The media is obsessing with Rand and Milton Friedman

[neoreactionary]

And you would characterize monetarists as wanting no central control in money?

No, that would not be a fair characterization. Monetarism is unrelated to the question of whether there should be central control in money. Thus, some monetarists (such as Murray Rothbard) want there to be such control, while others (such as myself and Milton Friedman) do not.

 

[Sola_Fide]

Ruling that money will be backed by a commodity or basket of commodities is central control of money, too.

I agree.

 

[Bastiat's The Law]

I think many of you fail to understand what made Friedman great. He communicated libertarian ideas to the common man effectively. Purely judged as an economist there is no doubt he was severely lacking. He was like the Ronald Reagan of economics.

It's the same problem that causes so many to hate Rand. Rhetorically, we agree with a huge percentage of what Friedman says and his value as the preeminent economic authority of the day was incredibly valuable. Go watch him on Donahue. Compared to the statism they are pitching, he sounds like an anarchist. Brilliance that has no influence is worthless in politics.

Bingo!

 

[Sola_Fide]

No, that would not be a fair characterization. Monetarism is unrelated to the question of whether there should be central control in money. Thus, some monetarists (such as Murray Rothbard) want there to be such control, while others (such as myself and Milton Friedman) do not.

Murray Rothbard:

In common with their Keynesian colleagues, the Friedmanites wish to give to the central government absolute control over these macro areas, in order to manipulate the economy for social ends, while maintaining that the micro world can still remain free. In short, Friedmanites as well as Keynesians concede the vital macro sphere to statism as the supposedly necessary framework for the micro-freedom of the free market.In reality, the macro and micro spheres are integrated and intertwined, as the Austrians have shown. It is impossible to concede the macro sphere to the State while attempting to retain freedom on the micro level. Any sort of tax, and the income tax not least of all, injects systematic robbery and confiscation into the micro sphere of the individual, and has unfortunate and distortive effects on the entire economic system.

 

[neoreactionary]

Murray Rothbard:

David Friedman:

Rothbard had a problem. He thought he was a great economist, but practically nobody within the profession agreed and most of them had never heard of him.

Rothbard had a solution. He was ignored because he held extreme pro-market views, which were ideologically unpopular in the academy.

Rothbard had a problem. Milton Friedman held extreme pro-market views--not as extreme as Rothbard's, but far enough from academic orthodoxy so that the same effect should have existed. But Milton Friedman not only wasn't ignored, he was viewed within the profession as a leading figure--despite his unpopular political views.

Rothbard had a solution--to persuade himself and his followers that Milton Friedman was really one of them instead of one of us, hence his acceptance by the profession didn't contradict Rothbard's view of the reason for Rothbard's non-acceptance.

Maintaining that claim was difficult--at one point I remember being told by a Rothbard supporter, explaining why he was not going to publish a letter of mine in his journal that contained quotes from my father inconsistent with Rothbard's account of my father's views, that if Rothbard and Friedman disagreed about what Friedman's views were, Rothbard was right.

 

[neoreactionary]

David Friedman:

A central problem with the whole attack is that Rothbard is objecting to answers to a different question than Rothbard is asking. Rothbard wants to know what the ideal system would be. That's an interesting question. My father wants to know what changes that might be possible would improve the existing system. That's also an interesting question. But criticizing the answer to the second question as if it were proposed as an answer to the first--especially when there are multiple places where my father said it wasn't, such as his discussion of the state's role in schooling--is not a useful activity, assuming you care whether your criticism is true.

Go back to monetary policy. As best I recall, my father did not--and Rothbard did--object to free banking. It was Rothbard who insisted that willing parties should not be permitted to make a particular sort of contract with each other--and Lew Rockwell, as you can see by the piece of his I linked to, continues to take that position.

I pointed out to my father that, at least in a simplified model, the equilibrium of a free banking system was precisely the behavior of the money supply that my father had argued was optimal, and he did not disagree.

