Friedman's Cruel Legacy

Now that the economists and their camp followers have mourned and celebrated the life of Milton Friedman, allow me to kick a little dirt on the icon. Without question, Friedman was the most influential economist of the second half of the twentieth century, as his admirers claim. What they do not say is that he was also the most destructive public intellectual of our time.

Friedman actually failed as a scientific economist but succeeded as a moral philosopher. His greatest scholarly accomplishment--his monetarist theory of how to regulate money and credit--was intellectually flawed at its core and collapsed when the Federal Reserve tried to follow it. The central bank wisely discarded Friedman's money-supply approach before it did more damage. It is now a forgotten relic at the Fed.

Friedman's broader argument--that a society should be governed by self-regulating markets instead of big government--did better but also did not lead to the utopia he promoted. His "free market" faith has produced instead the very thing Friedman regularly denounced: a bastardized system of interest-group politics that serves favored sectors of citizens at the expense of many others. Enterprise and markets were indeed set "free" of government regulation, but big government did not go away (it grew bigger). Only now government acts mainly as patron and protector for the largest, most powerful interests--the same ones that demanded their liberation. Instead of serving the broad general welfare, government enables capital and corporations to feed off the taxpayers' money and convert public assets into private profit centers, shielded from the wrath of any citizens trying to object. If that is what Friedman really had in mind, he should have said so.

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