Monday, August 09, 2010

Milton Friedman on Donahue

Yesterday I enjoyed watching these two programs, so I thought I'd share them with you, my readers. The first is from 1979, just before Friedman's TV show of Free to Choose was released; the second is from 1980, just after the book form had been published.

Amongst the things I like are Friedman's continued points that he has no interest in protecting any industry, of business in that industry: If they go broke as a result of deregulation, good! And, related to this, are his demonstrations that regulatory bodies, even if set up with good intentions, become run by the industries they are meant to regulate so as to provide such protection, against the interests of the public.

Further to this is Friedman's scuppering his conservative credentials by whole heartedly supporting the decriminalisation, not just of marijuana, but of heroin. I also liked his argument that safety regulation in car manufacturing has made cars less safe, by raising the costs, and so price of cars, meaning people keep hold of old cars longer.

The things I don't like are his intellectual sleight of hand over military spending. Donahue is quite right to say that Friedman should apply his skepticism of big government to the military, too - and Friedman, of course, is one reason why the US no longer has the draft. Friedman employs a trick to argue that military spending has gone down, whilst also showing, but not admitting, the opposite: It has gone down in relative terms; that is, it has fallen as a proportion of government spending, but since government spending across the board has risen, the fact that some bits have risen faster than military spending does not show that military spending has fallen.

The second bit I don't like is his claim that government is a kind of group through which we (US citizens) work together to get done the things we cannot get done on our own. First off, Friedman knows that the alternative to government doing something is not each individual doing things for themselves - he is, after all, a champion of the free enterprise systme, through which people specialise in the tasks in which they have a comparative advantage, in the expectation that others else will be specialising in the things the first want done, and trade the surpluses, usually by means of a medium of exchange. Friedman himself has said that the free enterprise [i]is[/i] a means by which people mutually co-operate to satisfy their respective needs.

Secondly, Friedman seems to be contradicting himself: Since he has a wider notion of "doing things ourselves" than each individual working for himself, but instead includes voluntary trade, and voluntary co-operation in this, it seems odd to suggest that people form governments to do the sorts of things that they cannot do themselves. The reason is that, if this were the case, there would be no need for governments: If people couldn't dop something themselves, but could get together to form an organisation to do so, and would have an incentive to do so, then this is what they would do. Instead of relying on government to do that thing, they would do it themselves, through these organisations. But since a broader, more plausible notion of "doing things ourselves" that Friedman would likely agree with would include these organisations, Friedman would presumably say that "things we cannot do for ourselves" includes things that these organisations couldn't do. But in that case he seems to be characterising governments as being precisely the type of organisations - organisations through which we get together to do the things we cannot do by ourselves - he says we could not form!

Government is not a club that people got together to create so that they could work together and accomplish things they could not do for themselves. Government is not a club or union. This is not how governments we formed - historically, every state, everywhere and always, had its origins in conquest, in one party imposing its rule on a vanquished foe. And it is not how government have proceeded since then: they have always proceeded by one side using government as institutionalised violence to force the other to their will, usually with the intent of exploiting them economically. In fact, related to this is Friedman's annoying faith in democracy - he points out that regulatory bodies are run by and for the industries they regulate, that government is run for the corporations like Chrysler, and he is fully aware that this is because special interests, like those in big business, have more incentive to try to influence government than the general public, and that government has more incentive to resond to their pressure than that of the general public. But he still seems to characterise the government as something in which we all have as much a say as each other, and that we can, ultimately, have control over. On the contrary, it is because government is not like this that we should allow it as little influence in our lives as possible.

The case for such a position, of course, is what Friedman expertly provides in these programs.

Milton Friedman on Phil Donahue, 1979

Milton Friedman on Phil Donahue, 1980


Anonymous Heath said...

Thanks for the great and the videos to. Great analysis I think Friedman was contradicting himself to.

8:50 PM  

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