but virtually everyone in positions ,~f power in Europe and America found it dif}]cult to believe that the Nazis would actually hinder their war effort by killing Jews instead of using "I't{E AMERICAN SPECTATOR JUI.Y 1980 19...

...Who else but Milton Friedman could, in two sentences, so cogenlly sum up the conservative view on government and its relation m human freedom...

...Man is a species of being whose excellencc depends on his individuality: and wb_o t:an nei,'her bc g r e a t nor wise, bul in proportion as he is indcpendem...

...I quote Godwin, not to trip up the reader or label Friedman an anarchist, but to convey my profound disconcertion after completing Milton and-Rose Friedman's Free 7b Choose...

...To the conservative, political economy must go beyond the debate over rights...

...It is difficult to convey what a powerful and, in my view, distorting effect this philosophical framework can havc on one's political thinking...

...The Jews destroyed by the Nazis were ordinary people shipwrecked in a maelstrom the ferocity of which was beyond their imagining...

...Book reviewers in the major newspapers and journals of opinion, unused to such lucidity, haw: either been baffled by the book's simplicity or have complained that it is one-sided...

...Modern liberals reject both Friedman's political values and his description of what capitalism has produced...

...There were many Germans who were passive s u p p o r t e r s of the Nazi regime, s u p p o r t i n g it out of f e a r or calculation, but many --how many wc shall never know--were strong supporfcrs of Hi~lcr...

...What has been lost, says Michael Oakeshott, is the understanding that "politics is not the science of s e t t i n g up a permanent impregnable society, it is the art of knowing where to go next in the exploration of an already existing traditional sort of society...

...William Godwin, the English anarchist philosopher, penned these wordsin his Enquiry Concerning Political Justice in 1798...

...This is economics for Rotarians, not for graduate Mark T. Lilla is Assistant Editor of the Public Interest...

...To the conservative mind, the debate between the liberalisms is bewildering...

...A conscrvative political economy would haw: to reject the primacy of abst"act concepts of economic fi'eedom and maintain that the polity, and not the economy, is the moral legitimizer of public decisions...

...Why is it that the mere mention of his name casts university professors into fits of hyperventitation and angina ? The reason, I think, has to do with Friedman's political philosophy, which also has not changed since Capitalism and Freedom...

...The role of government is to act as market referee, making sure that we all play by the rules and, occasionally, organizing us to purchase "public goods...

...Public goods are goods of joint consumption, like national defense...

...some were brave, some were cowardly, most were stunned by the horror of it all...

...There is no need to rehash these arguments here...

...As Alexander Bickel put it, We cannot survive a politics of moral attack...

...It is easy to see why modern liberals react so strongly to this classical liberal...

...Modern liberals also maintain that free-market capitalism has not guaranteed these rights (including freedom) because it has degenerated into large blocs of corporate power ruling the economy...

...But balancing economic freedom against other values within a system of political liberty does not make a nation less free, though it may make certain individuals so...

...Mill...

...It i,s possible, I think, because American conservative thought has tong lived with a contradiction between its politics, which tend to be traditionally conservative, and its economics, which have been classically liberal...

...He also agrees that there has been market concentration in certain industries, but says that it is not as large a problem as some would believe and can be controlled through vigorous enforcement of antitrust laws...

...This economic freedom, Friedman is fond of saying, is an insufficient but necessary condition for political freedom...

...They may worry, for instance, that it puts so few limits on government action that it would justify much collectivization...

...There has always been a contradiction in American conservative thinking in its attempt to preserve tradition and authority within the polity, yet maintain with Milton Friedman that there are abstract rights to individual freedom in the economy...

...The most compelling argument for the market is not that it guarantees freedom but that in most cases government can only do worse, and prudential arguments of this sort are those to which conservatives should pay the most attention...

...Friedman maintains that economic freedom is necessary for political freedom, so when the British brought in Labour governments to e x e r t g r e a t e r 18 TIlE AMERICAN SPECTATOP, JUI.Y 1980 control over the economy and expand the welfare state he concludes that they must have become less free...

