Friday, November 17, 2006

Milton Friedman's Intellectual Rigor

Economist Milton Friedman, an unabashed advocate of free markets, died yesterday. I disagree with much of what he wrote about government and politics, but I sure do admire his rigor, consistency and clarity of exposition. As economist Austan Goolsbee writes admiringly in the New York Times, Friedman was a passionate and effective debater:
Mr. Friedman loved to argue. They say he was the greatest debater in all of economics. As improbable as it sounds, given Mr. Friedman’s small frame and thick glasses, few who saw him would deny that he had an astounding amount of charisma. It probably explains why he was so successful on television. While being an academic powerhouse, he really could explain things clearly.
In a discipline known for mushy pronouncements, Friedman always staked out his position with unmistakable clarity, as reflected in his 1970 article (read by countless MBA students), "The Social Responsibility of Business Is to Increase Its Profits." Friedman characteristically gets right to the heart of the matter:
What does it mean to say that "business" has responsibilities? Only people can have responsibilities. A corporation is an artificial person and in this sense may have artificial responsibilities, but "business" as a whole cannot be said to have responsibilities, even in the vaguest sense.
It's typical Friedman. You may disagree, but you better think through your argument carefully. In this spirit, Friedman's influence goes beyond his advocacy of free markets. The force of his arguments has forced those who choose to differ to be more rigorous in their thinking. Unfortunately, many who claim his legacy haven't demonstrated the same clarity of thought.
Milton Friedman wholeheartedly supported George Bush's tax cuts, though I suspect he was not so approving of the spending increases we've seen in the last six years. So I was intriqued when Brad DeLong invoked Friedman two months ago:
As Milton Friedman puts it, to spend is to tax. Bush's spending increases--defense, Iraq, the Republican porkfest, the Medicare drug benefit--are still there, just as things you have charged to your VISA don't go away if you make only the minimum monthly payment. What George W. Bush has done has been to shift taxes from the present to the future--and also made future taxes uncertain, random, and thus extra-costly from a standard public finance view.
One wishes that the Republicans in charge had demonstrated Friedman's rigor and intellectual integrity when they plunged our government back into the abyss of deficit spending after a too-brief period of sound fiscal stewardship.


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