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.

Milton, We Hardly Knew Ye...

I got snide about Lionel Tiger for his meanness over the death of Clifford Geertz so I had better tread carefully when I try to say something about Milton Friedman. Not much real risk here, I suppose: Milton is (was) Milton and I am I and there isn’t anything that I could say that would burnish or blight his image by an atom.

Anyway it isn’t really Milton the economist that I want to talk about (a topic on which I am surpassingly unqualified to opine) but Milton the plaster Madonna in front of the Corpus Christi parade. My point is: whatever his contribution to economics, his real fame comes from his role as a dialectition in the public forum: not exactly a front man, but a rallying-point for a whole bunch of causes, some of which have nothing to do with him and some of which are (or ought to have been) beneath his dignity.

The libertarian (I will not defame him with the much-sullied label of “conservative”)—I say the libertarian “movement,” embracing the full continuum from honest and thoughtful social critics through to barking wingnuts, have well learned the lesson that to have a cause, you need a narrative, and to have a narrative, you need characters. What ever else he may have accomplished, Milton played this iconic role to perfection. His colleague Gary Becker nailed it when he spoke of Milton’s “enormous zeal to convince the heathen.” (Quoted in Alan Ebenstein, Friedrich Hayek at 267). It’s a style of debate that we haven’t really seen since the days of Peter Abelard. It adds force, not incidentally, to Dierdre McCloskey’s point that economics has as much or more to do with rhetoric than it does with cool analysis.

The right intuitied this point a generation ago when they figured out how to demonize John Maynard Keynes, transmogrifying him into a convenient hatrack for any kind of leftist absurdism. A bit of the mirror image happened to Friedman: he gets credit for all kinds of stuff that isn’t even his affair. Just yesterday I heard a commentator who should have known better somehow associating Friedman with Ronald Reagan’s winning of the Cold War.

People, let’s review the bidding here. First, Ronald Reagan did not win the Cold War. He huffed and he puffed and the house fell down—but nobody was more surprised to the Reaganites, who had never in their wildest fantasies supposed that the house was actually made out of straw. Second, only in the remotest sense did Milton have anything to do with it. He certainly thought Communism A Bad Thing. In a sense he thought Capitalism A Good Thing, but if you listened closely, you came to understand that perspective was largely hypothetical—as they used to say about Christianity, the trouble with Capitalism was that it hadn’t really been tried yet. But to conflate these insights into a single obit is not sober reporting, it’s just a kind of triumphalism, or at least a consoling bedtime story for the true believers huddled around the campfire.

It’s an old habit, really. It’s the same device that makes us anoint Adam Smith as the father of science that he never even heard of. It’s what leads us to wonder what Thomas Jefferson would think of the doughnut hole in Medicare Part D, or whether Jesus would Wear a Rolex on his Television Show (Forgotten that one? Link.). Sober minds will pore over the record to try to disentangle just how much credit for originality belongs to Friedman against, say Hayek (of whom, as it happens, Friedman spoke highly)—just as they do with Adam Smith, or Jefferson or Jesus.

So now he belongs to the ages. Sartre says somewhere that one of the downsides of being dead is that you no longer get to participate in the making of your own story. Up until yesterday, Milton continued to participate in his own story. But it may have gotten away from him some time ago, and it surely will now.