...Raising such questions seems essential, for [l~e phenomenon of a nation supporting or abetting (or even reluctantly going along with) policies whose loathsomeness the resources of lan,~uage cannot do justice to is puzzlingma i; --nomenon that we should at least try to understand in order to forestall its recurrence, not in Germany but elsewhere...

...The victims have been accorded so much attention in part because the story of the Third Reich has come to be seen as a story of interest mainly to Jews...

...But if his policy recommendations have become commonplace, why is it that Friedman himself still infuriates so many people...

...These arguments are not novel, but I believe they must be reasserted in an era when we seem to have no conservative sense of political economy and especially when the classical and modern liberals are often seen as representing the only ways of approaching issues of public policy...

...0Mark T. Lilla NOTES ON FRIEDMANISM Free to choose, y e s - - b u t free to choose a polity t h a t balances "economic freedom" a g a i n s t e v e r y t h i n g else...

...Our political problem is not one of getting rational individuals to agree on what abstract rights are, but in providing a ,peaceful and humane political system in which everyday men and women can live and be edified...

...T h i s conclusion may not sit well with those who consider themselves conservatives...

...economic freedom" and "social justice" have no meaning outside the context of an operating political system...

...Of course, this is a compliment to the Friedmans...

...Burke, who had no patience with economic reasoning in political affairs, lamented: The age of chivalry is gone...

...It is my guess that the next decade will prove that Milton Friedman has been right on most public policy issues, but fi~r all the wrong reasons...

...Since conservatives revel in politics the way it is, they must reject both views and maintain that the proper amount of political control over the economy is legitimately discovered through the political process and not through a priori reasoning...

...The argument that capitalism has made us extremely well-off is interesting to Friedman and is well used by him in debates, but *The direction of the relationship is probably reversed: The economic model has such a strong hold oll the mind of the professional economist that he may eventually think of politics in economic terms and become a classical liberal...

...And yet in the United States much more attention has been paid to the victims of Nazism than to the Nazis themselves...

...At a time when we are told by friends and foes alike that the public at large is turning to the right, is it not refreshing m read the work of an economist who writes good common sense...

...In general, then, the results ot market transactions are just, by definition, because justice is individual freedom in the market...

...The first few chapters of the book give the Friedman political and economic philosophy and contain arguments on the importance of the market for guaranteeing freedom, the genius of Smith's invisible hand, the genesis of government involvement in the economy, and the idea of equality...

...Friedman's views may not be universally shared, but they are at least seriously debated in mixed company today...

...For Burke and theFounders, politics is, in a descriptive sense and a moral sense, the traditional way of keeping peace in society, of limiting men's passions, and of balancing competing moral claims...

...On social welfare questions he is persuasive in maintaining that current income maintenance programs keep many people in poverty (he recommends a negative income tax), that rent controls only reduce the quantity and quality of housing available to the poor, and that vouchers for the financing of private and public education would increase discipline, innovation, learning, and parental control in the 16 THE AMERICAN SPECTATOR JUI.Y 1980 schools...

...This classical liberalism has both a political and an economic side...

...in all c a s e s , an evil...

...Most a t t e m p t s to exercise significant political control over the economy have p,-ovcd disastrous, from the heavily centralized Eastern Bloc economies to moderately collectivized Great Britain...

...Agonizing over the c,.mduct of the victims, however, is not only unseemly, it is also unrewarding, for there is little that we can lcarn from such investigations and speculations...

...What is perhaps most modern-and most chilling--about this phenomenon is that the doomed people could do nothing m prevent their fate...

...students or for readers of the New York Review of Books...

...Although on some topics Friedman escaped unscathed (inflation), on others (school finance) he was, in my view, soundly beaten...

...Did these true b('lievers also support all aspccls ofl [itler's ideology, including tile final solution...

...For what they both agree on is that political discourse is, and ought to be, the search for a "rationally constructed" and "just" society which protects primordial rights which the individual brings with him before the society, is "constructed...

...t ought to be introduced as sparingly, its possible...

