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Milton Friedman was perhaps the most widely celebrated of the University of Chicago's eminent economists, one of the numerous Nobel Prize winners in the school's cadre of creative and penetrating economic thinkers. But Friedman was not just a theorist; he was an activist, a proselytizer. Capitalism and Freedom, a title that expresses an equation basic to free-market economics, is a slim volume, almost a companion to Henry Hazlitt's Economics in One Lesson (Chapter 24). But whereas Hazlitt explores the fundamental relationship between government tax and spending policy on the one hand and Adam Smith's marketplace on the other, Friedman correlates the effect of the same governmental policies on individualism, that is, personal and economic freedom. In the preface he notes that his intention is to expose some of the myths of government intervention-including the failure of avowed collectivist policies to bring us closer to utopia. His purpose is to help us as individuals understand what we can do to protect and promote our personal and economic liberty. Throughout the book his encouragement to activism is patent. Friedman observes that almost invariably it requires a crisis to energize human beings to act. His goal, therefore, is to provide tools to deal with economic crises so when something does happen to motivate us we will be able to address our problems more effectively. Based on an understanding of economics and human nature these tools could best be used, of course, to avoid approaching disaster in the first place, but Friedman recognizes that the human condition often gets in the way of such common sense. Ultimately, Friedman sought to set a foundation so that what appeared politically impossible-freedom from overweening government-would eventually become politically inescapable. For example, when the socialist ideas of the 1930s and 1940s ultimately failed to bear any of the fruit that was promised, the need to return to the free market became palpable. Friedman and his academic cohorts from around the world provided the philosophy and programs necessary and enunciated some "rules" to ensure that the freed economic system could function efficiently. They wanted the system to be understood and embraced on a personal, a national, and an international level so that collectivist impulses did not again become the answer to the vicissitudes of economic activity-whether in a micro- or macro arena. In order to effect their intentions, Friedman and his contemporaries gathered in Switzerland in 1947 and formed the Mont Pelerin Society. Once constituted, this organization and its individual members publicly called to account the fallacies then prevalent in economic thinking. They were successful, to the chagrin of their many critics, beyond almost all expectations, and to them the world owes a great debt-for they allowed rational economic thinking to re-emerge on the global stage. Friedman opens his book by dissecting the results obtained when liberal ideas are put into effect and the reality of everyday living vis-à-vis these ideas puts a face on the law of unintended 218 consequences. He finds that the implementation of the ubiquitous liberal notion of paternalism is almost always demeaning and destructive of self-confidence and self-sufficiency. Friedman asserts the obvious, namely, that we are individuals. Not only are we quite able to take care of ourselves, but we want to. We don't want to be told how or what to do, or be cared for by government in any measure if we can avoid it. The personal sense of shame felt by those who first find themselves in the welfare line is no less prevalent today than it was in the depths of the Depression. However, those inured to government paternalism and who have been told they are entitled to welfare are taught to lose that sense of personal dignity with which we are all endowed at birth. Thus is born, instead, the culture of dependency. This culture can be reversed-not only for the benefit of the taxpayers but for the individuals whose sense of life has been so grievously distorted. Friedman understands the human impulse toward self-sufficiency; he comments that we would not normally allow or expect anyone else, much less everyone else (by means of government oversight and intrusion) to do for us that which we can better do for ourselves. He avers that those who call for a public effort in this vein do far more harm than good. Welfarism simply induces people to postpone deciding when to become responsible for themselves. Friedman's understanding of these matters reflects his view of government as an instrument of people engaged in political action-not as an entity apart from them. Government, which is a continuing personal responsibility for each of us, is our way of arriving at and implementing policy. Conversely, government does not exist either to afford faceless bureaucrats the opportunity to meddle in our affairs or to allow politicians to actualize dreams of how they can better our lives, or assume responsibility for us (and obtain re-election in the bargain by means of their often feckless promises). Central to Friedman's thinking is his largely successful effort to grapple with a simple question: how can we keep government bureaucracy and regulation from destroying the freedom on which America is based? Government can be a threat to freedom because of a combination of centralized power and the indulgent attitudes, efforts, and condescensions of misguided politicians and bureaucrats. Friedman offers two time-tested and effective suggestions to counteract these threats. First, we should limit the government's reach to those things that either should not or cannot be accomplished by the private sector. Second, we should design and implement government policies that directly assist individuals at the level closest to the citizen in order to avoid the inherent arrogance and inefficiencies of a distant centralized bureaucracy. Although the attraction of federal pronouncements is that they can be uniformly applied across the country, Friedman notes that the country (much less the individuals within it) is not uniform and consequently a national system can implode upon local application. During the last quarter of the twentieth century private sector initiatives and government programs specifically tailored to local constituencies and circumstances proved far more effective than any national policies necessarily designed to address needs in a lowest common denominator approach. Wisconsin's revolutionary approach to welfare-welfare to workfare-reduced welfare rolls and brought self-sufficiency and personal dignity to tens of thousands and was copied on the federal level in the 1990s. This is a prime example of entrepreneurial and innovative government efforts that are possible when local entities are given the freedom to address local issues. National pronouncements attempting to resolve local realities produce uniform mediocrity at best-at great administrative cost. 219 On the macroeconomic side of his efforts, Friedman and his partners in the Mont Pelerin Society easily determined where then current (1940s and 50s) government policies were headed. They understood equalitarianism as the intended result of socialism and its latter day cousin, the welfare state. Both are antithetical to freedom. Friedman offers that people are unequal in diverse ways and their differences go far toward sustaining the essence and beauty of humanity-not to mention all human progress. Liberals, who wish to impose an equalitarian outcome, and who ignore these realities, do so at our peril, for their notions go against the human spirit and human experience. The dignity of all work and each life is something that liberals often seem to simply ignore or deny. Their conclusion, based on their false assumptions, is to force conformity and results. They thereby give proof that their fundamental premises are destructive, not just wrong. Friedman posits that economic freedom does one simple thing, namely, it separates political power from economic power so that the two achieve a balance (similar to the balance between the executive, legislative and judicial branches of government). This is a sometimes uneasy equilibrium, but essential nevertheless. If the state (through the legislature and its attendant bureaucracies) subverts that balance and controls economic relations through political power, the state becomes a substitute for the people. In this manner the expression of individuality through free choice is curtailed. During the last half of the twentieth century it became apparent that legislatures and bureaucracies felt a need to express their power; the former to maintain their tenure in office (through the use of both carrot and stick), the latter to exercise the authority conferred by the former and thus to validate their possession of it. This exertion of power by political entities reduces the freedom of the citizen. An economic model based on voluntary and informed transactions is what Friedman calls a free, private-enterprise exchange economy, or competitive capitalism. Friedman notes:
Underlying most arguments against a free market is a lack of belief Recognizing that humans are imperfect, governments mistakenly (and often
brazenly) conclude that economic decisions and actions must be made and
taken on behalf of individuals. This suggests not only that ordinary people
are flawed, an assertion with which few would argue, but also that they are
incompetent (until one looks at what human beings have done).
Further, it suggests that politicians and bureaucrats, who are themselves
ordinary humans until they get elected or hired, are more perfect. They are
those human beings wise enough to run the government; they are the anointed
or the chosen. They and their goals are the subject of George Orwell's 1948
novel and screed against totalitarianism, 1984. Orwell effectively
takes collectivism and totalitarianism to their logical conclusions and puts
a conjectural but not unimaginable patina on Friedman's philosophical
declamations. About the Author Available through: |
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