The Death of Milton Friedman
November 16, 2006
Milton Friedman died of heart failure, at age 94, today.
I learned of this in the afternoon. Earlier this morning, I had looked up the article on Wiki about Friedman's brother-in-law, Aaron Director. Director died in 2004 at age 102. Director's sister Rose, born in December of 1910, survives both of them.
I first heard of Friedman in April, 1961. I received the first issue of New Individualist Review, a quarterly journal edited by students at the University of Chicago. The lead article, "Capitalism and Freedom," was by Friedman. It was an extract from a soon-to-be-published book with the same title. That was Friedman's first book aimed at the general public.
Over the years, I read his books and profited from them. He was a master at explaining why government-mandated price controls produce undesirable results. Price floors produce gluts. Price ceilings produce shortages.
I was reading The Freeman in those early years. I had purchased Hayek's Constitution of Liberty (1960) in June, 1960, the same month I bought Ludwig von Mises's Human Action (1949). I was more familiar with the Austrian School of economics than Friedman's Chicago School.
The Austrians are more consistently individualistic in their methodology than the Chicago School economists, who rely on statistical aggregates to defend their theories. The Austrians rely on verbal logic to make their points. The Chicago School economists can and do use logical exposition, but they also use lots of higher mathematics when they are debating with their academic peers. The public can more easily understand the Austrians.
Yet when it came time to educate the public, no one did it better than Milton Friedman, at least when his wife Rose was behind the scenes. Their 1980 PBS TV series, Free to Choose, was a masterful defense of the free market. It remains the clearest, most effective case for the free market ever seen on national television. You can see the tenth installment on YouTube (at least today).
The central problem with the Chicago School economists is that they believe in efficiency, even to the exclusion of liberty. They are pragmatists. They believe that the civil government can adopt pseudo-market programs that mimic market choice despite the existence of government force. Time after time, they come out with positions that sound like piecemeal socialism.
Friedman's defense of public school vouchers is a case in point. He argued that if the taxing entity granted vouchers to parents that a public school could submit to the government in exchange for money, this would give parents a greater say in their children's education. Schools would have to compete.
What he never admitted in print was that government regulation would follow the grant of money to schools through parents. All schools receiving the subsidy would be compelled by law to meet guidelines established by state educational bureaucrats through the legislature. This would force private schools that did not want to conform to the state's directives to refuse to take the voucher money. This would force the parents to pay a double tax: one for the public schools and then for the conforming private schools.
Friedman and I debated this in the pages of The Freeman in 1993.
My original article, "Vouchers: The Double Tax," appeared in The Freeman in 1976.
I knew Dr. Friedman, though not well. We both attended meetings of the Philadelphia Society in the mid-1970s. I debated his son David at one of these meetings, I think in 1971. Mark Skousen took the Friedmans, me, and rare coin dealer Van Simmons out to dinner at the annual Gold Conference in New Orleans in 1999. Friedman was as sharp as ever.
Friedman did yeoman service in moving the economics profession away from Keynesianism to a more free market orientation. That he also changed the minds of television viewers testifies to his powers of persuasion. I can think of no other economist who was equally influential with both his peers and the general public. In this respect, he was the consummate heir of Adam Smith.
I just wish he had never helped the Rockefeller agent in the Treasury and the Federal Reserve System, Beardsley Ruml, to persuade the Congress to pass the law allowing the IRS to take our tax money through withholding. Friedman was working for the Treasury at the time: 1943. That decision made the government more efficient than ever before at extracting wealth from the public. The story is posted here:
Some things should not be made more efficient.