...This view is virtually indistinguishable from those of Godwin, Herbert Spencer, or J.S...

...The "freedom to choose" of which Friedman speaks is the freedom of individuals to choose anything in the market, from carrots to pension plans to candidates in an election...

...The most interesting and persuasive parts of the book are those which deal with specific policies, and it is interesting to note how much of the Friedman analysis, relatively unchanged since Capitalism and Freedom (1962), has become common wisdom...

...concern about individual f?eedom is really what animates his thought and convinces him of the value of our economic system...

...To deny that the Third Reich has a special meaning for Jews would bc absurd, b-ut it would be a mistake if only .Jews pondered the significance of the Nazis...

...Two things militate against this...

...they were guilty by virtue of their birth rather than their conduct...

...Could anyone but Friedman have put the argument for individual liberty so well...

...Congress can be expected to stop well short of enacting the entire Friedman plan, and we would all be much better off if public policies started moving in his direction...

...Both liberalisms, then, suffer from the same utopianism, rationalism, and philosophical extremism which Edmund Burke called "metaphysical madness...

...Most Jews probably went to their deaths without fully comprehending what was happening to them...

...Even New York Times editorials discuss such things as deregulation, free trade, and the negative income tax...

...In all thrce, the s t a t e d e l i b e r a t e l y tried to e x t c , m i n a t e vase groups of people whose very existence, it was claimed, was not ill tile s t a t e ' s interest...

...This is not an amoral system, but a profoundly moral one since it looks to the political process to reflect and maintain the consent of the governed...

...Most do not seem to face up to the contradiction between these rights, but others do admit that rights must be be balanced (which makes them seem less like rights...

...Ironically, those political and economic thinkers who are being called neoconservatives are much closer to a traditional conservative view of what political economy is about than is "arch-conservative" Friedman...

...The first is that economic freedom is not to be ignored but should be considered one of the moral values which are "computed" by the polity along with property rights, opportunity, equality, stability, and prosperity...

...Milton Friedman's polity (if it may be called that) is composed, both in a descriptive sense and in a moral sense, of free autonomous individuals who unite voluntarily to serve only one end: "the protection of individuals in the society from coercion whether it comes from the outside or from their fellow citizens...

...Free To Choose, and the companion public television series of the same name, must be seen as political tracts on the value of the free market and not as scholarly works on public policy issues...

...He argues that the distribution of income under capitalism may be unequal, but it has made the worst off the best off they could be by generating unprecedented economic growth...

...Milton Friedman has provided a service to conservatives in comparing so-called "market failures" to government failures (what Charles Wolf, J r . , has nicely termed "non-market failures") and the market almost always looks preferable...

...How is it possible to read a book like this and find yourself nodding in agreement at most of what is written, yet afterward feel that the entire enterprise is fundamentally misguided...

...The problem, of course, is that legitimate actions may still be stupid, and the British have again e x e r c i s e d t h e i r freedom in an attempt to get out of the terrible economic state in which they find themselves...

...But Friedman also analyzes what this freedom has produced...

...Although he is not on popular ground in arguing that nonunion workers bear an extremely heavy burden due to union closed shop (he uses doctors as his example), his analysis of the way in which regulatory agencies come to protect the industries they were created to regulate would have pleased Senator Kennedy...

...That of sophisters...

...Like the classical liberal, modern liberals believe in individual rights, and they believe that the proper role of government is to guarantee rights, but they want those rights to include not only freedom but also "positive rights" such as equal opportunity and a "fair share" (whatever that means) of economic wealth...

...We need to understand the way in which Nazism is a modern version of the Stephen Milk.'r is a Resident Fellow al the American Enterprise Institute...

...The classical liberal rejects the notions of social value or public interest, not because these notions are often misused or their value is overestimated, but because they are truly nonsensical in a theory which maintains, again in the words of Godwin, that "society is nothing more than the aggregation of individuals...

...That Friedman can be confused with Godwin and that he is so popular among American conservatives reflects the contradiction...

...Sowell barely refrained from socking her...

