Milton Friedman

[Shalmanese]

I lost any respect I had for Milton Friedman after I read this interview given by him in which he advocates the elimination of the FDA, the FAA and about 80% of the government. It’s not neccesarily his views, extreme as they are, but he just struck me as incredibly ideologically bent and not prone to careful consideration. The fundamentalist strain of the libertarian movement essentially and that scared me a lot that his voice was so influential in government.

[BrainGlutton]

@Shalmanese

I lost any respect I had for Milton Friedman after I read this interview given by him in which he advocates the elimination of the FDA, the FAA and about 80% of the government. It’s not neccesarily his views, extreme as they are, but he just struck me as incredibly ideologically bent and not prone to careful consideration. The fundamentalist strain of the libertarian movement essentially and that scared me a lot that his voice was so influential in government.

I never read that interview, but I lost all respect for Friedman after I read The WHYS of a Philosophical Scrivener by Martin Gardner. In particular the chapters titled “Why I Am Not an Anarchist” and “Why I Am Not a Smithian.” (Putting this in perspective, there was also a chapter called “Why I Am Not a Marxist.” These three chapters together played a very important role in my evolution from a small-l libertarian into a democratic socialist.)

Friedman might have been an influential figure in history and a true gentleman, but as a political economist . . . Put it this way. Keynes is the economic equivalent of Newton or Einstein. Friedman is a highly important figure of the second rank, like Planck or Bohr.

[RickJay]

@Sam Stone

Milton Friedman was a great man. He may be singlehandedly responsible for more wealth creation and improvement of the human condition, of any person in the last 50 years.

Friendman was a great economist but it’s silly to accredit him with a lot of wealth creation. Wealth is created by actual capitalists, not the people who talk about them.

I mean, it’s not like Friedman invented capitalism. Capitalism was well entrenched before he hit the scene.

@Shalmanese

I lost any respect I had for Milton Friedman after I read this interview given by him in which he advocates the elimination of the FDA, the FAA and about 80% of the government. It’s not neccesarily his views, extreme as they are, but he just struck me as incredibly ideologically bent and not prone to careful consideration. The fundamentalist strain of the libertarian movement essentially and that scared me a lot that his voice was so influential in government.

Well, I think there’s two things to bear in mind;

1. Judging whether or not he’s ideologically bent by what you read in an interview is, shall we say, not a great way to judge a person’s character, and

2. We’re judging Milton Friedman as what he was - a thinker and a scientist - not by how good a job he’d have done if he was elected President in a parallel universe. It seems to be that Friedman was willing to challenge to status quo, to challenge people’s beliefs and paradigms (I hate to use that word but it fits here) and that’s a good thing.

3. Was he really THAT influential in government? How many bazillions of dollars will the United States spend on social programs this week? How many billions will be handed out in agricultural subsidies in 2007? Was the FDA done away with? The FAA?

The United States government HASN’T gotten smaller. It gets bigger every year. Friedman apparently did not get his way.

[RickJay]

THREE things. THREE.

[BrainGlutton]

@RickJay

The United States government HASN’T gotten smaller. It gets bigger every year. Friedman apparently did not get his way.

Please bear in mind that the size of government (in terms of budget and personnel) and the freedom of business from government oversight are two different things.

I’m sure there are many, many capitalists who are very grateful for Keynes’ influence on history, and even more grateful for their fat, juicy, sweetheart government contracts. Dick Cheney is one of them, despite his utterly and shamefully dishonest proclamation that “government had nothing to do with” his personal success.

[Opus1]

@Shalmanese

I lost any respect I had for Milton Friedman after I read this interview given by him in which he advocates the elimination of the FDA, the FAA and about 80% of the government. It’s not neccesarily his views, extreme as they are, but he just struck me as incredibly ideologically bent and not prone to careful consideration. The fundamentalist strain of the libertarian movement essentially and that scared me a lot that his voice was so influential in government.

Do you want to back up your opinion, or do you just take it as a given that elimination of the FDA is a bad thing, and thus requires no argumentation to disprove. I’ll quote Friedman’s son, David, himself a prominent philosopher/ economist, and far more libertarian than his father:

…in 1981…the FDA published a press release confessing to mass murder. That was not, of course, the way in which the release was worded; it was simply an announcement that the FDA had approved the use of timolol, a Beta-blocker, to prevent recurrences of heart attacks. At the time timolol was approved, Beta-blockers had been widely used outside the U.S. for over ten years. It was estimated that the use of timolol would save from seven thousand to ten thousand lives a year in the U.S. So the FDA, by forbidding the use of Beta-blockers before 1981, was responsible for something close to a hundred thousand unnecessary deaths.

How many lives has the FDA saved to make up for those hundreds of thousands of deaths, plus many, many more?

[Least_Original_User_Name_Ever]

Tough line to walk. The FDA certainly isn’t perfect, but they SHOULD (ideally) be above pressure and corruption and act in the best interests of the general welfare of the people.

Is this an acceptable loss of life? Is there such a thing? This is the portal to an entirely new debate in its own right.

How many lives has the FDA saved? Many. Do I have a number or cite? God no.

