Milton Friedman: A Conservative Paradox
Tags: Milton Friedman, Economics, Politics, Green Finance, Finance

Nobody spends someone else’s money as carefully as he spends his own.

Photo by me: Monopoly is a child’s game with very low stakes. Governance, ethics, and the choices available in this moment are very high stakes game for our children.

The human mind with all its complexity, creativity, and imagination is a thing of beauty. Beautiful minds gift the world with progress and innovation. The freedom to think and pursue the whims of one’s mind, whether it be in the fields of art, science, music or math create works of sublime allure that are as attractive to me as the mountains of my hometown or the vastness of the ocean. There are several authors, musicians, and philosophers I keep coming back to over time and a man that I’ve developed a great admiration for is Milton Friedman. Admiration should never skew into worship because as we are individuals, all ideas have some flaws. I’ve always believed in taking the best of all ideologies to create the most efficient, elegant, and mutually beneficial results. Capitalist ideas are just as welcome as communist or socialist ideas. They just have to be tempered with logic, history, and pragmatism. Milton Friedman was someone who I believe embodies this philosophy.

Friedman considered himself somewhat radical. He was born in Brooklyn in 1912, pursued a degree in Economics, was a sound debater heavily grounded in civil discourse who enjoyed debating ideas. The author of several books and the winner of the 1976 Nobel prize in economics, his ideas are heavily influential to me in this moment of historic turmoil.

People often associate capitalism and free markets with our current economic issues, environmentalism degradation, and societal decline. I’d like to challenge that point of view. Friedman was staunchly for limited government with clear demarcations between business and politics. His premise was simple - all people will protect and promote their self-interest. This is true whether it is the public or private sector. Yet the results are vastly different from nation to nation often depending on the size of government.

If a private enterprise fails, the long-standing principle was that there would be no one to bail you out. If a government enterprise fails there is always a backstop courtesy of the American taxpayer. Many times in the course of his lectures and writings, Friedman referred to Adam Smith’s theory of the invisible hand. The theory summarized states that individuals seeking to pursue their self-interest serve the public interest as well. Friedman’s interesting corollary is that the converse is also true. In seeking to only pursue public interest, there is a tendency to benefit private interests. This can be proven historically with experiments in planned economies and large scale government interventions. It logically follows that the former premise seems much less damaging than the latter.

He believed in term limits for Congress. I would go even farther and propose them for all levels of government including the supreme court and judiciary. This promotes mentorship, innovated ideas, and lessens the gridlock that we currently face. Term limits ensure a governmental body that reflects the age, and demographics of the American people. Limiting service also ensures fewer opportunities for court-packing and political games. Real representation of the American people is tantamount to a functioning democracy.

Often, liberals and conservatives forget how much they have in common and how similar their ideas can be. Particularly when the fundamental ideas of democracy, rule of law, equal rights, and human dignity are upheld. For example, it would surprise most that Milton Friedman was a staunch proponent for the legalization of drugs. He understood in the nineties the cost of the war on drugs, the societal cost of mass incarceration, engaging the US government in other countries, and the loss of personal freedoms. He compared the drug war to the fallout of prohibition. Friedman believed that making drugs illegal drove people from softer drugs like marijuana, mushrooms, and the like to harder drugs. He believed that legalizing drugs would cut the number of prisons, drug-related homicides, and incarcerated citizens in half.

Milton had surprisingly progressive views on the environment that were grounded in ethics, logic, and personal responsibility. Friedman believed in taxing pollution as far back as the eighties. Time and again he stressed his dismay at the special interests that reaped the benefits over the cost paid by everyday Americans. In seeking to promote your interests within the bounds of ethics and the law you promote the interests of others. This is the intention of the often misunderstood essay published in the New York Times, The Social Responsibility of Business is to Increase its Profits.

