Tuesday, July 31, 2012
Milton Friedman and the economy of spoons
By: John Hayward
7/31/2012 02:53 PM
Today marks the 100th birthday of Milton Friedman, one of America’s greatest students of liberty. He was a professional economist, who came to understand that the most advanced form of economics measures the creative power of freedom.
The past hundred years has truly been Friedman’s century. His arguments were proven decisively victorious over Keynesian theories, although of course the die-hard pseudo-Keynesians remain in love with their “scientific” justifications for unlimited government spending. Hopefully it won’t take another hundred years for Friedman’s victory to be properly and universally recognized. There is, quite literally, not enough money in the world to fund another hundred years of experiments to prove him right.
Friedman’s landmark Free to Choose remains one of the best explorations of the unbreakable link between liberty and prosperity. It takes a lot of academic waterboarding to cleanse statists of the common sense require to understand this. Choice is wealth. It is the difference between scrip and money, self-determination and indenture, entrepreneurial growth and socialist decline. It is the difference between a ten-dollar discount coupon and a $10 bill. How can anyone be “free” if they do not own the fruits of their labor? How could penalties and mandates ever produce as much growth as incentives and competition?
The hour grows dark when we hear no more of “please” and “maybe” from the free market, and instead the air is filled with “you must” and “you cannot.” Our votes become signatures upon contracts that can never be broken, binding upon generations to come, with no refunds allowed for poor service.
Friedman is among the finest teachers for learning that everything government does is a form of compulsion. The acolytes of Big Government are always desperate to claim otherwise – they just want to give you stuff! They want to secure your “rights” to “access” goods and services they have deemed vital. They’re just looking to collect a “fair share” from those who would otherwise steal public resources and abuse them to create obscene profits. The public language of statism is always about giving, providing, and ensuring. Pains are taken to hide the taking and destroying.
Not all official use of compulsive force is unwise, or morally illegitimate, but the exercises of force that our Founding Fathers recognized as just and proper – to impartially secure the universal rights of all citizens – have become an increasingly minor line item on the balance sheet of modern government. It is now common practice for government to justify the exercise compulsive power on the premise of its superior wisdom and morality, rather than the strict performance of its essential duties. Politicians seize control of industries because they believe they are more intelligent, and more righteous, than private owners. Our wealth is redistributed by force, because we are presumptively less capable of appreciating “fairness” than our ruling class.
Milton Friedman came to understand that this attitude is both immoral and inefficient. He knew that collective will could never calculate value as shrewdly as millions of individual minds. He cast doubt upon the automatic assumption of selfless benevolence for government planners. He saw the formidable, corrupting power that lurked in giving some men the power to judge the ambitions of others unworthy. Trillions of dollars have been wasted because he was not heeded. The economic strength of an entire generation has been bled away.
It’s not as simple as saying government power is always wrong. There are duties we must entrust to our elected officials. A functioning government cannot rely upon an honor system for funding, in which each citizen voluntarily pays whatever taxes he believes he might owe. We should require fiscal responsibility from every government agency, but we cannot withdraw from the business of enforcing the law, coping with disasters, or defending the United States because those endeavors cannot be run at a profit. But we’ve come so very far from the notion of a government that does only what it must do, leaving the maximum amount of freedom available to nourish the lawful ambitions of the people.
What we confront in America, on the eve of the 2012 election, is a crisis of confidence. Businesses are afraid to expand. Employers are nervous about hiring. Investors are reluctant to take risks. Friedman saw this coming fifty years ago: “Underlying most arguments against the free market is a lack of belief in freedom itself.” When that belief is eroded, the result is not security, but poverty. And what good is compassion, without the strength to realize it as charity?
When he was told by government officials that it was better to dig ditches with shovels than bulldozers, because more jobs were created that way, Friedman asked, “Why not use spoons?” In no corner of the Earth, from alabaster Washington to the filthiest dungeon state, have central planners ever been able to answer that question. If Friedman had lived long enough to hear Barack Obama blame high unemployment on automated teller machines, he would have recognized a student in dire need of his teachings.
As the rest of us watch the edifice of statist economics crumble, and prepare to rescue our nation from its tumbling wreckage, we could do worse than “Why not use spoons?” as our battle cry.
To read another article by John Hayward, click here.
Posted by Brett at 3:11 PM