Economist Milton Friedman R.I.P.

[amicus]

http://www.businessweek.com/bwdaily...p+news_top+news+index_businessweek+exclusives

http://sanjose.bizjournals.com/sanjose/stories/2006/11/13/daily65.html

http://business.guardian.co.uk/story/0,,1949816,00.html?gusrc=rss&feed=1#article_continue



http://www.time.com/time/magazine/article/0,9171,941753,00.html?promoid=googlep

“…Friedman is a man totally devoted to ideas—isolating them in pure form, expressing them in uncompromising terms and following them wherever they may lead.[B] His basic philosophy is simple and unoriginal: personal freedom is the supreme good—in economic, political and social relations.[/B] What is unusual is his consistency in applying this principle to any and all problems, regardless of whom he dismays or pleases, and even regardless of the practical difficulties of putting it into effect. He alternately delights and infuriates conservatives, New Left radicals and almost every group in the crowded middle road…”


~~~~~~~~~~~

I just watched the final portion of a 1994 interview on CSPAN 2, I think, or CSPAN, conducted by Brian Lamb with Nobel Prize winning economist Milton Friedman, who passed away at age 94.

The interview will be reshown in its entirety a few hours from now if anyone is interested and I have hopes that the Charlie Rose program, rerunning later tonight might also feature previous interviews with Mr. Friedman.

Someone on another thread noted his passing and gave credit during the rule of Margaret Thatcher in the UK, who raised Great Britain in economic stature by instituting policies advocated by Friedman.

Friedman acknowledges Adam Smith and F.A. Hayek, (Road to Serfdom) as his intellectual inspiration and berates economists J.M. Keynes and J.K. Galbraith as being socialists and dysfunctional.

Friedman, like Smith and Hayek, advocate a small, limited government, acting under the constraint of constitutional mandate, acting to protect rights and enforce laws and very little else.

Amicus…

 

[Explaura]

Goodbye Milton Freidman..

I think you were wrong and shortsighted about some things, and your work was used improperly for shifty political gains.. But I think you were also a genious about some things and I would have loved to meet you.

I hope you rest well and get good seats in the afterlife to watch what will really happen in world economics for the next hundred or so years. And I hope when I get to the afterlife I can read your takes on it. Because what would heavan be without economists.

 

[Pure]

business columnist, in Toronto Star, David Olive:

As an ideology, Friedmanism is widely subscribed to; in practice, it is stillborn. Viable leadership today comes with promises of frugality and doing more with less.

But then, inevitably, come the hiring and acquisition binges, the corporate-welfare handouts and renewed farm subsidies, the extravagant public expenditure.

 

[amicus]

Well, to be honest and generous; the thread received two more replies than I thought it would, from the 'usual suspects'` but disappointing, none so far from the rational.

It is both interesting and enlightening, or it should be to you, to learn that many Doctorate Degrees in Economics are awarded each year, from major 'big name' Universities without Milton Friedman's name or works being referenced.

That also holds true for Freiderich Hayek who also holds high world stature as a 'Classical Economist', a 'Free Market' economist and many others. Instead the lefft infected system of higher education prefers its' own at the trough, such as Samuelson, Keynes and Gabraith, all exponents of the now defunct, socialist, command economy models.

Formal education, controlled by members of NEA and AFT and AAUP, all espousing secular humanism, social liberalism, have infected the educational system beyond salvage and in doing so, have the power to reject teaching applications from anyone who does not belly up to the left wing bar.

And of course, it is not limited to education, the taint of the left controls, directs and limits the publishing industry, the film and script writing industry and the formal art industry, not just in the United States, but virtually around the world.

Thus is your values reflect classical liberalism, if your politics imply small government and free market ideas, unless your name is Ann Coulter or Ayn Rand, forget submitting your work to the left wing powers that be for it will be rejected.

Ayn Rand submitted "Atlas Shrugged" a world wide best seller, to over a dozen major conventional publishing houses before it was published.

Milton Friedman, even after his Nobel Prize award, found his books were still not even reviewed by the established Liberal Press, such as the New York Times, and Washington Post.

I am personally unsure as to how this lopsided situation can ever be corrected but as Friedman says, it must, or human freedom will wither from lack of exposure.

Of course, that is just what the left desires.

amicus...

 

[Roxanne Appleby]

It is sad. I mourn his passing.

But - What a man! What a life! Way to go, Millton!

His Newsweek columns back in the 1970s helped shape my own view of the world. His Free to Choose TV series was brilliant. There was no way that a fair-minded person for whom socialism had not already attained the status of religious dogma could watch that and not come away thinking that it was an accurate description of the world, and of human motivations.

