Bell Curve The Law Talking Guy Raised by Republicans U.S. West
Well, he's kind of had it in for me ever since I accidentally ran over his dog. Actually, replace "accidentally" with "repeatedly," and replace "dog" with "son."

Thursday, November 16, 2006

Milton Friedman (1912-2006)

Milton Friedman died this morning. Though a towering figure in the field of economics, Friedman was probably not, "the most influential economist of the 20th century," as NPR described him (Keynes might have had something to say about that...) nor did he win the Nobel Peace Prize, as NPR also mistakenly reported. (The Nobel prize Friedman won was, of course, for Economics.)

Friedman was, however, the most renowned and eloquent exponent of the libertarian view of economics of his time. He wrote for Newsweek and PBS. He served as an economic advisor to President Reagan. He argued against anything he considered government interference in the marketplace. He held that the Keynesian notion of counter-cyclical spending was dangerous nonsense. He believed the Federal Reserve had exacerbated (if not caused) the Great Depression by attempting to meddle with the money supply. He famously advocated replacing the Delphic Federal Reserve Board with a computer that would set interest rates by a transparent, predictable algorithm. He advocated the flat tax and the negative income tax as the only acceptable forms of social engineering. Above all, Friedman argued always that what he considered to be economic "freedom" was the surest path to political freedom.

When I was a senior at Cal, I took a course on public sector economics and our professor strongly encouraged us to read Friedman's book, Capitalism and Freedom. She wanted us to read it not for enlightenment, but because, "It is important to understand the enemy." I imagine Friedman would have been honored to hear himself described that way. For though she disputed nearly every sentence he wrote, my professor grudgingly admired Friedman for his intellectual honesty... a sadly scarce quality in right-wing academics these days.

For his many brilliant contributions to economics, and most of all for the sincerity with which he approached his work, I mourn Friedman's passing.

4 comments:

Anonymous said...

Through his obvious influence on the American conservatism and the Republican party, Friedman may have had even more impact as a policy maker than as an economist. His economic ideas/ideology largely built on those of an Austrian economist, Fredrich von Hayek, who preceded Friedman slightly. But Friedman had direct influence on both Reagan and Thatcher (Thatcher was clever enough to recognize von Hayek himself too). So his passing is an important event to note.

That said, I tend to agree with Dr. S. about John Maynard Keynes. Keynes had an enormous impact on the world that is still felt today. In addition to providing the theoretical underpinnings of the modern welfare state (which Friedman's followers have been unable to dismantle completely in any country), Keynes' ideas were the foundation of the Breton Woods system of international economic institutions. The three most important international economic institutions in the world today are the IMF, the World Bank and the GATT/WTO. All three emerged out of the Breton Woods system and are the "brain children" of Keynes.  

// posted by RBR

Anonymous said...

I wonder if modern Economics departments are capable of nurturing a mind that is so very big-picture as Friedman was. I get the impression that an overemphasis on technical skill and unwillingness to study history (how many economists have actually read Keynes, Marx, Schumpeter, Hayek, Malthus, or others before their time?) is producing a generation of technically brilliant but intellectually juvenile economists.  

// posted by LTG

Anonymous said...

I recently got in an argument with an economist who had not even read about the standard theories of international trade (Ricardo or Heckscher and Olin). He was too specialized.

He actually argued that the reason developing countries experience brain drain was because of their high marginal income tax rates. Right. So college graduates move from Pakistan to Canada to avoid income taxes!? Assuming Pakistan actually collects taxes effectively (a BIG assumption), I doubt their marginal tax rate is higher than Canada's. 

// posted by RBR

Anonymous said...

I thought the reason for brain drain was higher income potential in the first world. Earn $20K as engineer in India or $80K in the USA - something like that. Thank you, immigrate again. 

// posted by LTG