My father did not argue that a stable price level was an ethical ideal--like many of Rothbard's claims, that's his invention. He argued that it had some advantages in reducing transaction costs, and that it was a simple enough objective so that there was some hope of getting government actors to try to achieve it.

Let me offer a simple suggestion. Instead of discovering what Milton Friedman's views were by reading Murray Rothbard, do it by reading Milton Friedman. Start with _Capitalism and Freedom_, which is readable and non-technical. See if what you see fits the picture Rothbard is painting.

 

[neoreactionary]

David Friedman:

Suppose some future historian, in a book on the 20th century, commented that the Drug Policy Foundation was a supporter of the War on Drugs as demonstrated by their support for taxing Marijuana. This is for readers who will not know that marijuana was illegal and what was being proposed was that it be legalized and taxed.

Is it possible that he is an honest man? Yet that's what Rothbard did when he attacked [Adam] Smith for advocating an export tax on wool without mentioning that the export of wool was at the time illegal, the ban enforced by ferocious penalties, and Smith was proposing legalizing it.

 

[neoreactionary]

David Friedman:

What was fundamentally wrong with Rothbard, in my view, was that he was willing to make arguments he knew were wrong as long as they led to what he considered the right conclusion.

 

[mczerone]

Why not just take the Austrian position instead of going to war for Friedman? What a waste.

Because Rand's not a libertarian (i.e. Austrian economics). He's a Republican (i.e. centrally-planned-"free"-market economics).

 

[supermario21]

This is all BS. Rand from the start acknowledged he was an Austrian and preferred an Austrian. Rand was not giving a full-throated endorsement to anyone for Fed Chair. If anything, the interview showed that he's serious about wanting an end to the Federal Reserve.

 

[supermario21]

David Friedman:

What was fundamentally wrong with Rothbard, in my view, was that he was willing to make arguments he knew were wrong as long as they led to what he considered the right conclusion.

Not related to economics, but this definitely applies to Rothbard on abortion.

 

[neoreactionary]

Not related to economics, but this definitely applies to Rothbard on abortion.

It also applies to Rothbard on economics.

 

[S.Shorland]

 

[Reece]

David Friedman:

Suppose some future historian, in a book on the 20th century, commented that the Drug Policy Foundation was a supporter of the War on Drugs as demonstrated by their support for taxing Marijuana. This is for readers who will not know that marijuana was illegal and what was being proposed was that it be legalized and taxed.

Is it possible that he is an honest man? Yet that's what Rothbard did when he attacked [Adam] Smith for advocating an export tax on wool without mentioning that the export of wool was at the time illegal, the ban enforced by ferocious penalties, and Smith was proposing legalizing it.

Rothbard was naming some deviations Smith had, so of course he didn't list off all the good things he supported. One of the things Smith did support was a fairly high tax on wool. That's obviously better than the alternative, but it should still be mentioned when commenting on deviations from free market economics. Maybe it should have been mentioned that the export of wool was illegal, but it certainly isn't dishonest to not include that. A lot of Friedman's attacks on Rothbard are pretty weak (sort of like a lot of Rothbard's attacks on Milton Friedman).

 

[neoreactionary]

Maybe it should have been mentioned that the export of wool was illegal, but it certainly isn't dishonest to not include that.

Strongly disagree. Lies of omission are still lies.

 

[Reece]

Strongly disagree. Lies of omission are still lies.

Uh, no. It wasn't a lie of omission. If I argue that Person X supports some bad policies, it is unnecessary to list all of the good policies Person X supports. The marijuana analogy is silly, because Rothbard would have said that the person supported taxing marijuana, not that they supported the "War on drugs." If I was writing about where that person deviated from the free market, I would write that they supported taxing marijuana. If I was writing about their position on drug policy, I would say both things (they supported legalization and taxation). Remember, this was a single chapter on Smith, not a book. This should be pretty easy to see, but Friedman loves to argue about Rothbard, just as Rothbard loved arguing about Friedman (and Rockwell picked up since Rothbard died). It's a ridiculous feud.

