The Friedman Fetish

i wanted to remark on the passing of milton friedman, that giant of pretty economic theories.

i'm not going to drink the kool-aid and say that friedman was the most influential economist of the 20th century. it's just not true. keynes was more influential. so was galbraith.

but no economist of the 20th century was so fetishized.

think about it. while liberal (not neoliberal) economic theory owes a great deal to keynes and galbraith -- hell, maybe it owes everything to them -- liberals have not, for the most part, held either one up to be a god-like figure. when i went in search of my first keynes text, i had to have barnes and noble order it for me. they didn't stock it in the store. sure, there were one or two works by galbraith there, but friedman had his own shelf!

now, obviously there are those who believe that there is good reason for friedman's continued popularity (hi brother!): simply put, he's right about economics. free markets deliver the most wealth to the greatest number of people than any other kind of economic system. so why not lionize him?

simply put, he's wrong about economics. oh, don't get me wrong, his theories are pretty. they make sense. they're easily provable and it's just so darn nice to think of humans as logical, rational actors who want nothing more than to maximize efficiency and utility with every single thing they do.

there's problem with these models, though. they're not realistic. like pure marxist theory, pure free-market economic theory can never work -- at least not in the way we're told it can work. just as marxists, when they insist that by eliminating private ownership and turning control of the market over to the government, are discounting human nature and what it means to be truly free, so freemarketeers, when they insist that government intervention in the markets -- if only to keep them from congealing in a monopolistic mass -- fail to grasp the complexities of human nature.

as chris hayes points out in this piece about economics 101 at the u of chicago, while friedman's ideas about the market and fun, logical if unchallenging, and tidy, they only describe things as they exist in theory. the reality of economic markets can be better understand by considering the lessons of political economy. one doesn't have to read liberal political economists like galbraith, stiglitz, delong, krugman, sen, or others to have a deeper understanding of market economics, either. read conservatives like desoto. read adam smith, for god sakes, who, though he made much of the "invisible hand of the market," still wrote that the government should, from time to time, make sure that the market does not congeal upward to create giant monopolies and quash competitiveness.

what real free-traders believe -- or should believe, in my opinion -- is that, in general, free trade and free markets are extensions of free thought. jefferson said as much when he claimed that from free men comes free trade. but, interestingly enough, jefferson went further and stated that free trade will not be enough to generate freedom of thought. he stated that before you can have free trade and free markets you have to have a governmental infrastructure that will support political and social freedom. then trade can be free.

i agree and i think this is what the friedman lovers miss. free trade hasn't worked -- and probably gets a bad rap -- from many placed around the world because there isn't political freedom to protect the people at the bottom from getting crushed. free markets naturally drift toward congealment, anticompetitiveness, and oligopolies. so, government intervention -- guidance, more like -- is necessary to mitigate these things.

i don't advocate complete government management of markets. not at all. i'm pro free trade. but only in so far as it respects the human rights of everyone involved, and is done in the spirit of fairness. i think there's nothing wrong with getting rich. not in the least. but there is something wrong with getting rich at the complete expense of those on the bottom of the economic ladder. if we agree as a society that free markets are best, we're must acknowledge that free markets, if left completely untouched, will erode public infrastructure, will impoverish and kill millions of people, and will result in drastically stark class division.

it's the difference between paper economics and realpolitik. friedman was brilliant, i agree. his ideas are attractive, sure. but they only exist in ether.

friedman would rest comfortably next to marx.