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July 23, 2012

Centennial of a Free Mind Fighting for Free Markets

By

Even if you’ve never heard of Milton Friedman, you’ve likely heard some of the famed economist’s pithy sayings.

“Nothing is so permanent as a temporary government program.” “If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.” “Only government can take perfectly good paper, cover it with perfectly good ink, and make the combination worthless.” And a classic he popularized: “There’s no such thing as a free lunch.”

Friedman, who would have been 100 years old on July 31, was for free markets before free markets were cool.

At a time when it was fashionable to assert that collectivism was the wave of the future, he championed the moral and practical superiority of free markets. At a time when “economic” freedom was ranked below “political” freedom, he showed that they are inseparable. And when others looked to government to accomplish their social objectives, he reshaped American politics through his advocacy of monetary restraint, deregulation, the volunteer army, school choice and the flat tax.

Friedman’s defining attitude was an infectious confidence. A student skit from his alma mater, the University of Chicago, in the 1950s included the line: “Mr. Friedman, is it correct that you have discovered Truth, and that you are now simply verifying it empirically?”

Once, when hiring an administrative assistant who lacked an economics background, Friedman reassured her: “You don’t have to worry about not knowing anything about economics. There are many people who studied economics for years and don’t know anything about economics. Stick with me, and you’ll learn the correct way.”

Friedman’s parents emigrated from a province of the Austro-Hungarian Empire in the late 19th century. As a child, he showed a talent for mathematics, graduating from high school before his 16th birthday and dreaming of becoming an actuary for an insurance company. But at Rutgers College, Friedman fell in love with economics. Graduating in 1932, at the darkest moment of the Great Depression, he was offered a scholarship to the University of Chicago.

His work on monetary policy soon became legendary and led to the founding of the Mont Pelerin Society, among other accomplishments. “People at MIT and Harvard didn’t know what they were going to work on until Milton made a speech,” said a fellow University of Chicago Nobel laureate, the now-deceased George Stigler. His influence transformed an academic department into a movement, the “Chicago School,” of which Friedman was the spiritual leader.

Friedman remained a maverick, unafraid to criticize slipshod economic thinking, whatever its source. When President Nixon imposed wage and price controls in 1971, Friedman wrote in the New York Times: “The controls are deeply and inherently immoral. By substituting the rule of men for the rule of law and for voluntary cooperation in the marketplace, the controls threaten the very foundations of a free society.”

He thoroughly discredited the idea, common since the Great Depression, that capitalism is inherently flawed and requires the “fine-tuning” of government to avoid excess and disaster. This has been the central conceit of the Keynesian state, administered by educated sophists, adjusting tax-and-spend policies to tame the business cycle. Friedman attacked these beliefs at their root. He argued that the Great Depression was not caused by the “defects” of capitalism, but by government incompetence.

Economic and social freedom, Friedman reminded us, is not a state of nature. It’s also not a state of grace. It creates the space where souls can make their own choices, informed by bishops and rabbis, poets and philosophers. “The central and supreme object of liberty,” said Lord Acton, “is the reign of conscience.” In the end, they are inseparable.

Friedman’s solutions may have been an antidote to 20th-century problems, but they’re just as relevant — and needed — today as when he first wrote about them. On this centennial of his birth, let us toast his irreplaceable contributions to the cause of freedom by rededicating ourselves to his ideals.

Ed Feulner is president of the Heritage Foundation (heritage.org).

First appeared in The Washington Times

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