 

[DavidFriedman]

Source of information on M Friedman

If you want to find out what Milton Friedman believed, reading what Rothbard says Milton Friedman believes is not a very sensible tactic, any more than it would be sensible to find out what libertarians believe by reading articles by people hostile to libertarianism. You would be better off reading Friedman.

Monetarism is not a theory about what monetary system should exist but about how money interacts with the economy. One could be a monetarist in favor of central banking, a monetarist in favor of competitive private issuers of money, a monetarist in favor of a gold standard, a monetarist in favor of fiat money. Similarly, identifying with the Austrian school or the Chicago school--or, for that matter, with Keynesianism--doesn't determine one's political views. Someone might believe that Keynes' was correct about macro-economics but that government attempts to use his ideas to control the economy were unworkable for public choice reasons. One can be an Austrian and in favor of quite a lot of government—consider Mises' views on conscription, military spending, and state opera--or a Chicago school anarchist, as I am. There's at least one edition of _The Road to Serfdom)_ that has, on the back cover, a glowing endorsement by Keynes.

 

[krugminator]

If you want to find out what Milton Friedman believed, reading what Rothbard says Milton Friedman believes is not a very sensible tactic, any more than it would be sensible to find out what libertarians believe by reading articles by people hostile to libertarianism. You would be better off reading Friedman.

Monetarism is not a theory about what monetary system should exist but about how money interacts with the economy. One could be a monetarist in favor of central banking, a monetarist in favor of competitive private issuers of money, a monetarist in favor of a gold standard, a monetarist in favor of fiat money. Similarly, identifying with the Austrian school or the Chicago school--or, for that matter, with Keynesianism--doesn't determine one's political views. Someone might believe that Keynes' was correct about macro-economics but that government attempts to use his ideas to control the economy were unworkable for public choice reasons. One can be an Austrian and in favor of quite a lot of government—consider Mises' views on conscription, military spending, and state opera--or a Chicago school anarchist, as I am. There's at least one edition of _The Road to Serfdom)_ that has, on the back cover, a glowing endorsement by Keynes.

David, what is your opinion of the criticism Rand Paul is receiving for naming your dad as a choice as Fed chair along with Hayek? Also do you think he would have supported QE2 and QE3?


What do you think about this article that is titled "Rand Paul loves Milton Friedman, but Milton Friedman would have hated Rand Paul?"http://www.theatlantic.com/business...n-friedman-would-have-hated-rand-paul/278589/
[h=1][/h]

 

[helmuth_hubener]

1. He convinced Nixon to get rid of the draft.

For the wrong reason! He said the draft should be ended so they could more effectively conduct the killing in Vietnam, because volunteers would be more efficient killing machines than slaves. True, but we as libertarians, no, as decent human beings, don't want wars to be able to be conducted more effectively!

2. His monetary ideas were used to get inflation under control in the early 80's.

True, to an extent. Increased foreign holding of dollars was the key ingredient, but Paul Volcker did raise interest rates. Not that Milton Friedman has a monopoly on the realization that: "Gee, maybe raising interest rates might slow down the rate of money creation," since that is, uhh, precisely what raising the interest rate does! Which everyone knows! It's the definition of raising the interest rate. So, yes, minor half-hearted props to Paul Volcker, but none to Friedman. Sorry.

Friedman lovers, though, here is his "Free to Choose" TV series now online for free:

http://www.freetochoose.tv/broadcast.php

 

[DavidFriedman]

David, what is your opinion of the criticism Rand Paul is receiving for naming your dad as a choice as Fed chair along with Hayek? Also do you think he would have supported QE2 and QE3?


What do you think about this article that is titled "Rand Paul loves Milton Friedman, but Milton Friedman would have hated Rand Paul?"http://www.theatlantic.com/business...n-friedman-would-have-hated-rand-paul/278589/
[h=1][/h]

I'm afraid I don't have an opinion on those questions. I don't do macro, so can't predict what my father's view would have been on a situation that came into existence when he was no longer around to comment on it.