The problem isn’t with the FDA itself or even with the system. It’s a good, sound idea. The problem is that the people put in charge of it are prone to pressures that could/would sway their opinion.

There is going to be some bias or some pressure. We’ve just got to make a way to limit that amount in order to make the FDA work at its most effective level.

[Shalmanese]

Hi Opus1. I didn’t want to hijack this thread so I’ve created a seperate thread about the FDA issue here.

[pantom]

I wouldn’t even rate him a mediocre thinker, and I actually agreed with him on things like the drug war or the effect of rent control on the Bronx, and I do think that bottom-up, as he puts it in this interview, which is a very fair summation of his views by the man himself, will win over top-down, as he clearly states there.
However, for whatever reason, there’s clear class bias in one of his principal ideas: the NAIRU, or Non-acclerating Inflation Rate of Unemployment. This is the idea that if you push unemployment below a certain level, it will lead to an accelerating rate of inflation, because wages will rise faster than other costs in a tight labor market, which will then spur inflation.
I don’t think he was even aware of it, but the idea flatly contradicts Adam Smith:

from the end of Book 1, Chapter 9 in The Wealth of Nations:

In reality high profits tend much more to raise the price of work than high wages. If in the linen manufacture, for example, the wages of the different working people; the flax-dressers, the spinners, the weavers, &c. should, all of them, be advanced two pence a day: it would be necessary to heighten the price of a piece of linen only by a number of two pences equal to the number of people that had been employed about it, multiplied by the number of days during which they had been so employed. That part of the price of the commodity which resolved itself into wages would, through all the different stages of the manufacture, rise only in arithmetical proportion to this rise of wages. But if the profits of all the different employers of those working people should be raised five per cent. that part of the price of the commodity which resolved itself into profit, would, through all the different stages of the manufacture, rise in geometrical proportion to this rise of profit. The employer of the flax-dressers would in selling his flax require an additional five per cent. upon the whole value of the materials and wages which he advanced to his workmen. The employer of the spinners would require an additional five per cent. both upon the advanced price of the flax and upon the wages of the spinners. And the employer of the weavers would require a like five per cent. both upon the advanced price of the linen yarn and upon the wages of the weavers. In raising the price of commodities the rise of wages operates in the same manner as simple interest does in the accumulation of debt. The rise of profit operates like compound interest.
Our merchants and master-manufacturers complain much of the bad effects of high wages in raising the price, and thereby lessening the sale of their goods both at home and abroad. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains.

Of course, on top of that, it doesn’t work:

Furthermore, recent research has demonstrated that NAIRU cannot be estimated with much precision; there is significant uncertainty in the empirical estimates of NAIRU. Empirical analysis by Staiger et. al., demonstrates that estimates of NAIRU are quite imprecise with large, wide confidence bands.17 This suggests a lack of confidence as to the actual estimates. In assessing the Staiger et. al., analysis, for example, one commenter stated:

…The data are incapable of distinguishing between a wide range of estimates of the natural rate… a variety of plausible models yield widely differing estimates of the natural rate at a point in time... The standard errors of the estimated natural rates are quite large -- a typical 95% confidence interval runs from 5 to 8 percent… Even with forty-two years of monthly time-series observations, the data just do not provide precise estimates.18

For all practical purposes, the size of this imprecision and uncertainty precludes the use of NAIRU as a reliable guide for a price-stabilizing monetary policy.

If we were to go by Adam Smith himself, we’d be more likely to try to estimate the NAIRP: the Non-Accelerating Inflation Rate of Profit. Needless to say, that’s one calculation you’re not likely to see any time soon. Just as well, since it would probably be just as useful.

[John_Mace]

@pantom

I wouldn’t even rate him a mediocre thinker…

Yeah, those Nobel Prize winners are a dime a dozen. (I know it isn’t technically a Noble Prize, but pretty much everyone calls it that, and the criteria is basically the same.)

[pantom]

Huh? I mean I respect the prize and all, but that doesn’t mean I can’t have my own opinion on the guy.

[BrainGlutton]

@John Mace

Yeah, those Nobel Prize winners are a dime a dozen. (I know it isn’t technically a Noble Prize, but pretty much everyone calls it that, and the criteria is basically the same.)

Yes, well . . . Looking down the list of winners . . . one name that jumps out at me like something out of Mark Foley’s pants is that of Friedrich Hayek, founder of the “Austrian School.” Based on what little I know of that and on the feeble defenses of same put forth in this thread, I can only wonder what possessed them to give a Nobel such a pseudoscientific crackpot.

I’m also wondering if there isn’t some selection bias in the prize. Has anyone not a free-marketer ever won it?

[RickJay]

@BrainGlutton

Yes, well . . . Looking down the list of winners . . . one name that jumps out at me like something out of Mark Foley’s pants is that of Friedrich Hayek, founder of the “Austrian School.” Based on what little I know of that and on the feeble defenses of same put forth in this thread, I can only wonder what possessed them to give a Nobel such a pseudoscientific crackpot.

