A year without Milton Friedman

It's not too early to gauge his impact on humanity.

By
November 21, 2007 20:59
4 minute read.

 
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'Only if a thinker's work is still relevant several decades after its completion," Nobel laureate Milton Friedman once remarked, "can it be said that his work has been really significant." By this measure it is, of course, too early to gauge Friedman's legacy. He died just last November 16. Fortunately, there are other criteria by which we can already measure the extent of his influence. By these measures, Milton Friedman - in the words of his friend former US secretary of state George Schultz - had the greatest beneficial impact on humanity as a whole than any other person, including political leaders and intellectuals. Friedman's educational endeavors, in which his wife, Rose, herself a distinguished economist was full partner, and the economic policies he developed, made the reforms of Britain's Margaret Thatcher (continued by Tony Blair), president Ronald Reagan (continued by Bill Clinton), and (partially, at least) of many other world leaders possible. These ideas were the driving force behind the amazing spurt of economic growth in the last decades. Economic growth has not only raised the standard of living in developed countries to unbelievable heights and lessened dangerous social and national conflicts. (European peace was finally established after centuries of bloody conflict not by a "peace process" but by economic cooperation and betterment.) Growth has also dramatically changed for the better the lives of billions of desperately poor people all over the globe, and in developing economies such as Ireland's, India's and China's. True, by Western standards all this took centuries to achieve; many Chinese, Indians and others are still dismally poor. Opponents of the market economy constantly remind us that economic development is not equally spread - how could it be? What they neglect to appreciate, from their full-bellied position, is that for the poor of the world the advance from starvation, and the realistic hope for continued progress, is indeed a great miracle, even if they do not immediately attain the hard-won standards of developed countries. Even a little progress beats hunger and hopelessness, and the situation will get better. WITHOUT Friedman's courageous battles to free markets from government-imposed disabling restraints, distortions and waste, without his innovative thinking about exchange rates and his tireless and effective advocacy of free internal and international trade, the dramatic increases in productivity, trade and economic growth that enabled humanity to make such great gains would not have materialized. Without the economic strength induced by Friedman's teachings, the United States could not have commanded the resources to launch its successful Star Wars missile defense program that contributed greatly to the economic disintegration of the Soviet Empire and to the freeing of its long suffering millions of slaves. What greater achievements could a man - whose only weapon was his wisdom, moral courage and tireless dedication - hope to achieve? In Israel, Friedman's ideas met perhaps the stiffest resistance, even among economists, whose economic lore was shaped by Prof. Don Patinkin, a Keynsian who believed in the government's ability to fine tune the economy. Patinkin did not foresee the forbidding costs such government intervention was bound to exact - years of near-economic stagnation. More recently, despite the spectacular growth achieved by the Israeli economy in the past five years thanks to Friedman-inspired reforms undertaken by finance minister Binyamin Netanyahu, Israelis are still not quite convinced that a free market economy is a matter of survival for Israel. It is, in fact, our best chance of keeping talented young Israelis in Israel and of paying for the country's growing defense needs. AFTER ALMOST 70 years of a socialist and then a statist economy, and the continued domination of the educational system, especially the universities by the various mutations of socialism, neo-Marxism and post-modernism, our university educated elites have developed a self-defeating animosity toward capitalism and the market economy. They consider capitalism rapacious, exploitative and unjust to such a degree that some are ready to forgo economic growth lest it increase a putative inequality and a growing income gap. It's been galling to these types that Friedman could transcend "absolute forces" and make a historic difference in human development. And he did so without attempting to ruin the existing order and fomenting bloody revolutions (even as their hero Che Guevara has mostly left his mark on T-shirts worn as protest by surly adolescents). It is just plain hard for collectivists - of all types - to trust people, to rely on their potential for good when given freedom to choose and to act. It is for his deep belief in humanity's potential and in the benefits of freedom that collectivists so hated Friedman and tried to defame him. But it was precisely this faith of Friedman in people and their ability to make wise choices when given freedom that he became such a harbinger of good things, now and to come. The writer is director of The Israel Center for Social and Economic Progress. www.icsep.org.il

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