Saturday, November 25, 2006
How Milton Friedman Changed the World
The ideas of economists and political philosophers ... are more powerful than is commonly understood ... Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.
—English economist John Maynard Keynes, 1883-1946
He belongs on any list of the 100 most important people since World War II. In some ways, the conversion of China to a market economy, the conquest of double-digit inflation in the United States and elsewhere, the decisions of countless governments to sell (a.k.a., "privatize") nationalized industries—these developments and many more could be traced to him. There was no more ardent or articulate advocate of free markets and personal liberty than Friedman[.]
Free markets favored individual choice and creativity. "The great advances of civilization," he wrote, "have never come from centralized government." But Friedman was not indifferent to societies' hopes to improve themselves through government, and his ideas often aimed to reconcile these goals with maximum individual choice. We have adopted—or are still debating—many of his plans: school vouchers (he believed public schools perform poorly because they are monopolies); the negative income tax (Friedman proposed substituting direct payments to the poor for the "rag bag" of existing government services—the idea partially inspired today's "earned income tax credit," providing subsidies for low-income workers); the all-volunteer military, created in 1973; and personal accounts for Social Security.
For decades, Friedman cheerfully and relentlessly pushed his main ideas, although they were outside the political and intellectual mainstream. With his wife, Rose, he became a best-selling author ("Free to Choose," in 1980, a pro-market manifesto). Time was on their side. Competing ideas proved unworkable, inferior or wrong. Friedman never joined the mainstream, but the mainstream joined him.