Milton-Friedmanism RIP

Brad DeLong is on a roll this week. He’s declared the Democratic primaries over. And now he has declared Milton Friedman dead.

He’s got a better chances for selling the second claim than the first, but actually, his full claim is stronger: not just that Friedman is dead but that the Age of Milton Friedman is now kaput at the age of 30, the victim of increasing irrelevance and general exhaustion.

Okay, I exaggerate. DeLong didn’t quite declare Friedmanism over, but he did write it obituary. Friedman, says DeLong:

adhered throughout his life to five basic principles: strongly anti-inflationary monetary policy; a government that understood that it was the people's agent and not a dispenser of favors and benefits; a government that kept its nose out of people's economic business; a government that kept its nose out of people's private lives; and an enthusiastic and optimistic belief in what free discussion and political democracy could do to convince people to adopt principles one through four.

The fifth, I’d say, is not really a “principle” as it is a description of Friedman in action. Anyway—DeLong tips his hat to Friedmanism, particularly insofar as it got us out of the doldrums of the 70s. But:

Nevertheless, the distribution of economic welfare produced by the market economy does not fit anyone's conception of the just or the best. Rightly or wrongly, we have more confidence in the correctness and appropriateness of political decisions made by democratically elected representatives than of decisions implicitly made as the unanticipated consequences of market processes.

We also believe that government should play a powerful role in managing the market to avoid large depressions, redistributing income to produce higher social welfare, and preventing pointless industrial structuring produced by the fads and fashions that sweep the minds of financiers.

DeLong says he builds on the idea “that market economies and free and democratic societies are built on a very old foundation of human sociability, communication and interdependence.” This declaration is not, I think, merely an empty vacuity. This capacity for cooperation, contingent and limited though it may be, is one of the extraordinary facts of the human condition. It is a feature which, as the Victorians would have said, distinguishes us from the lower animals. It’s the kind of characteristic which economic modeling, at least through the Age of Friedman, has kept pretty much at bay.

DeLong builds his riff on a remark from Dani Rodrik, the development economist. The choice is worth noting, I think, because the development economists have gone further than virtually anyone else in trying to figure out what actually works in society. They know better than almost anybody that a “market” is a cultural artifact the creation of human actors, one that that exhibit a thousand different faces, only some of which let the human spirit soar.

Fn.: I’ve always been a little pushed by the idea that “Friedman” is somehow central to the age of Friedman. Granted that he’s an important economist, but there are a fair number of those. His real mastery is publicity. Others (von Mises, Hayek, I’d say particularly Frank Knight) deserve a lot of credit for what is Friedmanesque about Friedmanism. Friedman may be just one more illustration of the insight credited to his friend and colleague, George Stigler—that the guy who credits for an idea is not the first man to think of it, but the last.

Update: Well, can't please 'em a (link):

Oh my! Is this confused mix of platitudes, generalizations, half-truths, old wives’ tales and gool ol’ collectivism supposed to replace Friedman’s vision for a society of free associating (legal) peers, on the basis of the impersonal justice of property rights? Dream on.