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The Illusion of a "Neat-and-Tidy" World It's Not the Spending, Stupid

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Milton Friedman, American Hero

by Christopher Chantrill
November 19, 2006 at 11:12 pm

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IN THE 1960S and 1970s the United States conducted a spirited argument about the bridge to the economic future. Should Americans continue to implement the New Deal with its cocktail of economic planning and elite political control, or should it return to the pre-Depression policy where the the political and the economic forces competed in rough equality?

Three Americans symbolized this contest, with John Kenneth Galbraith arguing for planning and control and Paul Samuelson for a steady-as-she-goes Keynesianism. The greatest and the most conservative of the three, Milton Friedman, died November 16, aged 94.

It is a tribute to his courage and indomitable will that Friedman persevered and won his personal battle of ideas. For in his heyday—as in ours—a conservative polemicist labored under the disadvantage that he was perceived and reported as a little too extreme, a little too dogmatic, and a little too uncultured to be trusted in polite society.

This was perfectly communicated by the producers of his 1980 PBS TV series Free to Choose. The show was aired to provide equal time for Friedman against John Kenneth Galbraith and his BBC series Age of Uncertainty. Against the urbane Galbraith Friedman came across as decidedly prickly.

If Friedman had been a liberal we could have celebrated his abrasiveness as a natural response to the experience of his working-class Jewish origins and the anti-Semitism he encountered as a Jew pushing into the Jewish-quota academy of the 1930s. But such allowances are not made for conservatives. Friedman had to make his way by being right.

It was not until after World War II (in which he famously helped to implement income tax withholding) that he got his academic career on track and built a reputation at the University of Chicago by developing a modern formulation of the quantity theory of money, “monetarism,” against the fashionable Keynesianism preferred at the Massachusetts Institute of Technology. In his Monetary History of the United States, written with Anna Schwartz, he proposed that the Great Depression was caused by the deflationary monetary policy of the Federal Reserve Board between 1929 and 1933.

In his Capitalism and Freedom in 1962 he championed school vouchers and a negative income tax. Today the negative income tax lives as the Democrats’ favorite social program: the Earned Income Tax Credit.

But Friedman’s modest proposal for school vouchers, the idea that government money for education should go to the parents not the school, has provoked such opposition from the education producer interest, the Democrats’ public schoolteacher paymasters, that nothing less than total implosion of the government school monopoly may permit the solution of the central injustice of government education, the utter failure of schools for poor children in inner cities. Nevertheless, Friedman and his wife founded in 1996 the Milton and Rose D. Friedman Foundation to work for school reform.

In comparing Friedman against his rival economist intellectuals John Kenneth Galbraith and Paul Samuelson one is struck by the poverty of the opposition. Extravagantly lionized in his prime, Galbraith seems today more an entertainer on the liberal improv circuit than a thinker, a man who served up crowd-pleasing one-liners to a generation of liberal readers while successfully representing himself as an iconoclast that challenged “conventional wisdom.” Galbreaith’s theory of “countervailing power” between Big Business and Big Labor in American Capitalism in 1952 proved to be empty rubbish. In fact the reign of Big Business and Big Labor in the early post World War II era, condoned by Big Government, amounted to a conspiracy to loot America’s great manufacturing corporations. His Affluent Society advanced the preposterous notion that a government already grown to imperial grandeur in the 1950s suffered from underfunding in a nation of “private affluence” and “public squalor.”

Friedman’s other rival Paul Samuelson was one of the leading developers of mathematical economics in the 1940s, and built a lifelong franchise with his Economics, an introductory college economic text that owed its success through its many editions to a keen sensitivity to the ever changing liberal zeitgeist.

It was not Friedman’s way to pander or to placate liberal opinion. Instead his tireless advocacy plowed a political space in which the economic reforms of the 1980s could take root. To test that notion we can ask the question: Could President Reagan have won the battle to transform the US economy without Friedman’s polemics? The answer is clear. The triumph of Reaganism is unthinkable without Friedman’s contribution.