...By supporting Labour governments, Britons were not limiting their freedom...

...But the balance between these values cannot be fixed, nor can one be said to be primary...

...Regarding the Third Reich as a phenom(-non deeply disturbing mainly to Jews...

...The second reason is prudence...

...That THE AMERICAN SPECTATOR JULY 1980 17 the two liberalisms disagree completely on the proper size and activities of government only means that they differ over whether "rights" are limited to freedom or extend to opportunity and equality...

...To place irony upon irony, it is Milton Friedman's own work which has made the most important contribution to many of the neoc o n s e r v a t i v e positions on political and economic affairs...

...And what is just is not determined by rational argument (or "decision-making," as it is now called) but by accommodation...

...It is hard to blame fully Friedman and the modern liberals, for they are surely in the mainstream of contemporary-analytic political philosophy...

...There has been no conservative political economic tradition precisely because the desires of "rational individuals" have never been of interest to the conservative political thinker...

...These analyses are not intended to determine whether government action is theoretically legitimate, but to inform the legitimizing process of the political system on which Burke placed the highest moral value...

...The classical liberalJs economic philosophy flows directly from his political philosophy, mainly because he sees no distinction between political man and economic man...

...And the highest morality is almost always the morality of process...

...The denominations to be computed are very often moral, to be sure, but few if any are absolute, few if any imperative...

...Friedman seems to accept all realms of social interaction as legitimate except the political realm, while modern liberals s e e politics as legitimate only to the extent that it enforces social justice...

...age-old problem of anti-Semitism, but we also need to understand the way in which Nazism is a distinctively modern phenomenon...

...The .Jewish victims, we might say, behaved" naturally," whereas the conduct of the Nazis was truly unnatural in the extreme, insofar as it did not accord with the self-inlerest of the Nazi regime...

...Friedman is persistent, but never smug, and by encouraging reasoned argument he demonstrates all those intellectual graces so lacking today on the American Left...

...While the first half of each television show was devoted to amplifying topics discussed in each chapter of the book, in the second half he subjected himself to a minimally edited barrage of arguments from what pass today for heavyweights: Robert Lekachman, Michael Harrington, Frances Fox Piven, Peter Jay, Albert Shanker, and many others...

...The Third Reich has not gone unexplored, yet comparatively few books ask what surely is a compelling question: What made many Germans become a r d e n t Nazis...

...In the introduction to that book, Friedman maintains that he is a 19thcentury (or classical) liberal, a position onl 9 popular among a handful of economists and certain modern "libertarians...

...One only has to look at the most recent major works in the field, John Rawls' A Theory of Justice and Robert Nozick's Anarchy, State and Utopia, to realize that while there is much disagreement over the substance of rights and abstract justice there is general agreement that these are the proper concerns of political philosophy...

...In politics-there can be no strict rules or immutable rights, only temporary rights created and guaranteed within an existing polity...

...they were exercising it in a vain attempt to increase both prosperity and equality at the same time...

...We must resume the politics of Burke's computing principle...

...As examples he cites Taiwan, where there is economic but limited political freedom, and India and Great Britain where, he claims, neither really exists...

...B Stephen Miller ILLUMINATING THE NAZI MIND Where good is as evil does...

...Well, someone else did...

...The liberal polity is a polity without politics, made up of rational, dispassionate creatures willing and able to be persuaded of the structure of the just society...

...Their analyses of public policy tend to focus on the balance between a large number of social values (e.g., efficiency, stability, prosperity, equality, manageability) rather than just on individual freedom...

...For tile policies of the Third Reich have much in common with the policies of other modern regimes--the Soviet regime under Stalin and the Cambodian regime under Pol Pot...

...what is important about the debate is that the participants are in basic agreement about how political discourse should be conducted...

...many w'rilcrs have become preoccupied -indeed obsessed--with, the conduct of the victims themscJves, suggesting that the .Jews could have dop.e more to save themselves...

...Free To Choose is a very good book, but in this period of conservative resurgence it begs us to reconsider Friedman in light of what a truly conservative political economy might look like...