Edited to add, my favorite line from today's WSJ lead editorial (emphasis added):

His 1980 book, "Free to Choose," was a best seller, and the videos that accompanied it were smuggled behind the Iron Curtain like seeds of revolution.

 

[elfin_odalisque]

Ami

For once a shade of scatter-gun approach seems to have crept in.

First, Hayek and Friedman have routed Galbraith and Keynes forever. The reason that politics is boring is that liberal/socialist parties have reluctantly accepted that supply side economics and five-year tractor production targets do not work. Friedman has won the argument for globalization, demand and wealth driven economics and the embarrassment of the US and Europe over farm subsidies in the Doha round of WTO negotiations bears witness to his intellectual, if not his political, success.

You seem to confuse two groups of political thought. The government payroll vote - be it federal or state - will always support the centrist, corporatist, supply-driven philosophy without possibly considering themselves to be on the left. These people, of whom the schoolteachers are just the prophets, are not 'humanists' in the accepted sense. They do not accept that people are inately capable of organizing and achieving their own lives without 'nanny state' control. The midterms just showed - wnners and losers, Reps and Dems - that all politicians belong to this group.

The state payroll vote must not be confused with the champagne socialists. As you sit in your beachside Malibu residence negotiating a megabuck film/recording contract it is easy to mouth off platitudes about the under-privileged. Cancelling debt in Africa or showing second-rate Powerpoint slides about the new religion of climate change is a lot easier than raising educational standards and expectations.

From South America to the US, Europe and the former Soviet bloc, Friedman triumphed. The baubles and accolades aren't important. We live his legacy every day.

 

[amicus]

Thank you, Elfin, for your contribution to the memory of this man and his work.

I don't know it all; if I did, maybe I would be rich and famous.

At least my 'shotgun' approach is 360 and not limited to just one aspect of this wide and varied existence we share.

I am also not a scholar or a pragmatist, nor even a practical man and eight years at four different Universities didn't seem to help in the least.

Your post sounds quite knowledgeable if perhance a little cynical and you do raise some interesting thoughts and conclusions; unusual on this formum, but appreciated nonetheless.

A good day to you.

amicus...

 

[Roxanne Appleby]

Ami

For once a shade of scatter-gun approach seems to have crept in.

First, Hayek and Friedman have routed Galbraith and Keynes forever.

As the WSJ put it today, ' In awarding its Nobel in 1976, the Royal Swedish Academy of Sciences cited his "achievements in the fields of consumption analysis, monetary history and theory, and for his demonstration of the complexity of stabilization policy." In layman's terms, the Swedish Academy credited him with nothing less than shredding the Keynesian consensus.

'First, he had shown that men are no fools. People spend money in accordance with their income expectations over the long-term, not in response to one-time "stimuli" from the government . . . '

 

[Pure]

i don't think Friedman or his people 'shredded' the Keynesian consensus. from Reagan to GWB, deficit spending, massively done, is a mainstay of policy. GWB further introduced the drugs for seniors, the largest increase in entitlements for decades.

from Reagan to GWB, there was TALK about government being the problem, about 'downsizing' it or limiting its intrusiveness. all pure talk, as far as i know, with one exception:the tax burden on the rich and the corporations has been reduced. on TV last night was an American named Cyrus Kar who was held 50 days without charges in an Iraq prison;

http://abcnews.go.com/Nightline/International/story?id=1065736&page=1

finally he was released since no evidence was found linking him to terrorism.

 

[Explaura]

mm, If people are getting economics degrees without ever mentioning Milton Friedman it would surprise me greatly. There are a lot of contested theories floating around the halls of academic economics and his are among the most prominant in certain areas.

It makes me sad that I don't have a clearer understanding of exactly what he proposed, and what it means. My head is full of fog lately. And not like the magic smoke that makes computers run. rar

But I'm a regular suspect now?!
(somehow that feels like an accomplishment.)

 

[amicus]

Chuckles, not a laudable inclusion my dear, but if it pleases you...

Also, prepare to be surprised as Friedman himself on the interview I mentioned said he had several letters from students who wondered why his works and Hayek's were not included in their economics curriculum and one I recall from U of C at Berkeley, which did not surprise me at all.

I can give you a personal experience also, of a young man I met at Murray State University who came to a coffee shop I ran and entered into a series of conversations. He said the same thing, but he was only in his senior undergrad year and had never been introduced to a single Classic Free Market economist and all the books he had to buy were Samuelson, Galbraith and Keynes, the controlled market freaks.

such is life among the unwashed...


amicus...

 

[SEVERUSMAX]

Whatever your politics, it's a loss of a great mind. I won't step into this, since I think that the President and his cronies are merely paying lip service to Friedman, while being quite Keynesian in practice.