There is one black mark against Milton Friedman. In the 1970s he gave some lectures on monetary economic policy in Chile. Then he actually met with dictator August Pinochet. For this he was excoriated in the usual places. But the result of his speeches in Chile was that the Pinochet regime implemented a series of landmark economic policies including school vouchers, free trade, and social security privatization that has made Chile the envy of Latin America (See the way that lefties dispute this). Curiously, Friedman’s speeches on economics in socialist countries like China did not provoke similar outrage.

America has need of men like Milton Friedman. Let us pray that in the challenges of the twenty-first century we shall not lack for successors.

Christopher Chantrill blogs at www.roadtothemiddleclass.com.

Buy his Road to the Middle Class.

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Chappies

“But I saw a man yesterday who knows a fellow who had it from a chappie that said that Urquhart had been dipping himself a bit recklessly off the deep end.”  —Freddy Arbuthnot
Dorothy L. Sayers, Strong Poison


Civil Society

“Civil Society”—a complex welter of intermediate institutions, including businesses, voluntary associations, educational institutions, clubs, unions, media, charities, and churches—builds, in turn, on the family, the primary instrument by which people are socialized into their culture and given the skills that allow them to live in broader society and through which the values and knowledge of that society are transmitted across the generations.
Francis Fukuyama, Trust


Hugo on Genius

“Tear down theory, poetic systems... No more rules, no more models... Genius conjures up rather than learns... ” —Victor Hugo
César Graña, Bohemian versus Bourgeois


Education

“We have met with families in which for weeks together, not an article of sustenance but potatoes had been used; yet for every child the hard-earned sum was provided to send them to school.”
E. G. West, Education and the State


Faith & Purpose

“When we began first to preach these things, the people appeared as awakened from the sleep of ages—they seemed to see for the first time that they were responsible beings, and that a refusal to use the means appointed was a damning sin.”
Finke, Stark, The Churching of America, 1776-1990


Conversion

“When we received Christ,” Phil added, “all of a sudden we now had a rule book to go by, and when we had problems the preacher was right there to give us the answers.”
James M. Ault, Jr., Spirit and Flesh


Postmodernism

A writer who says that there are no truths, or that all truth is ’merely relative’, is asking you not to believe him. So don’t.
Roger Scruton, Modern Philosophy


Faith and Politics

As far as the Catholic Church is concerned, the principal focus of her interventions in the public arena is the protection and promotion of the dignity of the person, and she is thereby consciously drawing particular attention to principles which are not negotiable... [1.] protection of life in all its stages, from the first moment of conception until natural death; [2.] recognition and promotion of the natural structure of the family... [3.] the protection of the right of parents to educate their children.
Pope Benedict XVI, Speech to European Peoples Party, 2006


China and Christianity

At first, we thought [the power of the West] was because you had more powerful guns than we had. Then we thought it was because you had the best political system. Next we focused on your economic system. But in the past twenty years, we have realized that the heart of your culture is your religion: Christianity.
David Aikman, Jesus in Beijing


Religion, Property, and Family

But the only religions that have survived are those which support property and the family. Thus the outlook for communism, which is both anti-property and anti-family, (and also anti-religion), is not promising.
F.A. Hayek, The Fatal Conceit


Conservatism

Conservatism is the philosophy of society. Its ethic is fraternity and its characteristic is authority — the non-coercive social persuasion which operates in a family or a community. It says ‘we should...’.
Danny Kruger, On Fraternity


US Life in 1842

Families helped each other putting up homes and barns. Together, they built churches, schools, and common civic buildings. They collaborated to build roads and bridges. They took pride in being free persons, independent, and self-reliant; but the texture of their lives was cooperative and fraternal.
Michael Novak, The Spirit of Democratic Capitalism


presented by Christopher Chantrill

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