Milton Friedman, Requiescat in Pace

Nov 17th, 2006 | By | Category: Personal Columns

Milton Friedman died of heart failure at the age of 94 on Thursday.

Anyone unsure of who Milton Friedman is probably unaware of how he changed the world and in doing so changed the lives of every one of us.

Friedman was the patron saint of free market economics, the return to 19th Century laissez faire liberalism that was espoused by Margaret Thatcher on this side of the Atlantic and by Ronald Reagan on the other.Friedman provided the philosophy that has undergirded the globalisation of economics in the past generation.

I hated him in my student days.His 1962 book Capitalism and Freedom was one of the set texts during my first year at the London School of Economics.He had won the Nobel Prize for Economics three years previously and, as far as my economics tutor was concerned, to question his judgement was tantamount to heresy.

It was a mystery to me as to how someone with such right-wing views as my tutor had been appointed to a post at the LSE.I had come up to London from the West Country to have all of my left-wing prejudices confirmed, had I wanted to hear Tory views I could have stayed at home in Tory Somerset.

It was the Tory dimension that was the problem. Mrs Thatcher was someone loved or despised by people, indifference was not an option. I was very firmly in the latter camp, sinking into depression as she won three elections in a row. Had John Major been leader in 1979, many people would have felt very differently, but had John Major been leader, Callaghan’s Labour Government might have been re-elected.

I re-read Capitalism and Freedom in the spring. It was very different from the book I remembered.It was far more radical than anything that had actually occurred. I wonder what Friedman had made of the walls of economic protection that the United States and the European Union had built around themselves. Had I had the time I would have gone looking for his reaction to the Common Market “food mountains” that were allowed to accumulate in the 1980s and the more recent tariff barriers erected to prevent imports from the developing world effectively competing in European markets.

Friedman really was a radical and I regretted that my teenage prejudice had blurred an appreciation of what he was saying.There was a genuine desire for individual freedom in his book and his vision of capitalism was not one of transnational corporations using every opportunity to exploit situations to extract maximum profit, but one where the full and free operation of the market allowed the maximum of individual freedom and the maximum of competition between companies.

Friedman’s economics are the best guard against the human sinfulness that is otherwise manifested in institutions that pass laws to keep out the produce of the poor; that discriminate between people on the basis of the passport they carry; and that allow nations to be used for the furtherance of politician’s religious or ideological beliefs.

My tutor would never have thought she would ever have heard me say such things.

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