Sunday, November 19, 2006

Shalom Milton Friedman

Public lauding of economist Milton Friedman following his passing earlier this week stands in stark contrast to that accorded to John Kenneth Galbraith.

Even self-proclaimed social justice advocate Lawrence Summers (yes, we all like to think we stand for social justice) is in on the band wagon.

Friedman was indeed a champion of liberty. But his notions of "liberty" constitute an exceedingly narrow, myopic view of this principle that worked to lock in injustice and the maldistribution of society's wealth and power. The notion of freedom propounded by Friedman is one of constricting government in a Norquistian sense to prevent collective action from impinging upon rich people's "right" to be rich and powerful. In economic terms, proponents of this conception of freedom have operationalized it to mean cutting taxes, privatizing the public and communal sphere, and deregulating big business and financial markets. In its less flattering representations, "free" markets can also be described as market tyranny or market-Leninism.

The "liberty" story is not so simple. Philosophers have struggled since ancient Greece to give shape to the abstract construct of freedom. Today, philosophers identify multiple and multi-faceted definitions of freedom. Isiah Berlin, for example, sees freedom bifurcated between negative liberties—-conceived as the absence of obstacles or constraints on the behavior of individuals, or “freedom to”—-and positive liberties—-the enabling of individuals to achieve those things desired in life, or “freedom from.” Some see this distinction between negative and positive liberty as an artificial dichotomy, while others see the two as synonymous. Orlando Patterson, in his epic history of freedom, sees Berlin’s diametric freedoms as comprising but one element in a broader conception of freedom. To these personal freedoms Patterson adds sovereignal and civic freedoms that together comprise a relevant definition on freedom only when taken in the gestalt.

Fellow Nobel laureate Amartya Sen argues convincingly that ensuring these multiple and multifaceted freedoms are in fact central to ensuring the individual freedoms that Friedman cared so much about. After all, as Hannah Arendt notes: “A never-ending accumulation of property must be based on a never-ending accumulation of power…The limitless process of capital accumulation needs the political structure of so ‘unlimited a power’ that it can protect growing property by constantly growing more powerful.” In other words, the freedom to amass property which Milton Friedman held dear is the flip side of concerted state-led repression.

While clearly not an exhaustive account of the philosophical debates over freedom, these examples indicate at least that freedom comes in multiple forms. And after several millennia, philosophers are no closer to deciding just exactly what the nature of "free will" is anyways. My present concern, though, is not so much a debate about philosophies of freedom, but who Milton Friedman was and what he stood for.

Take two examples of what Milton Friedman did in his life's work. First, Milton Friedman was a founding member of the Mt. Pelerin Society--a group of conservative economists formed in the wake of WWII to promote the "free" market. Of course, the group consisted of many continental European economists who had been Nazi collaborators who provided the economic means (ideas, institutions, policies) that underwrote the Nazi war economy. Oops. Ironically for the son of Jewish refugees, this organization was a life-long pursuit of Milton Friedman. Second, and famously, Friedman collaborated with the dictatorial regime in Chile that overthrew democratically-elected President Salvador Allende--who was assassinated in a U.S.-sanctioned coup in September 1973, ushering in an era of government-inflicted political killings that "disappeared" tens of thousands of Chilean citizens (not to mention global terrorist activities sponsored by the Chilean government that Milton Friedman backed).

There's no real conclusion to this post because there is no real conclusion to this saga. The "free" market ideology machine for which Milton Friedman was midwife is stronger than ever. Instead, I will conclude with a choice quote from Lawrence Summer's elegy:

Another example of Mr. Friedman’s influence is the structure of modern financial markets. Today we take it as given that free financial markets shape finance. The dollar fluctuates unhindered against other currencies and there is an entire industry of trading futures and options on interest rates and currencies. At the time Mr. Friedman first proposed flexible exchange rates and open financial markets, it was thought that they would be inherently destabilizing and that governments needed to control the movement of capital across international borders.

Forget not that Larry Summers served as Deputy Treasury Secretary during the 1997-98 Asian Financial crisis (which also ensnared Brazil, Russia, et. al. and threatened global financial collapse). That's Summers to the right of Maestro. If anyone should know the miserable state of speculation-led instability in financial markets wrought by precisely the deregulation and floating exchange rates Friedman advocated, it is Larry Summers.


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