The Problem with Milton Friedman – Compendium

Executive Summary

• Selling Opinions
• The Shock Doctrine

Professor Friedman felt both that corporations had no business spending money for social good, and that business should not be regulated because all regulation would eventually be captured by business interests. What type of world would this result in we wonder?

Introduction

Of the posts on this blog, those related to Milton Friedman seem to be some of the most popular. People seem surprised that Milton Friedman is so heavily criticized in this blog and in others. While Friedman has an aura of respectability which has been granted by concentrated power, the fact is that Friedman is easy to criticize because his track record is so weak. No doubt we all know a person who is good at their job but tends to have a number of doctrinal or essentially retarded political views.

This was Friedman in a nutshell. Economics is presented as a topic that has a great deal of applicability to everyday life. However, academic economics, which is the area where Friedman achieved fame, is so esoteric and deliberately obtuse that it is nowhere near as applicable as many people think. Furthermore, the emphasis of economics over the past century has been to move further and further way from the real economy and focusing on advanced forecasting (which while containing a great deal of math can’t seem to predict the most apparent asset bubbles). Thus, while Friedman’s academic work may or may not have been good (for non-academics it makes no difference as Friedman was not publishing research for any applicability, but simply to impress other academics or wealthy benefactors), it does not have much to do with his political opinions. While Friedman used his Nobel Prize reputation to back his political opinions, they were, in fact, nothing more than that.

Selling Opinions

A second problem with the profession of economics is that most economists outside of academics work for large concentrated financial interests. This actually relates to the reason why economists can’t seem to predict anything. Economists are paid to provide forecasts their bosses want, not forecasts that are “negative.” Furthermore, many economists simply can not speak out about the present boondoggle-bailout because they work for the institutions receiving the money. Paul Krugman can afford to criticize idiotic banking and bailout policy because he has made his name already, however, if he was silent, he could make even more money because he would be lavished with hedge fund speaking opportunities (like economics super-whore Larry Summers) and so on. In terms of selling his opinions for cash, Friedman was peerless.

In this post, we wanted to list our posts that discuss Friedman.

This post discusses how Friedman appeared to configure his opinion in order to get on the gravy train from wealthy corporations. He said what they liked, and they promoted him.

This post describes Friedman’s greatest defect…he was simply unethical. He was primarily about accruing power, therefore, how he accomplished this goal was secondary. The immorality in his own life went a long way to explain why he could not see a place for morality or standards in society in general. Friedman was famous for supporting any regime internationally, no matter how terrible, as long as they implemented his “shock therapy.”

This post describes how economics writing is filled with politics and that much of it has nothing to do with economics.

The Shock Doctrine

Naomi Klein’s book – the Shock Doctrine is an excellent primer on Milton Friedman.

100% Wrong?

One thing we have recently begun to do is to try to find instances where Friedman was right about something. He has what must be the most miserable track record of popular economists, or at least he is tied with Larry Summers for being consistently wrong. However, we did find a documented instance where Friedman was correct about something, and it is related to real estate taxation. You can find out where he was right here.