Friday, 17 November 2006

Death of a great liberal

Milton Friedman was a liberal in the classical mould who argued that liberty was both an end in its own right and the means by which the greatest degree of prosperity could be achieved. He was naturally distrustful of Government, and this led him to question the Keynesian consensus that dominated the world’s finance ministries during the half-century following the Wall Street Crash. Far from being the solution, Government was the problem: bad monetary policy had worsened the Great Depression, and after the war Government’s efforts to “pump prime” the economy to reduce unemployment in fact stoked inflationary expectorations and so drove up inflation itself. Keynesians suggested that there was a trade-off between unemployment and inflation and that Governments had to choose the right level of each for their countries, yet the pursuit of these policies led eventually to simultaneous rises in unemployment and inflation.

It was in response to this seeming perpetual decline that both the Reagan and Thatcher Governments adopted much that Friedman had recommended. Monetarism, deregulation and privatisation were adopted and implemented. Friedman was himself a sometime adviser to both President and Prime Minister, as well as to General Augusto Pinochet, the dictator of Chile in the 1970s and 1980s. This has led to his being associated with the political Right, with the Republican and Conservative parties.

Yet if Friedman found common cause with these parties, it was because they came onto his ground. He was not afraid to criticise them and advocated many liberal policies that angered the conservative right with whom he was so often erroneously linked. He blamed the 1980s economic roller-coaster in Britain on the Thatcher Government’s failure to implement his policies properly: their inability to resist meddling led, he said, to greater suffering than was necessary in the march to a stable economy. He was also a vocal critic of conscription during America’s war in Vietnam. He argued for the legalisation of narcotics and their sale in a free market on the grounds that supply would always be met, but if it were met illegally it would create far greater secondary problems; he drew heavily on the prohibition of alcohol in the US in the 1920s. As early as 1951 he advocated congestion charging, implemented half a century later in London by the left-wing Mayor of London.

Liberals (here with a deliberately upper-case ‘L’) are rarely gracious about Friedman’s work. The association with the Right causes an instinctive and visceral reaction. Yet, like his contemporary and colleague Friedrich Hayek, Friedman was no Conservative. In truth, there is much in his writings that should appeal to anyone who would call themselves “liberal” (with a deliberately lower-case ‘l’). Perhaps this is clearest in Free to Choose, where he not only set out the case for individual liberty but did so in a format that would enable him to reach the widest possible audience – a television series. This democratisation of economics not only brought the dismal science to the people but advocated individual freedom, deregulation and replacing minimum wages with tax credits. There is much here of which liberals of all stripes, and Liberals most of all, should take note.

1 comment:

Tristan said...

I whole heartedly agree.

This is an argument which has been going on elsewhere on LibDem blogs...

On a related note, I have often wondered why libertarians often throw themselves in with conservatives. This is evident in the UK and the US where the two terms are sometimes used interchangably (to the extent that liberal economics is called conservative in the US).
Granted, Thatcher took some liberal economic ideas, but it strikes me as odd.