On Milton Friedman and Karl Marx

Caveat lector: Whole books have been written on what I do not understand about economic theory. Nevertheless I understand that economics is rightly called “the dismal science.” Last week Milton Friedman died. He and Karl Marx would seem as far from each other as polar opposites can be, but to these eyes, not distorted by hours of actual reading, there is a remarkable similarity between the two giants. (There is the well known story that on his death bed Karl lamented, Je ne suis pas un Marxiste, a claim Milton could also have made.)

Friedman predicted what another economist would later call stagflation—the concurrent rise of prices and decrease in employment. The way out of this dilemma is by fostering a market economy. The market will clear things up if government doesn't interfere (except to control the money supply). But that's not all. Government should not interfere in any way in the economy. Doctors should not be licensed, the market will weed out the good from the bad practitioners. It is an invisible hand, controlling everything.

Marx also believed in the invisible hand. It wasn't the market though, it was class struggle. Soon the gap between exploiter and exploited would be so narrow that the overthrow of capitalism was inevitable. Government would eventually wither away once the workers had survived the inevitable assault on their revolution by capitalist forces.

So, the arch-capitalist and the scientific socialist, are both economic determinists. Marx being discredited, let's explore Milton. Of course the market will weed out the good doctors from the quacks, but without a regulatory agency there'll to be a lot of quacks doing a great deal of harm until word of mouth exposes them. Have you tried to book an airline ticket since deregulation? There were about a dozen national carriers and the meals were free and travel agents could book you. Now? Choices are limited, food costs, and fares are way up. When energy was a monopoly controlled by government, Enron didn't brown-out California. It couldn't; there were regulations that prevented it. I'm not old enough to get confused about which Medicare plan I'll choose, and my hope is that by the time I need it the market will have driven out the crooks, but in the meanwhile, how many seniors are confused? Friedman advocated abolishing the draft—a smaller army means less money to sustain it and longer enlistments mean better soldiers. Let's compare. With the draft we lost Vietnam; without it, we are losing Iraq. If the idea of having an army is winning, what has been accomplished other than creation of what we used sneeringly to call a mercenary army? The poor, the unskilled, still predominate. We talk a good game about supporting the troops, but the non-economic reality is that while those mercenaries are fighting and dying, we're not paying attention, we're watching football and tsk-tsking whenever we see on TV that four more Americans were killed. And why should we be paying more attention? They're mercenaries after all; it's what they do. If they were our children I think we'd be more involved.

Milton said that “The free market is the only mechanism that has ever been discovered for achieving participatory democracy.” These are strange words coming from a man who provided economic advice to the Pinochet regime in Chile. He had Stalinist Russia in mind, but blaming Marx for Stalin is like blaming Jesus for Jerry Falwell. Give the guys a break. Marx was living in a period of ruthless exploitation of the proletariat and he saw the world through that prism. Allowing the market place to dominate wages would result only in continued degradation of the human workers without whom there is no product to sell on the open market.

What Marx and Milton ultimately share is that they are both wrong. There is no economic law valid for all times and all places. The world works beyond economic statistics. Those soldiers I callously called mercenaries might define themselves as patriots. Marx said that family was, essentially, only a mutually beneficial economic unit. I beg to differ. Love, companionship, humor, sharing of emotional burdens is more than an economic relationship.

I'm sorry Milton is dead. He was a brilliant man who missed the point. I'm sorry Marx was forced to say that he wasn't a Marxist, so far from his ideals had his successors traveled. Long live humanity as, dismally, we work through the fog of economic theorists.