A former student of the University of Chicago economics professor comments on what he learned from Milton Friedman about government intervention during economic slumps.
Thomas Sowell, a former Friedman student, Marxist and now a senior fellow at the Hoover Institution at Stanford University, claims that Friedman was a liberal on liberty.
In an opinion piece picked up by the St. Paul Pioneer Press on Tuesday, Sowell outlined his thoughts. “I was a Marxist when I was a student in Professor Friedman’s course...,” said Sowell. “I was still a Marxist after taking Professor Friedman’s class.
“What Friedman is best known for as an economist was his opposition to Keynesian economics, which had largely swept the economics profession on both sides of the Atlantic,” Sowell said.
According to Sowell, Friedman saw the flawed thinking behind Keynesian economics. Friedman challenged the notion that the relationship between inflation and unemployment held only in the short term, when the inflation was unexpected. “But, after everyone got used to inflation, unemployment could be just as high with high inflation as it had been with low inflation.
“There are still some die-hard Keynesians today who keep insisting that the government’s ‘stimulus’ spending would have worked if only it was bigger and lasted longer,” Sowell stated. “This one of those heads-I-win-and-tails-you-lose arguments.”
He contends that Keynesians would stick to their claims even if the federal government spends itself into bankruptcy. An ideal that is held by the current administration’s economic gurus. Keynesians would argue that their economic philosophy would have worked if only the government had spent more stimulus.
Sowell recalls that Milton Friedman considered himself a liberal in the original sense of the word — “someone who believes in the liberty of the individual, free of government intrusions.”
Sowell suggested that, “It is liberals who want to conserve and expand the welfare state.
“Like many, if not most, people who became prominent as opponents of the left, Professor Friedman began on the left. No one converted Milton Friedman, either in economics or in his views on social policy. His own research, analysis and experience converted him,” said Sowell.
Keith Hansen
Comments (66)
Add commentAnd your answer is...
2012 election now has removed the GOP and replaced it with TEA..
Texas has said so...
http://www.washingtonpost.com/politics/ted-cruz-wins-texas-senate-primar...
Michele is mainstream...
GOP is second-stream...
Who knew?...
The author is
The author is wrong.
Government spending to stimulate the economy comes in the form of maintaining our worn out infrastructure. That puts people to work and money in their pocket. That money gets spent creating demand and thus jobs.
We've tried the trickle on theory 3 times and it has failed the test 3 times. The GOP knows it doesn't work but they use the excuse in order to transfer more of the wealth to the wealthy and hope we'll fall for their song and dance a fourth time.
I'm not buying it.
Thoms Sowell is one of the
Thoms Sowell is one of the wisest economics columnists in the country. I have asked him several times to run for President with Walt Williams as his VP. The BDD would do the community a great service if it ran Sowell's columns regularly and if the good folks in the lakes area would do well to Get Sowell's book, "the Thomas Sowell Reader. Very entertaining and very enlightening.
Fish, how many times has socialism been tried? Is it working well anywhere? Love to all comrades - Steve
Yup!
May favorite part was where Sowell said that Keynesian economics is non-falsifiable because even when their tactics fail and they've bankrupted a nation they'll say their plan WOULD HAVE worked if only they could have spent MORE money. How many times have we heard Krugman and Chey say that?
Has Friedman's Policies Worked?
It is one thing to philosophize and it is another to put your theory into practice. We all know the dominance of Keynesian economic theory. So, where have they tried Friedman's theory to the betterment of that society?
Margaret Thatcher? Ronald Reagan? How about Ireland? Chlle? Name us one country.
If it is such a great theory, show us where it has brought the nirvana promised by their devotees.
This from the July31st Slate Article "Milton Friedman and his legacy":
"So we're left with a world in which Friedman is an iconic figure, and yet no major political movement in any of the developed world's major countries is calling for a Friedmanite solution to the dominant policy problem of the moment."
Is that true?
Fish
It may be helpful if you would give us some historical perspective on this. Give us dates for those "3 times" and then tell us who was president and which party was in control of congress and then describe the relationship between the two. Then we would like to know what the relationship was between Wall Street and the big businesses active in those days, and gov't. Oh, and don't forget the unions. Then detail any world events that may have had an impact upon the current economic situation back then.
And then tell us what role, if any, the cultural milieu (i.e. the American people) played in all of this.
Well muehlbau, I'm honored
to be put in the same category as Krugman. Does the fact that decreased public spending is a serious drag on the recovery tell us anything? The key is to bring government revenues in line with expenditures, which happens when people are working and paying taxes... the trickle down boys aren't creating jobs or paying much in the way of taxes as witnessed by their accumulation of wealth over the past few decades (see Bain Capital and Romney). So what's your solution?
Is Socialism Working Anywhere?
Has Mr. Busch ever been to Sweden? Do you want to know how we rank in comparison in categories that affect the people, not the corporations?
Love, peace and soul to you comrade.
more wealth
" in order to transfer more of the wealth to the wealthy"
And don't think I don't appreciate it. What a great country!
Lots of love but none of my fabulous wealth to all - Steve
It's not a drag on the recovery, Chey...
...at least not the real recovery, which we want to be in the private sector. You said so yourself, yesterday with your link to the AEI article. The private sector grew at 3%, that's where we want to see growth, not the public sector--especially not the public sector at the expense of the private sector.
I don't disagree with you as far as bringing expenditures in line with revenues, of course. But I want to see it done first by cutting unsustainable entitlement programs, and then, and only then, should we consider some minor tax increases if it is still necessary to pay for government necessities. We will have to cut these programs eventually because the writing is on the wall--they are destroying us. Why not cut them before they've done maximum damage?
As for you wanting to be in the same category as Krugman, to each his own. I'm sure there are people who would like to be in the same category as Marx, as well.