’There is a real function for government in respect to pollution: to set conditions and, in particular, define property rights to make sure that the costs are borne by the parties responsible.’ — Milton Friedman

Is a dollar gained through carbon taxes or green technology any less valuable than through fossil fuels? Of course not. it may, however arguably be much more morally satisfying to the individual earning it. On that note, I found some ideas on green finance that I find exciting. I encourage you to watch human ingenuity and a world of possibilities open, shifting our current paradigm.

With every turn, Milton Friedman emphasized personal responsibility, ethical behavior, and limited government. Just as there should be a strong separation of church and state there should a distinct separation between the role of government, public service, and the private sector. Conflicts of interest matter. They matter in influencing our judicial system and every facet of politics. The presence of dark money and political influence should play no role in governance. Here is another excerpt discussing the role of the individual in a corporation and private life.

‘As a person, he may have many other responsibilities that he recognizes or assumes voluntarily — to his family, his conscience, his feelings of charity, his church, his clubs, his city, his country. He may feel impelled by these responsibilities to devote part of his income to causes he regards as worthy, to refuse to work for particular corporations, even to leave his job, for example, to join his country’s armed forces. If we wish, we may refer to some of these responsibilities as “social responsibilities.” But in these respects he is acting as a principal, not an agent; he is spending his own money or time or energy, not the money of his employers or the time or energy he has contracted to devote to their purposes. If these are “social responsibilities,” they are the social responsibilities of individuals, not business.’ — Milton Friedman

Fifty years later these words still ring true. Large governments throughout history and planned economies have done poorly and concentrated power. Private enterprises and individuals will always do a better job with money, innovation, and creative solutions to existential threats like climate change and poverty. Friedman believed in a basic minimum income in lieu of any kind of welfare program. He proposed a negative income tax for the impoverished. I’m still deciding how I feel about this argument but his discussion and detailed explanation is compelling nonetheless.

In 2001 Friedman wrote an essay for the Hoover Institute about the state of US healthcare. He was puzzled by the inordinate cost of healthcare in the US compared to other OECD countries. He believed it was due to the presence of a middle man and third party payment. Tax exemptions for employer-provided medical care raise health care costs. If tax exemptions were eliminated, employees could seek their coverage directly from medical care providers. While he favored medical savings accounts, he thought they were a radical idea that perhaps would not have sway with the public. He did have this to say about the single-payer systems:

In terms of holding down cost, one-payer directly administered government systems, such as exist in Canada and Great Britain, have a real advantage over our mixed system. As the direct purchaser of all or nearly all medical services, they are in a monopoly position in hiring physicians and can hold down their remuneration, so that physicians earn much less in those countries than in the United States. In addition, they can ration care more directly — at the cost of long waiting lists and much dissatisfaction.- Milton Friedman

Time and again Friedman championed personal freedom, responsibility, and choice. While I may not agree with some of his ideas, his arguments were often flawless and incredibly forward-thinking. Several of Milton Friedman’s ideas might even be classified as radical. I loved this about him. Advisor to presidents, thinker, and debater he was a unique individual.

People like this have no true allegiance to a party or candidate. I have voted in every election since I was 18 where I was legally able to do so. My dad taught me it was my civic duty and I still whole-heartedly believe that. I often prefer independents, grass-roots activists, and candidates that don’t represent a political machine because they have more representative views that align with people that think differently, just like Milton Friedman.

Large government and convoluted legislation take power away from the individual and communities to act in their own best interest. Time and again this has been exposed as truth in history and by individuals like Friedman. Most importantly, personal integrity in all facets of life was his moniker. I have a deep abiding admiration for this man and his ability to engage with students, politicians, businessmen, and foreign governments alike. I can only hope that political discourse, education, and public engagement will see a revival of debaters like Friedman who engaged with others in the highest capacity, with mutual respect, open-mindedness, and balance. It is something we are sorely missing in America right now. I would like our children to engage and support that time-honored tradition.

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Go Forth, break bread: Mmmmmm….Chicken and Bacon. This was really good and if you feel so inclined try adding prosciutto strips as well.

My dream soundtrack added Halsey, I walk the line to it’s library. I hope my daughter and girlfriend get to see you live!