 

[Pure]

yes, ami, it could be the perennial left wing conspiracy [next meeting this Sun am at the Washington Monument.] it could also be that Friedman was NOT much mentioned for the same reason that Lysenko is not much mentioned in biology courses.

 

[Liar]

I can give you a personal experience also, of a young man I met at Murray State University who came to a coffee shop I ran and entered into a series of conversations. He said the same thing, but he was only in his senior undergrad year and had never been introduced to a single Classic Free Market economist and all the books he had to buy were Samuelson, Galbraith and Keynes, the controlled market freaks.

Huh, that's odd. I'm only taking basic economics as a side dish one term thing, and Friedman, among others, have already been on the menu.

He had some solid ideas, mainly of the purely hypothetical kind that didn't really transfer well to realpolitik, and were rightfully contested on others. But all in all, poked a few old asses with sticks in his days. Which is always laudable. Because even IF the old asses are right, they need to be poked with sticks now and then, to be sure they haven't died. So regardless... R.I.P. 94, eh? That's quite a bit.

 

[Explaura]

Yeah, I studied econ at a small fairly crappy University and right from the beginning, my proffesors were bringing him up as the representative of the other point veiw fairly frequently.

 

[Roxanne Appleby]

Whatever your politics, it's a loss of a great mind. I won't step into this, since I think that the President and his cronies are merely paying lip service to Friedman, while being quite Keynesian in practice.

"We're all Keynesians now." - Richard Nixon

Keynesianism was actually disproved once and for all by the stagflation of the 1970s, which wasn't supposed to be possible in its model. Politicians and many academics (who belong to the class whose interest is served by expanding government) still pretend that Keynesianism is valid, because they love the "pump priming" and "stimulus packages" it justifies - ie., more government handout

 

[Roxanne Appleby]

Yeah, I studied econ at a small fairly crappy University and right from the beginning, my proffesors were bringing him up as the representative of the other point veiw fairly frequently.

There are two points of view in economics - the correct one and the incorrect one. Those who hold the latter are for the most part characterized by ignoring or not understanding the role of incentives and self interest in human affairs. They have a vision of how they want people to be, and pretend that their vision describes reality. In consequence, they don't really believe the laws of economics that they teach - supply and demand curves, marginal costs, marginal utility, etc. - because the logic of all these depends on the fact that humans respond to incentives and pursue their own self interest. Strange, but true.

"I have found, over a long time, that some people are natural economists. They don't take a course, but they understand--the principles seem obvious to them. Other people may have Ph.D.s in economics, but they're not economists. They don't think like an economist. Strange, but true." - Milton Friedman

 

[Explaura]

There are two points of view in economics - the correct one and the incorrect one.

I disagree.

In economics, much of the data is ambiguous so taking anyones theoreticial pronouncements as absolute is a leap of faith. I suppose that everyone has points of faith that they are quite attached to. However, because you subscribe it doesn't make others necessarily wrong.

For that matter, particularly regarding macroeconomics which is really the game we are talking about, the cost curves, supply and demand, and productivity curves that econ students have been taught about for the last 60 years are beginning to be considered just about obsolete when confronted with newer ideas like game theory and coasian and environmental economics. The economy is not simple. Even those who know the most about it do not agree by any means. And maybe to you that spells a majority of the experts having their heads up their asses, but I guess I do not agree. I couldn't say myself what the "correct" veiw might be. I suppose I might say that the simplified models that economics deals in can not encompass the complexity of the real world for all situations. I think we have to keep coming up with new models and paradigms as we discover the holes in our old ones.

 

[amicus]

Explaura...your criticism is wrongly and unfairly directed, if I may.

No one questions the complexity of macroeconomics and the necessity for model usage to understand and benefit from the internal workings of the market and the ever changing environment in which it functions.

Friedman used an example of the common ordinary yellow pencil to demonstrate both the complexity and the simplicity of a market place operation.

He began by saying that no single person could make a single pencil, nor could an entire government apparatus order it done. To bring a single pencil into existence requires a graphite miner in South America to be paid enough by someone to go out and dig the graphite ore that becomes the 'lead' in a pencil. Then he drew attending to the timber faller in Oregon that had to be paid to fall a tree as just the beginning of the process to create and manufacture the wood that surrounds the graphite. Toss in the eraser that comes from another part of the world and the paint that coats the wood and you have a complex series of events that must happen, must happen in order and must happen for a reason if a single pencil is to be manufactured, transported, displayed and sold.

The complexity of such a system, such a series of interlocking events is so vast and complex as to tax even the best computers and government agencies who might attempt to manage such an endeavor.

But the invisible hand of the free market place accomplishes that task and billions of other more or less complex tasks every hour of every day, on and on, almost with direction.

