Thursday, November 16, 2006

The end of an era, [Please bury it. It has begun to stink!]

Milton Friedman died today. George Bush lands in Viet Nam to participate in APEC tomorrow. The APEC summit being held in Hanoi marks a great milestone and a kind of "coming out party" for Viet Nam's emergence from miserable victim of war and its own centrally planned economy into a bustling economy with enough of the trappings of a free market to enable its membership in the WTO. Not that Viet Nam is quite the equal of, say, the Netherlands in matters of human rights just yet. But then neither is President Bush's country or President Hu's country for that matter. Human rights and the purely economic freedoms Milton espoused don't show up in the same place at the same time on history's stage...just and observation. Professor Friedman was big on observation.

Prof. Friedman was a thorough champion of economic [and probably most other ] freedoms from government, beloved of Grover Norquist and the libertarians at the Cato Institute. And, as pointed out in the NPR coverage [click the "listen" for audio] of Mr. Friedman's passing, he had many critics who thought he took a good idea way too far: the claim is that Mr. Friedman thought an unfettered market, operated by businesses or individuals free of burdens of regulation, could do no wrong. I will have to read one of his books to see if I think that is what he meant. But for now, knowing the folks at the Cato Institute are selfish but not stupid, I'll presume he favored nearly unregulated everything and was a grand daddy of the current blind faith neocons have in market solutions for everything.

Similar to the neocons [except they are still breathing] Mr Friedman is no longer in this world and as he leaves us, he was still thinking his ideas have triumphed. In a 1999 NPR interview he was asked what 20th century event would leave the most lasting effects and he said it was the collapse of communism:
"...Because it marked the philosophical supremacy of the idea of free markets and private enterprise over the idea of collective central planning. ...
Its a good interview and short, read it to see what the man thought. He was not a bad guy. He was privately saying "who cares" about drug use in the years when Reagan's catch phrase was "just say no" [I'd aver that Reagan introduced republican rudeness in that should have been "just say no, thank you"]. Friedman helped dismantle the draft and urged economic incentives for recruiting: a mercenary army. The lack of a draft does have a long reach: it was Bush/Cheney's one inkling of "reality based" thought that they could never sell a war on Iraq with Shinseki's and Colin Powell's notion of troop numbers because reinstituting a draft would never fly. So they lied about the cost of the war in money and troops and that problem is very much with us today. But Milton's ideas are easily misused too. He provided strong excuses to people making favor-the-rich economic policy in spite of his own earnest vision that freedom favors even the small players with opportunity. Although I admire empiricism, which Friedman genuinely appears to have stuck too, it lacks the heart and intuition that good government must have.
"Human life requires the balancing of freedom with other goals, including security and equality," said Richard Parker, a senior fellow at Harvard's Kennedy School of Government. "Friedman's repeated neglect of these other values has been the repeated source of error in his policy advice."
If you are going to form world-shaping policies and ideas from evidence, you must take in much more evidence than even the vast studies of Mr. Friedman. He only studied people in their immediate economic settings: money. His empirical bent enables him to sound so wise when the replies to this interviewer:
STAMBERG: Professor Friedman, let's talk some, though, about the human cost of the free market, because we all know that everything free comes with a price, and very often the price has been tremendous hardships and insecurities. I wonder what it would take to make the free-market system work and not take too heavy a toll on the extremely poor, the people at the very bottom rungs?

FRIEDMAN: Well, I can't agree with the assertions you're making. You have to compare one system with another. There's no point in comparing an actual, operating system with an ideal system that doesn't exist. I would say that, in contrary to your generalization, the free market has involved less hardship, has imposed far less of a cost than almost any alternative system. Can you compare any of the costs of the free market with the costs that were imposed by, let's say, either the Soviet Union or China?

STAMBERG: You know, lots of people are lucky to get their wisdom by sitting in your classroom over the years and reading your books. Others of us get our wisdom by talking to taxi drivers. Now this goes back to the Russian model again, and I'm sure you'll incorporate that in your answer. But I don't know how many Russian cabbies in New York have told me -- in the course of a really bumpy, pothole-filled ride -- how dreadfully tough their lives are here, having made that transition from a government which took care -- yes, in very brutal, cruel ways -- but took care of most of their human needs, and try to fight it out on the streets of the major city of capitalism.

FRIEDMAN: And why did they come there?

STAMBERG: Gold in the streets, was it?

FRIEDMAN: Yeah. Why didn't they stay in the Soviet Union?

STAMBERG: Of course, they saw more opportunities. That's true, Professor, but in terms of...

FRIEDMAN: Do they regret having come?

STAMBERG: Well, I think they did. I'm not saying...

FRIEDMAN: Don't you think that the most meaningful vote is a vote with your feet?

STAMBERG: So you're saying pack up and go back if it's so tough for you here?

FRIEDMAN: Well, how many have done so?... Don't misunderstand me. I'm saying if you really want to know what they really believe about the relative merits of the two systems, see what they do, not what they say. And what they do is to stay here. They don't go back. I think of my own family. My parents came here from Europe at the age of 14 and 16. And they had a hard time, a very difficult time, but it opened up a world of opportunity for them. And the same thing with these cab drivers whom you're talking about who are bitching about it. Look at what they do, not what they say.
And in the NPR coverage this evening, for which the transcript is not yet on line, Friedman is quoted to the effect that it was the untrammeled freedoms of our free enterprise system that allowed the US to provide so much opportunity to immigrants like his parents and produced that rapid growth of the American economy. I wish I could ask the man if he thought this freedom was meant to include freedom from responsibility for the future. The hidden factor, unvarying until the late 20th century, that invisibly shored up all economic prediction was that nature appeared inexhaustible and human activity had no impact on earth's capacity to warm and feed us. Those days are gone and classical liberalism must be buried with them.

Like I said before: A market is a crowd that has forgiven itself in advance for its avarice, saying greed is the norm. Mr. Friedman came up with his theories based as much as possible on the evidence he found. But he collected all his data in a field where human nature, that sad and sorry oxymoron, was the only "natural" force. The fuller context, the thoughtlessly exploited substrate of all life, our earth, was not a factor in Mr Friedman's calculations. Since a free market presumes all economic actors are indeed free to act it is presumed fair...but the future, our heirs, are not free to act. They are altogether absent unless our consciences or regulations of the market that would be to the advantage of no present player are enforced. [It occurs to me nature actually does get one rather sick sort of consideration: "depletion allowance" tax breaks for mineral resource exploiters]

No parliament however inclusive of the day's political stake holders, no number of bomb laden planes, not even profit itself will sustain a "freedom" that in the long run is just another word for the selfishness of an economics that believes the interests of those present are all that count.

Note: The Chicago Tribune has one of the most detailed of the glowing retrospectives of this economist's extremely influential life, fitting in light of Milton's 30 year tenure at U of Chicago. Richard Adams at Guardian Unlimited points out that for all the effusive eulogies, it was a successor, Paul Samuelson, who gave advice to government that stayed in effect longer than most of Professor Friedman's directions.
Of Prof. Friedman's very many quotes, one that I think captures the essence of his errors is this:
“Freedom is the major objective in relations among individuals,” Dr. Friedman wrote in a 1968 essay collection, “Dollars and Deficits,” and “the preservation of freedom requires limiting narrowly the role of government and placing primary reliance on private property, free markets, and voluntary arrangements.”

Because the word "freedom" has become a mantra rinsed clean of the awareness that fairness is a co-equal objective in human interactions without which most freedoms are soon ground away.

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