Farewell, Dr. Friedman


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送交者: slashdot 于 2006-12-03, 20:33:06:


(why all governments are evil)

http://online.barrons.com/article/SB116381029790026944.html?mod=Economic+Beat

Farewell, Dr. Friedman
By GENE EPSTEIN

MILTON FRIEDMAN WAS A HERO OF MINE. He didn't risk his life, or even do jail-time, for his outspoken beliefs. But he was viewed as a pariah for much of his career. When his classic popular work, Capitalism and Freedom, was first published in 1962, it drew more scorn than praise. The New York Times did not even review it.

The eventual transformation of his image to that of gray eminence is due in part to the way the conventional wisdom caught up with some of his free-market views. That he managed to last until 94, before dying last week, also helped; we do tend to revere the old.

I personally revered Milton Friedman, although not for his formal work in economics. While he deserves credit for his influence on mainstream theory, I attribute that more to the weakness of that theory than to any special contributions of his.

When most economists were focused on the wonders of Keynesian fiscal policy, he pointed out that money-supply matters. But Friedman's mechanistic view of money was thin gruel compared to the seminal contribution of Austrian economist Ludwig von Mises.

Friedman's "permanent income" hypothesis also was helpful. It holds that most people have a tendency to think long-term when they make spending decisions. Otherwise, economic theory succumbs to the mainstream view of people as just so many Pavlovian dogs, reliably spending however many dollars fall into their hands. But then, I've heard some theorists invoke Friedman's permanent income theory to prove the dubious thesis that households will never alter their spending when they receive financial windfalls.
[miltpic]
Milton Friedman

I revered Friedman for other reasons. For one thing, he was an endless source of insight on radical reform of the economy along free -- or at least, freer -- market lines. For example, he once framed his proposal for a voucher plan to privatize the school system in a striking way, drawing a comparison with food stamps. The government doesn't give people food by running a chain of grocery stores. It distributes vouchers in the form of food stamps that those people take to the grocery store. Similarly, he pointed out, government should not educate children by running a chain of schools. It should give parents "education stamps" in the form of vouchers that they can take to a privately-run school of their choice.

He also had brilliantly intuitive insights about the workings of government. Government spending is not determined by perceived need, he observed; it's determined by how much the government can take in. The only way to cut government spending, then, was to limit the government's take. Hence his memorable observation, "I never met a tax-cut I didn't like" -- although he did add, "but there are some I like more than others."

According to a story that I haven't verified, when Friedman visited Sweden, he was told proudly by his hosts, "We have no poverty in Sweden." To which Friedman promptly responded, "That's interesting. We have no poverty among Swedish-Americans, either." Even if that didn't happen, it could have.

While I never met Friedman personally, I did call him a number of times over the years at his home in San Francisco to solicit his views. We often talked at some length. The Friedman home never made a concession to answering machines. If no one was there to answer the phone, it would just keep ringing the old-fashioned way.

I never spoke directly to his wife. But once, when the good professor was fumbling to remember a name, a woman's voice suddenly shouted that name into the receiver. Rose Friedman had been eavesdropping on the other line.

I also relished the grand old man's occasional insults. "If you don't know that, you really are very ignorant," he once told me, when it became apparent that I was not familiar with some of the details he was then outlining about the evils of the drug laws.

The last time we spoke -- about a year ago -- we talked about the crisis in medical care. An eternal optimist, Professor Friedman believed free market reforms would be introduced to improve the situation.

I knew that he was in bad health, and I concluded the conversation by thanking him a bit more grandly than usual for sharing his insights.

"Nice talking to you," he said, chuckling with pleasure, and hung up.

It was nice talking to you, Dr. Friedman.




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