The motivating force is the self interest of the miner in Bolivia, the self interest of the logger in Oregon and who ever supplies the material for the eraser and the paint, and they do it without direction and most importantly without compulsion or force.

As I underlined and placed in bold face at the beginning of this thread, the guiding factor in Friedman's economic thinking is above all, human freedom of action. Given economic freedom men will naturally choose to cooperate for their own benefit and mutual advantage and in doing so, make products and services available, world wide without the use of force or compulsion.

You just don't get it, do you?

amicus...

 

[amicus]

As I had hoped and somewhat expected, The Charlie Rose Program on PBS, this evening, Friday, 11/18/06 did a special eulogy for Milton Friedman including portions of two previous interviews by Mr. Rose, the latest being 12/26/05 when Mr. Friedman was 93 years of age.

He was amazingly alert and added one thing I forgot to mention in the 'pencil' analogy of the free market place: he made the point that the free market, capitalism facilitated 'freedom' even between people who hated each other and did not speak the same language or live by the same values.

The examples were Communist China and Socialist Venezuela, both trade partners with the US but occupying opposite ends of the political spectrum.

Thus, the free market place acts as a means by which people of different views can cooperation and coordinate efforts without ever speaking to each other or coming into a values conflict.

He also defined socialism as where the state owns and operates the means of production and noted that no one believes that is a functional econominc system any more except North Korea and Venezuela.

Friedman's impact on world economy is even greater than I had thought, so it can be said that even Amicus can learn somthing new and change his thinking.

ami...

 

[Explaura]

ok.

Maybe we aren't talking about the same thing. When I hear "correct" and "incorrect", I am assuming that we are discussing which models to use. Basically, how the forces of self interest and supply and demand congeal to make what we have for an economy, and how we want to deal with it.

The fact that self interest and supply and demand are involved seems to me pretty obvious.

However, if you say that your model, or your conceptualization beats all the others, I think that is a pretty arrogant and ill informed statement.

 

[amicus]

I am without a doubt arrogant, my dear, but rather well informed which, should you read a little, you will discover all by your little self.

amicus...

 

[ishtat]

Whatever your politics, it's a loss of a great mind. I won't step into this, since I think that the President and his cronies are merely paying lip service to Friedman, while being quite Keynesian in practice.

There is more sense in this comment than in most of the others on this thread.

Both Friedman and Keynes were great minds .Both however are shortsold by comment which deals only in headlines which say "A was right and B was wrong"( or vice versa) Friedman's analysis of the market was far more subtle than the crudneess with which it is commonly expressed. Keynes is largely remembered and reviled for his theories of (full) employment. His Magnum Opus was "The General Theory of Money Interest and employment" My guess is that most analysts particularly of the left have never read this and especially have never read the sections on Money and Interest.

Keynes had a first class understanding of how markets work and in the first two thirds of his work he and Friedman would have been in broad agreement.

Another fact almost never mentioned by old style left wingers is how Keynes made his own personal and substantial fortune? He made it as a young man through speculating in the Stock Market showing a remarkable talent for appreciating market processes as he did so!

Severusmax is dead right about lip service.

1 In 2006 US goverment subsidies to farmers exceeded those paid by the EU.

2 The drugs subsidies to seniors have already been noted.

3 The unfunded US social security liabilities match any in Europe.

We are all Social(ist) Democrats now !

Friedman must already be turning>

 

[Liar]

As I underlined and placed in bold face at the beginning of this thread, the guiding factor in Friedman's economic thinking is above all, human freedom of action. Given economic freedom men will naturally choose to cooperate for their own benefit and mutual advantage and in doing so, make products and services available, world wide without the use of force or compulsion.

You just don't get it, do you?

amicus...

Oh, I get it, all right. It's a very nice concept. In an economically sterile environment and a homogenous population, it just might work. It's definitely the right direction to aim for, but like I said, it doesn't transfer well to realpolitik, unless shot full of qualifiers.

Kind of like world peace. Now, why don't we have that?

Cynical, moi?

 

[amicus]

Not sure exactly where you are coming from or going to Ishtat...but, and if I have said this before, tolerate my aging memory, but "Ishtat", every time I read the moniker, reminds me of one of Heinlein's novels wherein one of his characters lived 2500 years, Lazarus Long...and was there a character, "Ishtat"?

Your reference to the works of J.M. Keynes also keyed a statement by Friedman, in that he had two best selling works, his most important and influential, was a less selling work dealing with Monetary Theory and as a legacy, he hoped to be remembered for that.

I wish, as Lazarus Long, I had multiple lifetimes to live...to be afforded the opportunity to devote a lifetime to any one of several pursuits...sighs...alas...


amicus...