Who's the Marxist?
"I was a Marxist when I was a student in Professor Friedman’s course...,” said Sowell. “I was still a Marxist after taking Professor Friedman’s class."
Throwing out accusations about who is a Marxist makes you sound like that kook Allen West of FL.
Soon to be former US Rep., Allen West.
they hope!
Actually, Friedman's theories HAVE worked...
...if by "worked" you mean that there is more upward mobility when markets are freer. Late 19th century and early 20th century in this country were times of tremendous upward mobility in this country for the lower classes and there was little regulation and no corporate taxes during those years.
As for Sweden, as one might expect, the myth is far different from the reality:
http://mises.org/daily/4936/Stagnating-Socialist-Sweden
It is interesting that Sweden has always kept its debt at a manageable level. Perhaps we could learn something from them in that regard.
Do you know the difference between past and present tense...
...Austin? Sowell hasn't been a Marxist for years. Friedman was a Keynesian at one point, but so what? I don't hold it against a person what they used to believe. How could I? I thought Marxism could work when I was in college, too.
From left to right.
I really appreciate Dr. Sowell as he educates the open mind
and does it without condescending and racist remarks.
Of course, people have no problem calling him Uncle Tom
when he differs from the way they think he should think.
The last sentence says it all.
Don't be a racist, Southie...
...you don't like Col. West just because he's BLACK! Admit it!
Rep. Allen West is Crazy
People do not like Rep. Allen West because what he says is crazy, bat-crap crazy, just like Bachmann and that Goober from TX.
There are communists in the U.S. House? Really?
Really muehlbau?
the decrease in public sector spending is not a drag on the recovery? When a teacher or policeman loses their job they no longer have the purchasing power to support local businesses they once did. If the govt cuts back on purchases of computers, military hardware or whatever, don't you suppose that affects the businesses they deal with? The more people spending the greater the muliplier effect on economic activity. For the record the American Enterprise Instititute report shows total govt spending as a percent of GDP has averaged minus 2.88 % per quarter over the past two years. Private sector GDP has increased 3.07%. You figure it out.
Which country? Which economy?
Muelbau, you did not answer my question. Which country(s) has seen their economy prosper using the Friedman model?
When you answer we can then dig into the statistics and determine what happened, good and bad. Practical applications are always good to determine efficacy.
And, you took offense to my taking Thomas Sowell's words and used them selectively? Hmm....interesting turn of events from someone who likes to twist what Obama said.
If you're curious, look it up.
If you really want to check on communists in the U.S. House, you
may want to check out the following: Barbara Lee, Eddie Bernice Johnson, George Miller, Lynn Woolsey, Pete Stark,
Jan Schakowsky. I my have spelled that last name wrong.
I don't know if they are communists, but they are extreme and
I believe many are from CA. Instead of making fun of
Col. West, try looking into what he is saying as there may
be some truth in it.
Don't forget to check under your bed,
Sadie, Sadie....
Sorry, Chey...but I don't see many cops or teachers losing their
...jobs. I have seen a lot of private sector employees losing their jobs. And it always costs the taxpayers more when the government spends money than when the private sector spends money. Private sector spending is simply more efficient and effective than public spending. If it weren't, the USSR would have been the richest country in the world when it hit its full stride. But guess what? Massive government spending and intervention was so unproductive in the old Soviet Union they had to give more freedom back to the private sector to keep the country from collapsing altogether.
And just so we're clear, government has some appropriate roles to play, but deficit spending with the intention of creating jobs is not one of them. As Friedman pointed out, it only results in stagflation.
Stagflation
is exactly what we get when public spending is continuoulsy being shrunk. Witness the last two years. Btw, how's that austerity program working in Europe?
Someone asked if socialism has worked anywhere...
Evidently it is working in California....if, by working, you mean lot's of business activity. Businesses are feverishly making a bee line for other states. I'm sure moving companies and van lines are experiencing a boon economy.
The cities are working too. They're busy filling out all the paper-work necessary for filing chapter 9. Of course, that means lots of work for private law firms.
So, there are a lot of busy little beavers in CA. Lot's of working going on out there.
No Chey...
...stagflation is high inflation (caused by government printing presses melting down from overuse) and high unemployment. Government has never done a good job of creating jobs. In fact, FDR's efforts probably extended the Great Depression by about five years.
And I answered you question, Austin. I said Friedman theory worked in this country--before he was even born. It also has been effective in helping improve the standard of living of people living in Hong Kong and were even important in Sweden's growth during the late 19th century.
Democratic Socialists of America seem to think they have 70
members in Congress.
http://www.scribd.com/doc/35733956/DSA-Members-American-Socialist-Voter-...
I mean, you folks are aware there is a "progressive" caucus in Congress, aren't you? You do know that progressive has always been historically connected with socialism/communism, don't you? Why do you think they continually use the slogan "Forward!"
For all the conservatives here...
We need to go a little easier on our esteemed president. According to the NYT:
http://thecaucus.blogs.nytimes.com/2012/08/01/obama-supporters-barraged-...
Obama is NOT a socialist either. He's a pan-handler.
(Just wanted to clarify this one point.)
Communists in the U.S. House?
What makes these members communists? Are they members of the party? Rep. Allen West was accusing members of the Black Caucus and now we have posters on this forum naming names. Are you old enough to remember Senator Joseph McCarthy? Sound familiar?
Allen West, Michelle Bachmann, Louis Gomert and now SadieMarriedLady. You are known by the company you keep.
Making fun of Rep. Allen West? That is much too easy! Just let him open his mouth.
Oh, and I didn't take offense at you using Sowell's words...
..."selectively" Austin. I corrected your improper understanding of what he said. If you'd read the original column or ever read anything written by Sowell, you'd know that any belief he ever had in Marxism was long gone.