Looking Backward
LEKACHMAN, ROBERT
Looking Backward CAPITALISM AND FREEDOM By Milton Friedman Chicago. 202 pp. $3.95. Reviewed by ROBERT LEKACHMAN Milton Friedman is one of the able economists at the University of Chicago...
...Will America's corporate giants soon begin to employ Jewish, Puerto Rican, and Negro executives out of careful calculation of how expensive it is to cut themselves off from the services of talented members of these groups...
...Take the matter of government activity...
...Defense outlays, veterans' expenditures, foreign aid, government-supported research, and interest on the Federal debt constitute far more than half the budget and the bulk of Federal employment...
...For that matter, do large corporations hire as rationally as he suggests...
...In his words, " history suggests only that capitalism is a necessary condition for political freedom...
...Friedman's logic is keen...
...Friedman may argue with every accuracy that manufacturing is a declining share of economic activity, that only in manufacturing is monopoly control important, and that even within manufacturing the large enterprise has grown less rapidly than the total economy...
...Another contribution to incredulity is Friedman's restoration of economic man as rational, hedonistic and isolated...
...Professor Friedman is convinced that free markets and free men have accompanied each other through history...
...Among a good deal else, he contemplates elimination of Federal aid to agriculture, unilateral introduction of free trade by the United States, termination of the discretionary monetary powers which the Federal Reserve System now wields, elimination of all occupational licenses-including those of doctors-substitution of privately supported for public schools, application of the antitrust laws to trade unions, and radical amendment of the Social Security system...
...Friedman would have us believe so...
...No coward, Friedman has taken on simultaneously American business, American trade unions, the NAACP, the AMA, American farmers, American bankers and American bureaucrats...
...As MIT'S Francis Bator has demonstrated, non-defense Federal outlays have not become a larger percentage of Gross National Product...
...Do people really choose their occupations according to the Friedman hypothesis...
...If Mill were alive today, one wonders whether he would not find Galbraith more sympathetic than Friedman...
...Nor will General Motors dealerslocated in Friedman's competitive retail sector of the market-be readily persuaded that their dealings with General Motors are those of equals...
...As for the widening of Government function outside of defense, it has been demanded in the main by the existence of large centers of private power...
...Part of the answer is to be found in his ability utterly to ignore the play of political interest, the habits and practices of established institutions, and the complexity of present organizational relationships...
...If the administrative budget is approaching $100 billion, the reasons are not far to seek...
...Among economists, this Chicago School is equally famous for its technical virtuosity and for its unrelenting affection for the central tenets of laissez-faire capitalism in a world of giant unions, corporations, foundations, universities and governments...
...Reviewed by ROBERT LEKACHMAN Milton Friedman is one of the able economists at the University of Chicago who still fly the 19th century banner of David Ricardo, Nassau Senior, Jeremy Bentham, and James and John Stuart Mill...
...His prose is lucid...
...If other groups are not listed, it is because both the book and this review are short...
...He is unlikely, however, to convince employees of General Motors or U.S...
...It rather staggers the imagination to visualize a stage-struck girl opting for the screen test out of a preference for uncertainty...
...In this vigorously written polemic, apparently addressed to a wider public than his professional colleagues, Professor Friedman brilliantly restates the central assumptions of his school and then applies them to a wide variety of economic situations...
...I cannot conclude without a final sad observation: Professor Friedman and his sympathizers do not represent an extension of a viable 19th century liberalism...
...Why is his world so utterly incredible...
...The doctrine, on the contrary, has declined in nobility and realism...
...Arguing that free labor markets result in equality of net advantage for job seekers, Friedman maintains that individuals choose occupations, investments, and the like partly in accordance with their taste for uncertainty...
...He toyed with compulsory public education...
...And he did not trust the sacred market by itself to make the quality of human life tolerable...
...This is suspicious as a generalization, but it is astounding in its author's application: " the girl who tries to become a movie actress rather than a civil servant is deliberately choosing to enter a lottery...
...One illustration exemplifies the attitude...
...The facts of economic power, of the influence of the large corporation on state legislatures, communities in which they are located, and suppliers and dealers, are far more subtle than the statistics of size and concentration are likely to catch...
...Mill favored profit-sharing and cooperative factory ownership...
...John Stuart Mill, Gladstone's "saint of rationalism," envisaged more departures from laissez-faire in 1848 than does Friedman more than a century later...
...It follows that contemporary abridgments of capitalism, which are the consequences of centralized bureaucracies, enlarged notions of the welfare state and misguided concern for the underprivileged, endanger political as well as economic liberty...
...This economist's paradise is so specialized that it has little room for the circumstances of actual political and economic power...
...Steel that free markets assure them rough equality of bargaining power with their formidable employers...
...His tone is civilized...
...He supported confiscatory inheritance taxes as a stimulus to the incentives of heirs...
...Looming above all else has been wars: past, present and future...
...Friedman comes equipped with a program which is designed to replace welfare arrangements with free market devices...
Vol. 45 • December 1962 • No. 25
