Discussing Friedman in his absence | Bleader

Tuesday, November 28, 2006

Discussing Friedman in his absence

Posted By on 11.28.06 at 11:48 AM

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Judge Richard Posner is surprisingly skeptical about the late Milton Friedman's theories. He writes at the Becker-Posner Blog:

"I think his belief in the superior efficiency of free markets to government as a means of resource allocation, though fruitful and largely correct, was embraced by him as an article of faith and not merely as a hypothesis. I think he considered it almost a personal affront that the Scandinavian nations, particularly Sweden, could achieve and maintain very high levels of economic output despite very high rates of taxation, an enormous public sector, and extensive wealth redistribution resulting in much greater economic equality than in the United States. I don't think his analytic apparatus could explain such an anomaly.

"I also think that Friedman, again more as a matter of faith than of science, exaggerated the correlation between economic and political freedom. A country can be highly productive though it has an authoritarian political system, as in China, or democratic and impoverished, as was true for the first half-century or so of India's democracy and remains true to a considerable extent, since India remains extremely poor though it has a large and thriving middle class." 

Read the whole thing, and the intelligent criticism in the comments. The idea that good things go together dies hard, and Posner's a good person to drive a stake through its heart.

Dean Baker has a slightly more barbed personal reminiscence:

"About a decade ago, I stumbled into the wrong session at the American Economics Association Convention. Milton Friedman was . . . pointing out that many measures of considerable economic importance often get little scrutiny. The particular example I remember him discussing was the Americans With Disabilities Act, which requires businesses to make reasonable efforts to make their places of business accessible to employees and customers with disabilities. I stayed long enough to hear Mr. Friedman argue that this act imposed enormous costs on 'normal people.'"

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