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The Postumous Death of Milton Friedman

Thursday, January 29, 2009
For three decades, I've been forced to listen to acolytes of Milton Friedman. Friedman is the intellectual heavyweight of the neoclassical economic revival of the last generation. He is also perhaps the single most influential figure in modern economics, and the godfather of the so-called "Chicago School." Over the years I've had to put up with the arrogance of the Chicago's schools fans not only in countless economic and political debates, but also in political science. I'm not saying that there aren't a lot of very bright people coming out of the dominant wing of economics, but more than a few had a touch of hubris. This says nothing of the half-baked pseudo-Friedmanism coming out of the mouths of Republican party hacks and Limbaugh dittoheads. Not as annoying as Randians, perhaps, but I will say that there's a general overlap between the two groups outside of academia (exhibit A).

A personal example: When I was taking an economics class in graduate school, I was informed by my professor that there were only two basic models for managing an economy - government planning and the free market. The collapse of the Soviet Union demonstrates that the planning model doesn't work, so the laissez-faire model is the one we should embrace, QED. You can imagine the reaction from a 21-year-old, conceited, argumentative graduate student who had read a few things about macroeconomics and economic history. I jumped in and said that not only was this bad logic, but that the pure free market approach had led to its own economic disasters, such as the Great Depression. The conversation went downhill from there.

I can't say I'm happy about the current financial crisis and the attendant recession, which now appears to rival the recession of 1980-1982 - if we're lucky. But I can say that there is a certain satisfaction to be had in watching my former interlocutors splutter when asked what to do next, alternating between flapping around like fish in the bottom of the boat and looking around for a hole to stick their heads in. The fact is that they have been wrong, dead wrong, about everything. I know it, the world knows it, and now, worst of all, they know it too.

I just wish the consequences of their errors weren't so severe.
Posted by Arbitrista @ 9:05 AM
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