I picked up a copy of “Free to Choose” just this last week, and I was struck by the simple eloquence with which Milton Friedman articulates his views on government, freedom and the free markets. In keeping with thinkers like Adam Smith, Thomas Jefferson, and John Stuart Mill, Friedman believed that it is only in a free market, where the government plays an “umpire” role instead of a participant or “parental” role, that individuals can obtain the highest degree of freedom.
Adam Smith’s key insight was that both parties to an exchange can benefit and that, so long as cooperation is strictly voluntary, no exchange will take place unless both parties do benefit. No external force, no coercion, no violation of freedom is necessary to produce cooperation among individuals all of whom can benefit.
And of course, that is the thrust of Smith’s Wealth of Nations. When combined with the political ideas embodied in documents such as the Virginia Declaration of Rights (1776) and the United States Bill of Rights (1791), the combination of economic and political freedom produced a “golden age,” as Friedman calls it, in both Great Britain and the United States, during the nineteenth century.
Government during the 19th century, then, could do very little to harm the common man. On the other hand, and this became a sore point for progressives at the time, it could do very little to help, either. By the beginning of the 20th century that began to change, though, and when government failed in one area in which it has had responsibility since the beginning of the republic, that of money, the resulting Depression allowed intellectuals to persuade the public to shift their ideas about the role of government. That’s right: the Depression was not a failure of the free market, but a failure of government in one of its key roles, money (among other things). The result was a paradigmatic shift in the American public. Progressives in recent years have been known to say “Never let a good crisis go to waste,” and they were no different in the early decades of the 20th century.
Emphasis on the responsibility of the individual for his own fate was replaced by emphasis on the individual as a pawn buffeted by forces beyond his control. The view that government’s role is to serve as an umpire to prevent individuals from coercing one another was replaced by the view that government’s role is to serve as a parent charged with the duty of coercing some to aid others.
You know the cliche: “father knows best.” It is apt, and it is the view of government that has dominated over the last three quarters of a century. “What have you done for me lately” has become the cry of every voter in the land. One cannot help but hear the echo of the old Roman promise to the plebes of “bread and circuses” in the responses offered by America politicians.
When individual reliance and voluntary cooperation in the market permitted, not enforced, economic growth accelerates. It is , as James Carville famously reminded America, “all about the economy, stupid.” Make the economy roar, provide individuals with the right to cooperate voluntarily, and the other problems will begin to solve themselves.
- “Milton Friedman and the Fed” and related posts (everydayecon.wordpress.com)
- Must See TV: Milton Friedman in Defense of Capitalism | RedState (jamespatrick1.wordpress.com)
- 20 Most Influential Living Economists (superscholar.org)
- What Would Milton Friedman Do Now? (online.wsj.com)
- Don’t touch my junk! (hollyonthehill.wordpress.com)