You have got to be fucking kidding me. I mean, seriously, Brain, at this point it’s your own bias blinding you.

Dismissing Hayek, who made tremendous contributions to the field of economics, as a “crackpot” is kind of like saying Sir Isaac Newton didn’t do anything for science because he was a “Crackpot.” Newton spent a hundred times more effort on pseudoscientific nonsense that did Hayek and everyoen Hayek ever knew combined. Newton spent far MORE time on pseudoscience and nonsense than he did on actual science. Was Newton a useless crackpot? Would you deny him a place in the pantheon of great scientists? What about Einstein, who spent most of his career on a wild goose chase? Should he have been denied his Nobel Prize?

Let me ask you this; without now looking it up, do you even know what Hayek won the award for?

I’m also wondering if there isn’t some selection bias in the prize. Has anyone not a free-marketer ever won it?

Define “free marketer.” Are you just opposed to the Austrian school?

Wassily Leontief certainly was not a member of the Austrian school - in fact, he was openly very critical of it. James Buchanan (not the President) won the award for applying economic theory to political behaviour. John Nash wasn’t even really an economist. Amartya Sen is certainly not an Austrian schooler. If you don’t know what these guys won the award for why are you criticizing them?

[BrainGlutton]

@RickJay

Dismissing Hayek, who made tremendous contributions to the field of economics, as a “crackpot” is kind of like saying Sir Isaac Newton didn’t do anything for science because he was a “Crackpot.” Newton spent a hundred times more effort on pseudoscientific nonsense that did Hayek and everyoen Hayek ever knew combined. Newton spent far MORE time on pseudoscience and nonsense than he did on actual science.

None of which had anything to do with the soundness of his physics.

@RickJay

What about Einstein, who spent most of his career on a wild goose chase?

What wild goose chase?

@RickJay

Let me ask you this; without now looking it up, do you even know what Hayek won the award for?

No, and, as I thought I made clear, I have only the most superficial knowledge of the content of his theories. What makes Hayek a crackpot, and what should disqualify any “scientists” from consideration for a Nobel in any field but mathematics, is his nonempirical, formal, “praxeological” methodology.

@RickJay

Define “free marketer.”

Difficult of precise definition, especially WRT economists. Let us begin with the assumptions that Keynes, while not a socialist in any sense and certainly a believer in the value of markets as such, was not a “free marketer,” and Friedman and Hayek were. Plot a continuum between them. Are there any winners on that list who are closer to Keynes’ position than to Friedman’s?

@RickJay

If you don’t know what these guys won the award for why are you criticizing them?

I’m not, yet; I’m just posing a question about them, and about the persons choosing the winners.

[Opus1]

Might it be that Nobel Prize winners in economics tend to be “free marketers” for the same reason that Nobel Prize winners in biology tend to be evolutionists?

[BrainGlutton]

@Opus1

Might it be that Nobel Prize winners in economics tend to be “free marketers” for the same reason that Nobel Prize winners in biology tend to be evolutionists?

Not if that means we must regard Friedman as a superior economist to Keynes.

[Tyrrell_McAllister]

@pantom

I don’t think he [Friedman] was even aware of it, but the idea [of a Non-acclerating Inflation Rate of Unemployment] flatly contradicts Adam Smith

I don’t understand the point Smith is making in the text you quoted. He seems to be saying that if you increase wages arithmetically (2 pence), then costs increase arithmetically, while if you increase profits geometrically (5%), costs increase geometrically. But surely if you increased profits arithmetically, then costs would also increase arithmetically.

In other words, Smith makes it sound like increasing profits has a different effect on costs then increasing wages, but, as far as I can tell, it seems that way only because he increased profits in a different way from how he increased wages in his hypothetical. Am I missing something?

[ralph124c]

MF was an advisor to the Chilean government-after their disastrous experiment with Marxism, Chile turned to MF. The results were astounding: an annual growth rate of >8%, a growing middle class, and a vibrant economy! That’ the best tribute he could have-Marx and Engles are probably responsible for more human misery that Stalin or Hitler! :smack:

[BrainGlutton]

@ralph124c

MF was an advisor to the Chilean government-after their disastrous experiment with Marxism, Chile turned to MF. The results were astounding: an annual growth rate of >8%, a growing middle class, and a vibrant economy! That’ the best tribute he could have-Marx and Engles are probably responsible for more human misery that Stalin or Hitler! :smack:

Is that why the Chileans elected a socialist president this year?

[Shalmanese]

@John Mace

Yeah, those Nobel Prize winners are a dime a dozen. (I know it isn’t technically a Noble Prize, but pretty much everyone calls it that, and the criteria is basically the same.)

This is an appeal to authority. Personally, I’ve developed a habit that whenever I see the words “Nobel Prize Winner”, I mentally replace it with “Scientist who’s best work was 20 years behind them”. That Friendman managed to come up with some incredibly insights does not neccesarily mean that his reasoning ability must of been excessively great. Like Einstein, Freud, Skinner, Hoyle and a whole list of other luminary scientists, I think he succumbed to the unfortunate malady that he bought into his theory so much that he refuses to consider any evidence to the contrary.